Prelude

It’s happened in Calgary, Ottawa, Vancouver and Toronto. Queues of people, insanely lined up outside a new condo development, hands in their pockets, fingering their chequebooks. With one mid-town Toronto development last week, they started the ritual four days early. In dreary suburban Vancouver, as this insufferable blog reported, the frenzy’s lasted as long as a week. In Calgary months ago, two unbuilt towers with 400 imaginary units, snapped in a weekend.

Once let inside the sales centre, buyers typically have less than five minutes to pick a suite from plans, sign an offer and dump money. The atmosphere is designed to foster competition and near panic, with staff throwing red dots onto diagrams and barking out the latest sales. Suddenly people who would never dream of picking a $200 sweater in that period of time have dropped hundreds of thousands.

Why would any reasonable person take part in a condo meatfest? Because this is a social mania. It is, as I wrote hours ago, another Bre-X, a Nortel – a sure-thing way to make money in a market whose only ceiling is the azure endlessness above us.

Bubble deniers often argue the Canadian real estate market is balanced and sustainable because of one overriding factor. Sure, prices have risen too far too fast. Yeah, the average family can no longer afford the average home. Of course, debt is at historic levels even while rates are at historic lows. But, but, but, they cry, there is no hard evidence of speculation – and it was that, above all, which sank America.

As we know, this is false. Vancouver’s housing market is a pure casino. But for speculation on a global scale, just join a lineup for one of those 17,000 new condos hitting the Toronto market this year. You will find the majority of people have absolutely no intention of ever living in what they buy, while a big chunk of them don’t even plan on closing the deal. The investors are counting on capital gains, while the speckers are setting up a flip. All of them are gamblers. They all drive prices. And they’re always prelude to trouble.

Check this out. Published yesterday:

“Based on a survey of condominium industry professionals conducted by Urbanation last year, 45% to 60% of all new condominium apartments in the Toronto Census Metropolitan Area (CMA) are purchased by investors (buyers that do not intend to occupy their units). About 25% of those units will be assigned pre-registration based on assumptions from that same survey, with the remaining 75% of the units entering the rental pool.”

What does it mean when about half of all the new units are being bought by people convinced they are buying high so they can sell higher? It means this is Las Vegas, Miami, Stockton or Phoenix – cities which (like Toronto and Vancouver) had a massive rise in real estate values over the course of five years, and where the bubble ended with even higher prices.

In fact, the latest numbers from our fav cartel, CREA, support the notion of a northern replay. April, which is supposed to be the epicentre of the Spring market, saw a 14% year-over-year plop in sales. Hell, April was even worse than March, when it snowed everywhere all the time. But at the same time, average prices increased.

As I have said before, this is a textbook market top. Increasing prices on decreasing volume. The market becomes thin and unstable. Fewer large sales have a greater disproportionate impact on average valuations. Naive investors, misleading realtors and ingénue reporters focus only on prices, and telegraph to others exactly the opposite of what’s really happening. Suddenly a few thousand greater fools find themselves in a queue, sweaty palms, shallow breaths, inching towards the climax.

Those who argue the real estate experience will be different from that of countries quite similar to ours – such as Britain or America – forget one thing. All buyers and sellers are human. They fall victim to the same greed and fear. They believe what the crowd does. And crowds move markets. Up with passion, then down with panic.

I’ve seen the movie. Know how it ends.

It’s a classic.

199 comments ↓

#1 squidly77 on 05.17.11 at 8:56 pm

Are Watermelons mimicking the coming Canadian real estate crash. Everywhere they use the word fruit or melon, substitute housing.

The overuse of a chemical that helps fruit grow faster was blamed in one report by China Central Television.

But agriculture experts were unable to explain why chemical-free melons were exploding. They cited the weather and abnormal size of the melon as factors.

China Central Television said farmers were overspraying their crops with the growth promoter, hoping they could get their fruit to market ahead of the peak season and increase their profits.Link

#2 librarykaren on 05.17.11 at 9:07 pm

I’m not even going to read this. You’re over the line…dead pets not acceptable.

You’re right. — Garth

#3 S.B. on 05.17.11 at 9:08 pm

MissyBunny did it!!

#4 Cookie on 05.17.11 at 9:10 pm

I got a call from a nice lady at the bank today letting me know that as a valued client with a small mortgage they would like to lend me money. I could open a home equity line of credit to do renovations or reward myself with a vacation. When I informed her that we’re about to close on selling our house and we will be renting until prices moderate she went silent for a long time then said “I really hope that works out for you” in such a sympathetic tone that I felt bad for making her feel bad.

#5 LH on 05.17.11 at 9:11 pm

Repeat after me: condos aren’t the same as houses

It’s like comparing new cars (lose 20% when you drive it off the lot) with vintage collector’s vehicles (highly illiquid assets, but models with genuine lack of supply and solid demand will outperform, for those in the know)

Not to mention that SFH’s in downtown T.O. are still much, much cheaper on a per sq ft basis than condos. In 2009 I paid something like $200/sq ft for a beautiful semi-detached near Spadina and Bloor.

Real estate is intensely local, while suburban and exurban communities in the US got bombed out, central, liveable and accessible areas in the US are doing fine. Extra points for being international. Even more points for attracting Asians. Just look at current prices in Manhattan, San Francisco proper, the nice parts of LA, Beacon Hill / Backbay / Old Cambridge in the Boston area, Georgetown and the nice VA suburbs of DC, etc. No crash at all!

Compare T.O. to Vancouver West, North Sydney, or Central London and it looks even better (thanks to our crappy weather and bad sports teams).

The problem with all of these areas listed above is that any half-decent SFH is already priced way and above the means of the local middle or even upper middle class.

This “pricing-out” happened years and even decades ago. Borrowing to keep up with the Wongs IS NOT THE ANSWER, especially if that borrowing is being used to buy new construction (either overpriced boxes at CityPlace or houses made of straw in Milton).

For the young and disenfranchised, I suggest you AVOID DEBT, and bide your time until demographics turn and things get cheaper again. In the meantime I will be happy to take your rent ;)

#6 S.B. on 05.17.11 at 9:12 pm

Looking down South (pass the Freedom Fries, burp):

So. You’ve built yourself an empire, eh?
Well, bully for you!
What’s next, you ask? Well, now you’ve got to do what everybody does when they have an empire, of course. You’ve got to worry about it falling apart, mate!
But how to tell for sure? Let me see if I can be helpful. Here are some rules of thumb to keep in mind, thirty-six sure-fire indicators that your empire is falling apart:
You know your empire’s crumbling when the folks who are gearing up their empire to replace yours start blowing up satellites in space. And then they don’t bother to return your phone calls when you ring up to ask why.
You know your empire’s crumbling when those same folks are cutting deals left, right and center across Asia, Latin America and Africa, while you, your lousy terms, and your arrogant attitude are no longer welcome.
You know your empire’s crumbling when you’re spending your grandchildren’s money like a drunken sailor, and letting your soon-to-be rivals finance your little splurge (i.e., letting them own your country).
You know your empire’s crumbling when it’s considered an achievement to pretend that you’ve halved the rate at which you’re adding to the massive mountain of debt you’ve already accumulated.
You know your empire’s crumbling when you weaken your currency until it looks as anemic as a Paris runway model, and you’re still setting record trade deficits. (Hint: Because you’re not making anything anymore.)
You know your empire’s crumbling when “the little brown ones” (thank you George H.W. Bush – certainly not me – for that lovely expression) in country after country of “your backyard” blow you off and proudly elect anti-imperialist leftist governments.
You know your empire’s crumbling when you can’t topple those governments and replace them with nice puppet regimes – like in the good old days – even if you wanted to. And you badly want to.
You know your empire’s crumbling when one of their leaders comes to the United Nations and makes fun of your emperor, calling him the devil, and joking about smelling sulphur where he just stood. And though a few folks cringe, everybody laughs.
You know your empire’s crumbling when just about your entire military land force is tied up in a worse-than-useless war launched on the basis of complete fabrications, that every day is actually making you less – not more – secure from external threat.
You know your empire’s crumbling when almost half the soldiers in that war are high-paid mercenaries, and you don’t dare institute a draft.
You know your empire’s crumbling when you send soldiers into war with two weeks training and a lack of armor, and then you keep them there for three, four and five rotations.
You know your empire’s crumbling when a member of the Axis of Evil can test missiles and explode nuclear warheads, and all you can do about it is mumble some pathetic warnings about how they better not do that again or there will be consequences.
You know your empire’s crumbling when you even think that there is an Axis of Evil.
You know your empire’s crumbling when a rag-tag military hodge-podge of irregulars has you pinned down in an endless fight you can’t win, but also can’t lose.
You know your empire’s crumbling when you’re too dumb to even ban Humvees as a first step toward ending your dependency on a foreign-owned crucial resource.
You know your empire’s crumbling when you trade your prior moral leadership on human rights issues for global disgust at your torture, ‘extraordinary rendition’ (a.k.a. kidnaping for torture) and the dismantling of nine centuries worth of civil liberties progress.
You know your empire’s crumbling when you blow off international law that you once helped create, and undermine the institutions of international governance that you once helped build.
You know your empire’s crumbling when opinion polls confirm that every month you’re more and more despised throughout the world.
You know your empire’s crumbling when you can’t even pull off the hanging of a tin-pot murderous former dictator without turning him into a hero.
You know your empire’s crumbling when you’re the richest country in the world, but nearly 50 million of your people don’t have basic health care coverage.
You know your empire’s crumbling when the World Health Organization ranks your healthcare system 37th ‘best’ in the world, just above Slovenia, and just below Costa Rica. (And far below Colombia, Cyprus, Saudi Arabia and Morocco.)
You know your empire’s crumbling when instead of making it easier for citizens to obtain a higher education, you’re making it harder and more expensive.
You know your empire’s crumbling when your government gives tax breaks to industries as a reward for exporting your jobs elsewhere.
You know your empire’s crumbling when the so-called ‘opposition’ party can’t even turn that obscenity into a viable campaign theme and use it to clobber the worst emperor in your history.
You know your empire’s crumbling when your middle class has been stagnant for three decades, while the wealth of the hyper-rich continues to climb through the roof.
You know your empire’s crumbling when your reaction to that is to exacerbate the problem by enacting tax policies that massively increase further still the gap between the rich and the rest.
You know your empire’s crumbling when the predatory class has taken over your government and is stripping the country of everything not bolted down to the floor. And then it sells the floor itself, as well, to your rivals.
You know your empire’s crumbling when you’re spending tens of billions of dollars you don’t own on new nuclear warheads and space weapons that don’t work, to be used against an enemy you don’t have.
You know your empire’s crumbling when one of your cities drowns and your government does next to nothing before, during and after.
You know your empire’s crumbling when a massive environmental nightmare is looming around the corner, and your emperor not only ignores it, but claims it isn’t real while taking steps to exacerbate it.
You know your empire’s crumbling when your emperor is warned by a CIA briefer of an imminent terrorist attack of vast proportions, and responds by remaining on vacation and dismissing the briefer with the words: “All right. You’ve covered your ass, now.”
You know your empire’s crumbling when the same emperor drops everything to fly across the country from his vacation home in order to sign a bill intervening on the wrong side of a personal medical drama involving a single family.
You know your empire’s crumbling when gays and immigrants are used as diversionary issues to keep people from thinking about the pillaging of their country and their wallets actually taking place. And it works.
You know your empire’s crumbling when people are getting more religious and less scientific, not the other way around.
You know your empire’s crumbling when your political leaders start to be chosen by dynastic rules of succession.
And you especially know your empire’s crumbling when the most idiotic child of one of the least accomplished leaders in its history is not only crowned as the next emperor, but is even revered for a time by most of the public as a great one.
Rome? Britain? Spain?
At this rate we’ll be lucky to end up like Belgium.

#7 realinvestor101 on 05.17.11 at 9:12 pm

Garth,
Thank you for your insightful comments.
1) Is there a way to know how much the market will fall in each market (a rule of thumb) to roughly estimate the fall.
2) Are we talking here a prolonged bear market for real estate or correction before bullish run again
3) When is the right time to enter the market
I am not expecting to all the questions here. Hopefully when you get the time you can cover in future posts. Thanks again

#8 TaxHaven on 05.17.11 at 9:16 pm

“A TWO HUNDRED DOLLAR sweater”??

What world are you living in?

They asked the rich guy how much spent every month and he replied, “I don’t spend money; I only invest it.”

Trite but true!

#9 Kitchener1 on 05.17.11 at 9:16 pm

Garth, this movie seems to re run itself every 10-15 years.

We have seen in play out in the US/Ireland/Spain/various European countries etc..

It will happen here

the pundits will be suprised and “never saw it coming”

The RE cartels will call for a rebound after the 1st,2nd,3rd etc.. year of declines just like they have in all the other countries

It will bankrupt this country

If you think the US has it bad, wait for it to hit here, you aint seen nothing yet.

#10 JohnnyBGood on 05.17.11 at 9:22 pm

That’s one dead cat that won’t bounce.

#11 reality on 05.17.11 at 9:22 pm

Suddenly people who would never dream of picking a $200 sweater in that period of time have dropped hundreds of thousands. Sums it up right there.

I laid a big verbal fart at a dinner party in downtown delusion city… by having the audacity to suggest to my conversation partner that the whole thing was like a midway game at the pne… barkers and hustlers and rigged games and the whole thing was a house of cards built on a thin sheet of ice near a toxic waste dump..or something in that vein… oh and never mind the taxes, interest, upkeep, dandelion poison etc…

well as luck would have it… I was a guest that was the one visiting from out of town and the social circle and as I work in the field of mass communication based out of a couple of world capitals` people at the party all seemed to have one ear opened to catch what i was saying…in a given conversation ? go figure…

Anyway… long story short my 3 glass of wine induced rant on the idiotic intricacies of the 3 card monte scam that is the real estate market of the LM drew a stunned and deadly silence…. even the obligatory single muted cough, that seemed to resonate through the 14 foot vaulted cathedral ceiling of the 3.6mm overpriced box hanging over coal harbour, resonated like a gun shot it was so damn quiet.

Did i feel bad?.. that i shocked scuttled and offended.,.. no. not a chance. but in a room of “successful” and “connected” it dawned on me just how bad it could be as the flame sputters on this market. if these people are still lining up for their dose of kool aid along with the unwashed!?

anyway.. i am rambling.. as i realized i was dealing with :true believers” i bolted and ended up at a nice bar/restaurant where i ran into the entire scouting staff of the Canucks as they celebrated the conclusion to their annual summit of talent summary from around the world.

I also learnt that even as an armchair gm/assessor of hockey talent that my thoughts and appreciations of players true skills isnt that far removed from that of 10 year NHL veteran / 20 year pro NHL scouts… go figure.

Make money and love your family.

Tulips, cowrie shells, Westside real estate… It appears that the human penchant for embroiling in a delusional mania will always be with us.

Golden Rule:
1.)He who has the gold makes the rules

1a.) Buy the dip and then sell to the dopes

#12 charles on 05.17.11 at 9:23 pm

so you fail….people keep buying?

#13 JohnnyBGood on 05.17.11 at 9:24 pm

RE: the picture. I prefer the former to the ladder.

#14 Raj on 05.17.11 at 9:25 pm

Like Garth has said many a time, and I’m a firm believer, is when prices increase on low volume, it’s usually not a good thing.

Full Disclosure, I’m looking to buy a home in Mississauga, but there is nothing on the market. Put an offer on a place, and it had 10 offers on the first day. I put in a price I thought was reasonable, but I knew someone would outbid me. Went to look at the place on the first day, and there were people lined up outside to get in and have a look. This was NOT and open house either.

Crazy!

They asked that we remove all conditions, we would not do that – what is up with people. Does anyone care about risk anymore? ANYONE?!

Seems like reasonable offers are not acceptable, hence I didn’t get it, seems like over asking is the norm. Heck, why have an asking price, they should just have an auction, invite everyone in and give them a number, that would be much better and would probably yield a higher result.

My agent (who is a good guy) says that no one wants to move out of the area, hence more demand when something pops up.

Snap? Crackle? Pop?

Snap up those houses!
Sellers crackle up big time at the buyers.
Pop is coming anytime soon?

Sigh!

#15 JesseJames on 05.17.11 at 9:26 pm

Vancouver Roller Coaster Housing Market.

oldy but goody:

http://www.youtube.com/watch?v=hqOn5XEm86A&feature=related

#16 squidly77 on 05.17.11 at 9:27 pm

#2

The Cat wasn’t a pet, it was wild.

#17 marcus aurelius on 05.17.11 at 9:39 pm

The End is Nigh….

Well, just back from Rome (where nothing much happened after all), and it seems the little cuss who tried to hijack my Imperial name is gone from this wretched board, so I return…

I went to my favourite Green Bank today. The one that is so cynical that it has put all of its (“Triple A We Love You – Best in Customer Service”) customers onto collateral charge terms instead of standard charge terms. You know the guys. Anyway, some very nice lady who had never met me offered me Prime – 500 bps at the mere mention that I might be looking to trade up in the City of Toronto. (I like to screw with branch staff heads on the way to and from the Starbucks). She also assumed that I ‘deal’ in real estate (i.e., speculate, or ‘deal’ as defined by the local purveyor of meth).

So now I’ve seen in personal terms why the crash in Vancouver and Toronto is going to make Spain, Ireland, and the US look like a fun little kabuki show:

– Toronto is well over the 3x average income factor considered ‘affordable’

– Easy credit still lives and people with holes in their underwear are not flinching at bubble pricing (and let’s stay away from the Xenophobia – in Toronto there is a veritable rainbow coalition of F*cktards willing to sign Offers using this kind of bank credit policy, not just the Chinese astronauts)

-Government meddling in risk analysis has made the aforesaid SubUbi mendicants a ‘better credit risk’ than a borrower with, say, 50% or 75% down

-macroeconomics are against the music going much longer: a US economic meltdown may be coming as the Piper is Paid (remember how my Paisani fell, boys? It wasn’t that our armies weren’t the best, we just got caught a day late and dollar short economically, with those eastern barbarians picking up the pieces…)

If we had a majority Cabinet with courage, we’d see the end of CHMC eligibility for any purchase over $500K, ending the jumbo mortgage for for needy speculators from dusty backward places (like Woodabridge, North Yorkrea or Asiancourt), and returning to the Depression-era policy driver: affordable first-time homes for working people.

When the final curtain rings down over the next months (not years – time for one last flip?), repeat the lament: Quintilius Varrus, where are my legions? Cannae is coming.
Ite. Missa est.

#18 Mike on 05.17.11 at 9:40 pm

One suggestion.. Put a 150 word maximum on posters.
Some here think they are on the verge of writing another monster “war and peace” page turner. Not so much though.

#19 SMOKING MAN on 05.17.11 at 9:41 pm

Garty Garty Garty, you are so right about the Mob. The Mob is dumb, we all know it, but the mob moves markets.

Lets look at this, we have had for a while now, kids getting over schooled and under educated, mom and dad pushing the offspring to get that certificate that tells the man I will obey, I will be loyal, I will not steel the customer list.

Mom and dad mostly being the offspring of working class immigrants can brag to their rivals and competitors that little Johnny has his diploma. Hallelu fen loiah.

The Kids say I will not question, for questioning anything makes me that dreaded conspiracy theorist, o boy don’t want to be one of those.

The kids are via our education contorl grid are learning to be obedient compliant tax slave farm animals. They believe everything main street media pushes.

And I can tell you that main street media will keep pumping Real Estate, the MOB in Canada is dumb as a bio hazard waste.

That’s why I am still bullish on Real estate. I know it does not make sense, but I am very rarely wrong.

Buy RE the cow still has tones of milk……even though a bright person knows that it’s rediculous.

It is what it is.

#20 BrianT on 05.17.11 at 9:41 pm

#5LH-You might as well give us the address as 200/sqft for Spadina and Bloor in 2009 was a very very good price indeed.

#21 Paul on 05.17.11 at 9:47 pm

Going to Kelowna tomorrow for a few days. Interested to see how many for sale signs. I would have been one of them but we sold in 09 to avoid what is happening now. Maybe i’ll post a video if I have time to make one while i’m there. Looking at the mls, i’m not wearing red thats for sure.

#22 T.O. Bubble Boy on 05.17.11 at 9:49 pm

Even 680 News (24-hr new radio station here in Toronto) got in on the reporting that we’re in a “balanced” market. To paraphrase the commentary on the radio today: prices are up purely because of the high-end homes in Vancouver and parts of Toronto, and first-time buyers are dissapearing from the market, but that is “balanced”. Yeah, right.

And – to anyone who says the condo explosion in Toronto won’t impact SFH’s… where do you think the “move up” buyers come from? Many of the current crop of buyers for those $750k semi-detached and $1M detached homes all around the core GTA are young couples who made a decent amount on a condo and are looking to start families etc. If the tens of thousands of condos built over the past 5-10 years all drop in value, that evaporates the down payment money for move-up buyers.

Just like you’ll see a bunch of new BMW’s and SUV’s in the parking lot of RIM in Waterloo or any Oil&Gas company in Calgary when the stock price is booming, you see bidding wars for SFH’s when condos are still booming. How are the car dealerships around Nortel doing these days?

#23 domain on 05.17.11 at 9:55 pm

Pop. China gonna slow and drag us and the Aussies down…

#24 JO on 05.17.11 at 9:57 pm

The tragic part is this modified societal Ponzi scheme is being underwritten by savers through negative interest rates(including pensioners) and taxpayers through CMHC subsidies.

The massive mountain of debt – much of it having grown almost parabolically over the last 8-10 yrs creating the ILLUSION of GDP growth and artifically high asset prices – has been growing at an ever slowing rate as the YOY rate of growth in debt has slowed down. All signs indicate it ought to go negative within 12 months or so. One rate hike from the Canadian maestro will seal the deal.

Don’t worry, once the debt begins to contract and asset prices fall with unemployment rising – these blatant speculators will get bailed out at taxpayer expense until such time that currency and bond markets give the Gov’t a middle finger.

The entire charade will end the way it always has – in tragedy, debacle and farce. Sadly, those who thought they were being prudent will in the end likely get wiped out just as most speculators will. The only entities who benefit from massive credit expansion are the senior execs at finance and RE companies as well as the public sector.

To make matters worse, the provincial gov’t here in Ontario has decided that giving massive pay increases to already extremely well paid cops is the right thing to do with an era of slow/negative economic growth staring it in the face. Watch your property tax bills folks.

In the end, these clowns we call politicians – most of them well “educated” by those bastions of intellectual refinement we call “elite” universities – will run off with the house burning and claiming it was the victim’s fault. Austerity for the working man – welfare for the rich.

Ask most of your fellow citizens in 2015: How did it feel working for 50-55 % of what you make, from which you paid inflated rent to the banks/gov’t via mortgage on an inflated house, somehow had to save for “retirement”, feed the kids and deal with the elevated inflation ? They were slaves all along and just didn’t realize – after all, debt is the money of slaves – gold the money of kings.

JO

#25 Mr. Lee on 05.17.11 at 10:02 pm

“Assets go up and down in value, but debt stays constant.”
Mark Carney

“The housing fundamentals are strong and we are not in a bubble.” Ben Bernanke, Spring 2008.

#26 Game_over on 05.17.11 at 10:03 pm

My brother introduced me to your blog two weeks ago. I have to say, this is one of the most informative blogs I’ve read.
Canadian real estate dosen’t seem to make sense anymore. Sales go down prices go up and people still believe home prices are going to keep rising.

#27 realpaul on 05.17.11 at 10:06 pm

Gotta agree with you today G-Man. It’s a frantic race to the bottom of a very deep pit. A contrary voice was Tsur Somerville…resident guru at the real estate school housed at UBC….not a real degree….but geographically close who says we’re still climbing the mountain. The differance between the two of you is that he’s ‘folksy’.

Tsur says that prices are no differant today than in our parents generation ( mine were dead when he was born but no matter). ‘It’s always been a ‘stretch’ says Tsur “Buying a house means you don’t also get to go to Hawaii”. Tsur doesn’t know much about Hawaii obviously…..it’s way cheaper to go to Hawaii than it was 40 years ago…comparing dollar for dollar. Back then a house cost 2x’s income and going to Hawaii cost a kings ransom to fly on one of Howard Hughe’s TWA Clippers. Today a house costs 20x’s income and Hawaii is a day trip by comparison. Tsurs got his head up his keister….but we already knew that. Tsur doesn’t know much about real estate either….no homeowner in his right mind would ever buy a condo 40 years ago as a principal residence. You can’t raise kids in a litter box sized hole in the wall. The FTB’s are finding that out the hard way.

#28 nonplused on 05.17.11 at 10:09 pm

I noticed them spinning it on BNN as April sales being 4-5% lower than March, didn’t see the April year over year number which I exxpect is much worse. I thought April was supposed to be up as the market mosves to its seasonal high in June?

In the US some commentors are expecting another 15-20% decline before the market stabilizes. That would totally erase the gains of the bubble, but still leave prices at about the long term trend.

In Canada prices are still rising, 3 years into the trouble. This thing looks like it will take a very long time to correct. At this rate, I am guessing 5 years. The peak might come this year or next, but the decline looks increasingly like Garth’s forecast for a long drawn out affair.

Unless of course Greece busts the world banking system.

#29 Tim on 05.17.11 at 10:21 pm

Vancouver Housing market Surges thanks to Chinese

http://www.financialpost.com/personal-finance/mortgages/Vancouver+housing+market+surges+thanks+Chinese+buyers/4796258/story.html

3,779 Chinese investors moved to the Lower Mainland last year.

Westside home prices rose 77% in last five years. Glad I’ve waited on the sidelines

#30 Derp derp on 05.17.11 at 10:27 pm

Bring the kitty back.

#31 Tim on 05.17.11 at 10:28 pm

Vancouver Housing Market

“Chinese buyers frequently are absentee owners, wealthy businessmen who buy second or third houses for their wives and children while continuing to live in China for work”
Way to deystroy a community and disefranchise the people who grew up here. The Government is doing nothing to stop this. These are also the people who voted for Harper, those who just want to pay less taxes and don’t care about social programs or how clean our streets are

#32 realpaul on 05.17.11 at 10:37 pm

Unable to whine and drone brainwashed catch phrases from the glory days of socialist buffoonery or scream down the Fraser Institute study on the obese costs of the immigrant welfare state the Liberal Left Loonies have a new target……Don Cherry!!!!!!

http://sports.nationalpost.com/2011/05/17/is-coach%E2%80%99s-corner-altering-national-identity/

Ya Right….now tough talking about hockey is ‘unCanadian’ and not PC enough for the leftist loons in the Liberal Party.

What did this blog do to deserve you? — Garth

#33 Cato on 05.17.11 at 10:39 pm

I’ve spoken with a few of these gamblers, most of em are financial illiterates. Bring up price/rent ratio or PE and their eyes glaze over. Classic dumb money, no concept of risk either so most have entire net worth leveraged.

We bail out banks in 2008 to tune of nearly 100B forcing taxpayer to take the garbage off their books and they go right back to the trough and start pumping speculation in the market. The blame belongs at the feet of the banks and the CMHC and ultimately gov’t.

Start getting used to feeling of acid in your mouth. Just wait until we see cutbacks to healthcare, education & defense while river taxpayer money flows out back door as gov’t attempts to prop up the housing market and rescue the CMHC. Whats worse is the generation who had absolutely nothing to do with this mess will pay the most from the fallout – and you can bet they’ll be looking for payback when the time comes.

#34 HouseBuster on 05.17.11 at 10:39 pm

“Suddenly people who would never dream of picking a $200 sweater in that period of time have dropped hundreds of thousands.” – Garth
——————————————
$200 sweater??? These people spend more time deciding what toilet bowl cleaner to buy.

#35 Tim on 05.17.11 at 10:41 pm

Vancouver real estate surpasses New York as Wealthy Chinese move in

http://wallstreetpit.com/75400-vancouver-housing-prices-pass-new-york-and-london-as-chinese-move-in

#36 Patz on 05.17.11 at 10:46 pm

Why would any reasonable person take part in a condo meatfest? Because this is a social mania. It is, as I wrote hours ago, another Bre-X, a Nortel – a sure-thing way to make money in a market whose only ceiling is the azure endlessness above us.

The pen isn’t really mightier than the sword, but it’s a lot more fun!

#37 Jj196 on 05.17.11 at 10:47 pm

Anyone see that global tv fluff piece on the morning news hour (Vancouver) what a load of crap.

#38 Abitibidoug on 05.17.11 at 10:52 pm

Garth described a recent condo buying frenzy above, and I have a question. Where were all those buyers back in 1994 when real estate was relatively cheap?

#39 tanned34 on 05.17.11 at 10:55 pm

I bought a condo at NXT condos 4 years ago for 265000
The units closed last couple of weeks. There is 400 units all together. There are now 60 units available of which 40 are for sale. A gentleman that I met bought his 3 months ago, spent 20000 in upgrades and now is selling it for 50000 more than what he paid. Its just sitting there. There is only 1 sale out of the 20. I just dont get it…

#40 fiendish Thingy on 05.17.11 at 10:57 pm

@#6 S.B. re: You know your empire’s crumbling…

…and that’s why I’m moving from California to BC as soon as I find a suitable full time job! (Don’t want to work in Whistler or Ashcroft though, Lower Mainland, thanks)

Thanks for this eloquent summary; is it your own creation, or did you find it somewhere?

#41 Funny on 05.17.11 at 10:59 pm

Sales in Van increased 70%. Bloomberg. Look it up. Sorry to burst your ‘bubble’.

That was a price increase, not a sales increase. And what the hell do you think a bubble is? — Garth

#42 eviee1973 on 05.17.11 at 11:00 pm

As a newcomer to the City of Calgaria, land of insane living costs, in my neighbourhood, MacLeod and Heritage there is London 1, and 2. Condo building London 1, has been open for two years, half the units are not even lived in. London 2 has been open for a year, units are still available for sale from the develper, looks more than half empty. You can crawl to the Ctrain station so it should be sold out. A coworker rents a one bedroom for $1200 a month from some loser speculator who must be counting on massive increases in unit value, as it should be extremely cash flow negative, as taxes and fees would be in the $600 a month range. I rent a high rise one bedroom apartment unit at Southland and MacLeod, a lot larger for $1200. My co-worker, a native Calgarian felt embrassed about paying $1200 a month for rent, did feel a lot better after explaining the speculator was only getting $600 a month towards his $200,000 mortgage, or cash investment.

#43 Mr Buyer on 05.17.11 at 11:02 pm

Japanese bubble. I have a very nice Japanese acquaintance who told me about her first hand experience during the Japanese bubble. She guesses it started about 20years ago and like many things in Japan went off like a rocket and burnt out relatively quickly in about 5 years. She said real estate dropped off more than 50% over 3 years and has slowly declined ever since (once bitten twice shy). She bough her house on the upward climb for about 320k and it is now worth 100k. This carnage is in an area of Japan known to have the highest rates of savings in Japan and thus most likely the world. Remember that this is also a nation in which a house depreciates so you might be able to add another 50k to the price but that’s generous. This all occurred even in the face of many people have relatively considerable savings.

#44 BPOE on 05.17.11 at 11:13 pm

Nuff said
“Queues of people, insanely lined up outside a new condo development, hands in their pockets, fingering their chequebooks.”
Folks, watch for the American snake as he states the above comments are false. Remember Iraq and Vietnam. The American will lie and do any snake trick to get you to believe. A master of lying and deception. Learn the facts, read about Vancouver. The American would have you believe no one is buying Real Estate. He lies. It is his nature to lie. Everything he lies about for his benefit. Americans are not welcome in most countries because of what they represent. Innocently dropping bombs and killing people is their way of life. You know this as a FACT. Watch for more uncontrolled anger from the snake. Do not walk away from this snake, run to protect your wealth. America failed in Real Estate. It is a failed Country. Canada is not America. Canada represents goodwill and success for all people.

#45 not 1st on 05.17.11 at 11:14 pm

For the love of god, if you do buy real estate, make sure there is some piece of land beneath it that you solely control. A condo is a box in the sky and you own 1/10000 share in the land below it, not even enough room to stand in.

RE might take a beating in the coming years, but there are a lot of crappy condo investments to take the brunt of it before it seeps into SFHs.

#46 norman on 05.17.11 at 11:17 pm

SMOKING MAN…. Based on your spelling supremacy I am inclined to venture a guess that you fall under the under educated category.
Yup very credible indeed.

#47 Tom from Mississauga on 05.17.11 at 11:18 pm

#7 realinvestor101 on 05.17.11 at 9:12 pm
1) Do not worry about how much RE will fall
2) Try tracking something else like stocks, ETF, bonds
3) Yes, there are assets that that you can put your money into right now, right this second

#48 Kaganovich on 05.17.11 at 11:18 pm

Greetings blog dawgies!

Does anyone know much about Homerun Investments in cowtown? I am sort of curious to find out what it is they do exactly.

#49 Paul on 05.17.11 at 11:18 pm

#28 nonplused on 05.17.11 at 10:09 pm
I noticed them spinning it on BNN as April sales being 4-5% lower than March, didn’t see the April year over year number which I exxpect is much worse. I thought April was supposed to be up as the market mosves to its seasonal high in June?

Yes and did you here O’leary say that there’s no money to be made in the next 5 years on RE and thats why he’s RENTING.

#50 BPOE on 05.17.11 at 11:19 pm

Don’t worry Tim according to The american Snake we’re getting a 40% haircut by this summer!!!! Yup we’re going down big time. Now just somehow have to turn off the investment taps around the world. Not to worry The American plans on seizing any investors bank accounts who plan on buying Vancouver. Maybe some shock and awe artillery for those lining up to buy condos. See The american for what he is folks.
**************************************
Tim on 05.17.11 at 10:28 pm
Vancouver Housing Market

“Chinese buyers frequently are absentee owners, wealthy businessmen who buy second or third houses for their wives and children while continuing to live in China for work”
Way to deystroy a community and disefranchise the people who grew up here. The Government is doing nothing to stop this. These are also the people who voted for Harper, those who just want to pay less taxes and don’t care about social programs or how clean our streets are
.

#51 Patz on 05.17.11 at 11:19 pm

#6 S.B. You know your empire’s crumbling…

Good one—very good!

#52 Paul on 05.17.11 at 11:19 pm

That would have been on the Lang/O’leary show not BNN.

#53 Cellar Dwellar on 05.17.11 at 11:21 pm

I spoke with a tradesman today who was renegotiating his mortgage for his recreational property. He has no RRSP’s, no pension plan, no savings, on his 2nd marriage, paying for the kids from the first marriage,
I looked at him and said, “Guess yer workin til ya die huh?”
He smiled and said,”Yup”

#54 Siddelly on 05.17.11 at 11:22 pm

From Extraordinary Popular Delusions and The Madness of Crowds;

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

#55 Mr Buyer on 05.17.11 at 11:25 pm

Its worth mentioning that when I explain the increases in real estate values in Canada in the absence of wage and productivity increases and relative overall economic decline all of the Japanese people I talk to quickly equate it to being a bubble. I guess it is harder to identify a bubble until you have been through one. The people here lay the fault squarely at the feet of the banks. These are not people prone to conspicuous consumption or credit addiction. While speculation ran rampant my limited experience indicates a majority of people were simply securing housing, a basic human need, in the face of an exaggerated supply of money and find themselves upside down in their houses to this day. We should stop mincing words here. Banks have and are flooding the market with money and securing massive amounts of interest payments.

#56 bridgepigeon on 05.17.11 at 11:27 pm

32 realpaul
What do you think of this YouTube video? : Don Cherry signing bombs.

#57 disciple on 05.17.11 at 11:29 pm

Is no one asking themselves, “Oh golly gee, why would the media lie to me?” Is that Silence I hear…fluoride and vaccines seem to be doing their job with you people…
4 people control all media in Canada and they have regular meetings with one another, and then disburse the “news” to puppet thinktanks like the Fraser Institute, which then trickles down to the serfs. I only listen to the news to see what they are lying about now…it’s kind of fun…and sad at the same time unfortunately. But I’ll do my bit to help my fellow man…

#58 Nostradamus Le Mad Vlad on 05.17.11 at 11:35 pm


I noted the irony in the previous
Dead Cat Bounce pic, but obviously #2 librarykaren did not.

To each their own, I guess. So RE has reached its pinnacle and now this is the Prelude to the way down, barring small pockets of land, such as north and west Vancouver.

There will always be buyers and sellers, it’s just they will take longer to make their moves as this world chews up and spits out what it doesn’t need or want anymore. Fukushima, and what the after-effects are, will also play a large role for the future.

CREA, the m$m, TPTB, fed. and prov. talking head spin doctors will do all they can in a desperate attempt to keep the ship afloat, but at the right time, TPTB will pull the plug, take their profits and it will be way worse than 1989 all over again.
*
#11 reality — “1.)He who has the gold makes the rules” — See following link. Soros sells his gold — why? Does he know something is on the cards, and wants to buy back in cheaper prices? Econnomy dips slightly. California Having a public bank instead of the US Fed.

Nukes This what Dad (Nostradamus Jr.) has maintained all along — the US is about to bankrupt TROTW and itself through wars, etc. IMF Who will front the IMF? How about Sarkozy? After all, Sarkozy ordered the Irish to re-take the vote after they had first rejected the Eurozone overtures. Now look at it.

Connection? Bernie Madoff and Strauss-Kahn — both in charge of lotsa money, and both in the slammer.

Spain Stuff happening there as well.

Stephen Hawking What anyone says here is one thing, but the experience of death proves the opposite to each person.

Chaos — Are these two one and the same? Video link in.

#59 Mr Buyer on 05.17.11 at 11:42 pm

A small proportion of 20 something Japanese women are really taken by the apparent freedom of western countries such as Canada with its relaxed social and cultural expectations. While in conversation with one such woman I asked how she would feel if she borrowed so much money that a huge portion of her salary was dedicated to repaying debt. It took some time for her to understand what I was saying and I could see the vitality drain from her being as she came to fully understand what I was saying. She then looked up at me defeated and asked what would be the point of working if her salary was already spoken for. Here in Japan many families remain as a unit well into the offspring’s adult life so the children can amass savings before striking out on there own (if ever). I should clarify that and say here in Japan outside the major urban centers as I am told life is markedly different in cities like Tokyo. I went on to describe the divorce rate and level of debt people carry in Canada and frankly many of the Japanese have a difficult time believing me. Their immediate question is the impact upon the children. In closing I would like to point out that in many Japanese families the women hold all the cash and while many things are tolerated it is perfectly acceptable for a Japanese wife to divorce her husband if he loses his job for whatever reason. All of my Canadian friends that wound up divorced from their Japanese wife went through a period of unemployment and beginning to live off the savings before the boom got lowered. A husband taking a year off on unemployment insurance is not an option while 3 part time jobs 60 or 70 hours a week is okay.

#60 AG Sage on 05.17.11 at 11:44 pm

>#11 reality on 05.17.11 at 9:22 pm

The previous TO resident (recent transplant) I mentioned a possibility of a housing bubble to went into full on screeching attack mode. It was like facing Donald Sutherland at the end of Invasion of the Body Snatchers. (Turns out said person had bought a house just 2 weeks before.)

TO person I talked to last night (also a recent transplant) said, oh yeah, they’re saying it’s just like the U.S. only later. That was it, end of conversation. Probably a renter.

The earlier person was far more entertaining.

>#16 squidly77 on 05.17.11 at 9:27 pm
#2

>The Cat wasn’t a pet, it was wild.
Exactly. It was an invasive predator on a Pacific Island threatening an endangered shorebird nesting ground.

Context is everything.

#61 grantmi on 05.17.11 at 11:47 pm

He’s coming boys and girls!!!

One of the Horsemen of the Apocalypse!!!

http://bit.ly/kxNIIa

#62 reality on 05.17.11 at 11:57 pm

12 charles on 05.17.11 at 9:23 pm

so you fail….people keep buying?

-not speaking exclusively of re in this instance. there are always new asset classes evolving that will offer even more opportunity for greed to prevail its tail of windfall and woe on the wagering class.

#63 Mr Buyer on 05.18.11 at 12:01 am

The Japanese bubble and golf. One Japanese businessman I know told me about a bank manager actively encouraging him to buy a golf membership during the height of the bubble for about 140k. The banker assured him quite vociferously that it was a wise investment sure to appreciate handsomely and he would be happy to give him a preferred loan so as not to dip into his savings. The idea was that the rate of appreciation demonstrated recently would offset the relative pittance of interest and it would thus pay for itself in a matter of months. Now this was the bank president not a loans officer and over a good old boys dinner. Well my acquaintance bought the membership and watched it tank with the bubble and still holds the membership now worth 1k. He paid for it out of his savings so as not to endure interest payments and holds a deep suspicion regarding banks and banking.

#64 BuBu on 05.18.11 at 12:01 am

“There were no Canadian cities on the top 10 list of investor-friendly cities: Tokyo, Singapore, Hong Kong, Seoul, Shanghai, New York, Washington, Los Angeles, London and Manchester.

Most of the money went to the United States at $2.6-billion, followed by Europe with an inflow of $2.2-billion. There was a net outflow of money from Asia, at $3.3-billion.”

http://www.theglobeandmail.com/report-on-business/economy/canadian-real-estate-investors-among-worlds-most-active/article2024661/

It looks like smart investors are looking at other markets….

#65 LB on 05.18.11 at 12:03 am

#5 LH

Don’t count on it. With the huge numbers of rentals – houses,condos and suites – coming on Craig’s List daily, many of these “investments”will be empty, and depreciating,for a long,long time.

Can you say “stagnant,non-performing asset”?

#66 Will on 05.18.11 at 12:06 am

@realinvestor101

1) Expect markets to over correct on the down. Just as people are perma bulls when the bubble is inflating, perma bearishness will last a long time.

2) Prolonged bear market, IMO. Government intervention may delay the pain and mildly re-inflate the bubble ala Australia, but hopefully not.

3) It’s been 6 years since the States’s RE crash, in many markets I wouldn’t call it a good time to buy yet. Many Canadian’s getting suckered into PHX real estate…

#67 specality? on 05.18.11 at 12:12 am

#19 SMOKING MAN on 05.17.11 at 9:41 pm

kachingle mon fringle!

#68 John on 05.18.11 at 12:44 am

All of my Westside Vancouver friends are drowning in koolaid. All of them have a vested interest in prices continuing to spiral upwards, regardless of fundamentals, and so the talk is all about “X house selling for an incredible Y price”. Most studied economics. None remember the past, despite all of them being there during historical corrections. It really is like a drug; delusion is everywhere, and very firmly entrenched. Its tough being an outrider.

#69 Young Old Fart on 05.18.11 at 12:47 am

*%#$….I missed a dead cat picture?????

:o(

#70 Dark Sad Monster Bunny on 05.18.11 at 12:49 am

35 Tim – just to point our that the linked article actually
refers to the price to income ratio – well covered in the
demographia studies – it does not refer to the absolute
price of housing.

#71 Devore on 05.18.11 at 12:57 am

#29 Tim

3,779 Chinese investors moved to the Lower Mainland last year.

Westside home prices rose 77% in last five years. Glad I’ve waited on the sidelines

I’m sure you’d be selling your house, and there would be a line up of Chinese just for your house today, right?

#72 Peter on 05.18.11 at 1:02 am

The basic problem is too much debt. This problem has been building for a long time.

“Debt is the slavery of the free”
Publilius Syrus quote 1st century BC

“Death’s the discharge of our debt of sorrow”
Seneca quotes (Roman philosopher, mid-1st century AD)

“Debts and lies are generally mixed together”
Francois Rabelais quotes (French author,1483-1553)

“He that dies pays all debts”
William Shakespeare quotes (English Dramatist, Playwright and Poet, 1564-1616)

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them”
Ogden Nash quotes (American Writer of humorous poetry who won a large following for his audacious verse. 1902-1971)

“Debt is a prolific mother of folly and of crime”
Benjamin Disraeli quotes (British Prime Minister and Novelist. 1804-1881)

Source: http://thinkexist.com/quotations/debt/

#73 ruraldude on 05.18.11 at 1:03 am

Garth!
I’d be interested on your take on agricultural land, maybe even one blog issue for us country cousins that follow this blog out of interest.
From what I see out in the country stupidity doesn’t end at the city limits.
Oh did I forget to mention, this boom is different.

#74 LS on 05.18.11 at 1:36 am

Check out this graph on House Hunt’s blog. Picture is worth a thousand words!

http://househuntvictoria.blogspot.com/

No bubble here, move along.

#75 R on 05.18.11 at 1:55 am

Speculation sunk the US housing market…

Not to mention the housing bubble was an attempt to reinflate the previously popped tech bubble. That and the unprecedented and largely unprosecuted mortgage fraud.

#76 Utopia on 05.18.11 at 2:11 am

Some terrific posts today. I hardly know who to respond to first so I will just say “well done” to all the Blawg Dawgs who demonstrate every day that they know exactly what is going on in our housing markets.

Todays article was really well done Garth. You nailed it.

#77 Whistle punk on 05.18.11 at 2:35 am

Why should we care about anybody else, the stupid ones that sink themselves into realestate debt is their problem. You can’t fix stupid and there are lots of them with a realestate boner.

Sit back and watch the chaos when the bubble starts to pop.

In my mind any of these stupid ones should be held accountable for their actions. Tough luck live on the streets with the rest of the homeless people.

Bring on the realestate correction a slow painfull correction isn’t the way to go. One shot to the head is needed.

#78 GTA Girl on 05.18.11 at 3:30 am

I live in a affluent area north of TO. Homes here sell fast, all close to a million or over. Over last month, 5 homes in my subdivision, all languishing. One agent who has a house is well known for selling fast and has ear to ground for pricing. She’s dropped price, still no buyers. Yesterday another house just went on market. This guy thinks his place is worth $2.2mill, while right directly across street is a home on market for 2mos asking $1.3, with no bites. All same age, same large lot size.

There are no buyers.

#79 GotDeceived on 05.18.11 at 4:04 am

Garth,
You are in the same league as those predicting end of the world on May 21, 2011. It is boring when all that you’ve been blogging about doesn’t happen at all. Old fart, may be, you should take ‘Levitra’ to enjoy the ‘house porn’. Get the dysfunction treated.

Seems realtors have more time on their hands lately. — Garth

#80 Canuck Abroad on 05.18.11 at 4:25 am

Hope springs eternal among sellers. This place is back on the market at a very optimistic 968k, even though no unit in the complex has EVER sold for more than 675k. I guess he’s hoping for one last gasp among the greater fools. Sales history is so easy to find out, why do vendors even try to pull this stuff?

http://www.realtor.ca/propertyDetails.aspx?propertyId=10605623&PidKey=-259938886

#81 Tim on 05.18.11 at 4:49 am

True, cops are overpaid, I did some construction work for one, trust me the house was not your typical bungalow….

#82 Steve on 05.18.11 at 5:19 am

The comments are getting longer and longer. Too bad the long ones don’t say anything.

#83 bigrider on 05.18.11 at 7:12 am

Garth thanks for addressing the condo hump fest going on in T.O.

I am forwarding today’s link to your site far and wide.

#84 Chris on 05.18.11 at 7:22 am

Hey Garth, is there anything we can invest in to capitalize on falling house prices and the misery of greater fools?

#85 SMOKING MAN on 05.18.11 at 7:53 am

#46 norman on 05.17.11 at 11:17 pm
You Said:
Based on your spelling supremacy I am inclined to venture a guess that you fall under the under educated category.

Perhaps under schooled.

Norman I see you are a perfect example of what I am talking about. Because of bad spelling and grammar, you have been taught and conditioned to think that any person that can’t or won’t spell well must be an idiot.

Education and Schooling are two different things. The fact that you can’t see it means the education system did a grand job with you, mission accomplished . Congratulations you win the prize. For you my friend, master of the keyboard keys knows the difference between Their, There, and They’re I bow to you.

Darn Dyslexia, If it was not for that, I could have gone on to higher schooling, learned to be a certificate toting, memorizing regurgitating Zombi, an obedient un questioning tax farm slave content to make a lousy 50k a year and be happy about it.

Now I am trapped I am stuck in this BUY SELL, crush my rivals mode effortlessly making millions, and being insulted every time I type something. I am so ashamed.

#86 OttawaMike on 05.18.11 at 7:58 am

Garth,
I see you did learn a thing or two in your time with the Conservatives.
I like how you spiked my link after mistakingly putting it up yesterday and then realizing that it went to Moneta’s blog. If I recall correctly, she was the blogger who dared to once disagree with you on here.

The link went to a like minded website and it was just plain mean spirited to kill it. That blogger provided valuable content to your blog over a considerable period of time, the least you could have done was kept the link posted.

The blogger in question tried repeatedly to use this site to generate traffic for her own, as a large number of other people do consistently. Those links are routinely removed, since I’m not running a reference service. Yours was inadvertently missed. The removal had zero to do with whether another blogger agrees or disagrees with my words. BTW, your political comment is cheap. — Garth

#87 Another Albertan on 05.18.11 at 8:21 am

#64/Bubu:

I think everyone is taking the Globe article out of context. If you read between the lines, they are referring almost entirely to commercial properties whose large and deep-pocketed investors are the likes of Caisse de Depot, OMERS, Teachers, AIMCO, etc. These are pension funds with the contacts and means to acquire and manage investments on a global scale.

These are not investments that “regular” Canadians are getting into in a direct manner. I have a hard time believing that individuals are getting transactions that are an ocean or more away. If it is indeed the case where individual Canadians are sidestepping Florida, California, and Arizona, where it’s hard enough to be an absentee landlord a 3 hour flight away, we have entered a new phase of the Bizarro World.

Case in point – I ran across a small private company with seemingly decent funding, registered in New York, and with a mailing address on Lexington in NYC. They’re trying to kick off a new REIT. Here’s the kicker… everyone lives in Calgary. They’re using their middle names so no one will recognize them when they sleuth or pitch deals.

When that level of indirection and cloaking to try to get a leg up on commercial real estate transactions here at home is reached, maybe the Canadian market has hit the saturation point?

Everyone else’s mileage may vary.

#88 realpaul on 05.18.11 at 8:55 am

I don’t know what all the kafuffle is about but realpaul was on this question more than a year ago

http://fullcomment.nationalpost.com/2011/05/18/herbert-grubel-the-invisible-price-tag-of-immigration/

Of course all the trained seals instantly started slapping and barking calling me all the usual names with great righteous zeal. It turns out…..I was right.

But unrealized in the true fact of immigration …when treated like a Liberal PC crying towel….has an even greater cost to Canadians…that of the massive burden placed on the housing stock. Foriegn nationals…under the pretense of being prospective immigrants ( most simply use the Canadian passport as a doormat and leave the country to continue their business elsewhere after leaving their children and elderly parents for us to pay for) have been allowed to untaxed money into the country to compete with the heavily taxed Canadian .

This would only be fair if Canadians were allowed tax free off shore accounts so that they too could build up a tax free war chest with which to use in the marketplace. As it is the government applies a differant set of rules to Canadians than they do to so called ‘immigrants.’

Lets hope that after being hamstrung by an ineffective minority government being held captive by the whacko leftist Liberals and NDPissants that reform will come into this lopsided file.

#89 The American on 05.18.11 at 9:00 am

BPOE, I never said 40%+ haircut by this summer. There you go again with your lies. I said the Vancouver market will have a 40%+ correction and it will be a long and painful process, just as it has been in the U.S. Who’s the lying snake? Oh yes, that would be you. Once again, you’ve been caught. Again, you’re being a little too defensive about my argument for anyone to take anything you say seriously. Too telling as usual.

You are saying that it is proof the market will not correct and the prices will only continue to rise because Garth wrote, “Queues of people, insanely lined up outside a new condo development, hands in their pockets, fingering their chequebooks.” Can I let you in on a little secret, BPOE? We’ve already been there/done that in the U.S. in cities like L.A., San Francisco, New York City, Chicago, Seattle/Bellevue, Miami, Portland, Dallas, and so on. That’s the sure tell sign you are in a huge bubble. BPOE, like I said yesterday, you only want to see the similarities of the markets if it supports your argument the market will only continue to rise. But you fail to recognize them if it would show your market is already correcting, which it is.

BPOE, would you care to explain to our wonderful readers and bloggers why places like Fairmont Pacific Rim reduced prices on all remaining inventory by as little as 25% to up to 44%? :-)

If anyone else would like to provide recent price reductions in the area, feel free!

#90 RentinginRosedale on 05.18.11 at 9:03 am

#6 S.B. on 05.17.11 at 9:12 pm

You’ve got too much time on your hands pal. Your anti-US diatribe was silly, only got thru the first 3 lines before PgDn

#91 Utopia on 05.18.11 at 9:10 am

#46 norman on 05.17.11 at 11:17 pm

“SMOKING MAN…. Based on your spelling supremacy I am inclined to venture a guess that you fall under the under educated category”.
——————————————
It’s called dyslexia Norman. Plenty of people have it. It does not subtract from intelligence. We already know Smoking Man is a pretty smart guy so the spelling police don’t give him tickets anymore.

#92 Mr. Reality on 05.18.11 at 9:13 am

#50 BPOE on 05.17.11 at 11:19 pm

Don’t worry Tim according to The american Snake we’re getting a 40% haircut by this summer!!!! Yup we’re going down big time. Now just somehow have to turn off the investment taps around the world. Not to worry The American plans on seizing any investors bank accounts who plan on buying Vancouver. Maybe some shock and awe artillery for those lining up to buy condos. See The american for what he is folks.

BPOE – If only you understood how credit markets and liquidity works. I guess that’s what you get with a grade 9 education and maturity level.

BPOE i wish i could short you. I’d make a killing.

Mr. R.

#93 Amarillo on 05.18.11 at 9:19 am

Announced by all the trumpets of this blog,
Arrives the bust, and driving ’round the hood,
Sales seem nowhere to alight: the realtors’ signs
Hide stress and grief and anxious breast.
The spending and borrowing stopped, the lawyer’s feet
Delayed, all friends ignored, the house-owner sits
Around once-glorious fireplace, enclosed
In a tumultous privacy of debt regret.

#94 EX-Cowtown on 05.18.11 at 9:25 am

Caught a BCTV blurb last night bragging how Westside Van prices are “so high, they are skewing the national averages”. It’s funny though, the focus on the story was on a lady who had enough and cashed out. Basically, she was taking the money and running. The tone of the story was that HAM will save us all. The most hilarious part was that they trotted out Sydney, OZ as another example of how HAM “blessed” the RE market.

I guess that they didn’t get the memo that OZ RE is imploding. But don’t let facts get in the way of a good story.

You’re right GT; Van RE is like Bre-X. The evidence that gold had to be there was that the price of the shares was so high.

I missed out on Bre-X. I had worked in gold exploration and the whole thing stunk to high heaven to me, so I didn’t invest. Other people I knew made small fortunes, but they had special circumstances that either forced them to get out a t a certain time (needed to pay for the house they were building) or lucked into the stock (literally bought it at pennies years before and found the share certs lying in a sock drawer). Unfortunately, many more got killed.

Moral of the story is you don’t have to be smart to make money in a rising market; luck will work just fine too.

But planning on being lucky ain’t much of an investment plan.

#95 45north on 05.18.11 at 9:27 am

in my backyard there is a 12 foot high cedar hedge. To trim it I put wings on my aluminium ladder and then rest the ladder directly against the hedge. I climb up the ladder and the hedge holds me up. You can get the wings at Rona ($31.99) or Home Depot.

They’re called “stand-off arms”:
http://www.rona.ca/shop/shop?page=5&sort=4&menuId=4294967254&keywords=aluminium%20ladder

Kitchener1: If you think the US has it bad, wait for it to hit here, you aint seen nothing yet.

that’s my feeling. Mark Hansen says that the percentage of mortgages is more than 28.4%. What he really means (I think) is that more that half of people with mortgages are effectively removed from the housing market.

http://mhanson.com/blog

#96 kilby on 05.18.11 at 9:33 am

#18 Mike:
I just skip the really long posts….never read them.

#97 T on 05.18.11 at 9:40 am

Hello Garth,

Just finished making arrangements with ING Bank to pay-off the balance of our mortgage. We took advantage of the historic low rates to pay-off our balance faster…………and now effective June 20th the entire balance remaining will be completely paid-off. At 46 years old our family and I are now 100% debt free! This is how you use historic cheap rates to your advantage…….by paying down debt not by adding more to it!!!

#98 Utopia on 05.18.11 at 9:40 am

#86 OttawaMike

“I like how you spiked my link after mistakingly putting it up yesterday and then realizing that it went to Moneta’s blog”.
———————————————————-

Moneta has a blog? How the hell is it possible that I read this site almost every day and never knew that? I really have to start looking more closely at the links people post.

#99 brunt on 05.18.11 at 9:43 am

An anecdote from a conversation with my mother last night.

My parents bought a one year old house in 1961. This house cost $7,500, or exactly 2 1/2 times my father’s annual income of $3,000. Note that this was at a time when interest rates were pretty close to what they are now.

Fast forward to 2011, and in this very neighbourhood, with almost identical houses for sale (the house they bought is not currently for sale), the asking price is $350,000.

Now, average wage in this town is now about $50,000 or so. At the same ratio of price to income would put its value at about $125,000.

But the house is now 41 years old. So in reality, much of its useful life has been used up, and we would expect it to sell for closer to $90,000 or so.

So why is it now selling for almost 4 times what it sold for before? It is still just as far out of town as it used to be. There are far fewer jobs in this town than there used to be. Interest rates are pretty close to the same. Houses have not become any scarcer (quite the contrary, actually). There is still plenty of vacant land available in the area, so it cannot be the rarity of land.

The answer, as our good host has been pointing out for quite a while now is simply a combination of two things:

1) Credit becoming available in vast quantities to people who would not have qualified for it historically, and

2) Speculation, greed and vanity. A mindset of real estate as being the path to “easy riches” – it’s OK to pay too much, because some greater fool will pay even higher in the future.

As Garth always points out, this will not end well. The RE bulls always come up with claims that basically amount to “it’s different this time”, or “it’s different here”. Hint, go study history. It’s not different now or there. Conditions may exist far outside of historical norms for a while, but like a spring, they will snap back to where they should be. And again like a spring, will often pass the normal position to the downside before settling near its historical position.

And please, spare me the “but everybody wants to live here” rhetoric. No, they don’t. You talk to people there, and of course they want to live there – that’s why they are there. If you would talk to people here, they would rather die than live in Vancouver, they want to live here instead. If you are going to try to make the appearance of doing statistical analysis, at least take a bit of an effort to remove bias from your observations to make yourself look like less of a fool.

The only thing worse than being wrong and being shown to be a fool is to be right too early and to be thought to be a fool.

If you want to make a cogent argument using verifiable numbers to demonstrate on how this bubble will not deflate, I am all ears. But you can’t, because trees don’t grow to the sky, and things ultimately cost what people can afford to pay.

Garth, keep up the good fight. I may not agree 100% with what you say, but it’s close enough for me.

#100 Amarillo on 05.18.11 at 9:46 am

#88 Realpaul has a point re the trained seals barking when the cost of immigration (or other sensitive topics) is brought up.

After all, it’s just not Canadian to discuss certain things in Canada! This is the unfortunate legacy of many years of Liberal social-engineering and human-rights tinkering.

Unfortunately, Canada is coming into a number of significant challenges and we need honest discussion.

Our p.c. culture and human-rights police prevent us from having an honest discussion about certain verboten topics including immigration.

Hopefully Mr. Harper will defang the human-rights tribunals so that the CBC lefties cannot continue to set the agenda for what may even be discussed.

#101 Sam Brookes on 05.18.11 at 9:47 am

The American, I found these. I think you’ll get a kick out of ’em! Looks like there’s more price reductions than our agents want to let on!!!

Kitsilano price reductions…
http://www.kitsilano-condo.com/kitsilano-real-estate-may-12-2011.html

Downtown Vancouver price reductions…
http://www.vancouver-downtown-condo.ca/whatsnew_archives.html?blogart_month=5&blogart_year=2011&blogart_day=false&blogart_start=0

Olympic Village, now called whatever the hell it is…
http://www.vancouversun.com/business/Price+units+lower+still+bargain+expert+says/4308648/story.html

My personal favorite as you can see the melt in West Vancouver neighbourhood, a huge drop from February to April in prices, over 10 percent…
http://www.yattermatters.com/2011/04/only-the-shadow-knows-vancouver-real-estate/

Vancouver market bifurcating…
http://worldhousingbubble.blogspot.com/2011/05/is-vancouver-market-bifurcating.html

BPOE – that means Beating Propaganda Onto Everyone – I do not think you get it, pal. This is not a good sign for us.

#102 April on 05.18.11 at 9:48 am

Garth, after listening to a CBC radio report this morning[0710] on foreign ownership in Vancouver [you were quoted] I’m not sure what to think re buying, or not, Van RE at this time? The speaker seems to think we should be encouraging what’s happening which will increase prices.

#103 evanescence on 05.18.11 at 9:49 am

To Mike #18,
Let them be. Some may like to write something about nothing. Nothing is a variety of something.
And “war and peace” is not such a page turner (still worth reading) even in original. But Garth is.

To Funny #41
Right, “Look it up.” [i]Bubble[/i] is something insubstantial, groundless, or ephemeral. That is a ‘real’ estate’s creation, not Garth’s, why to apologies?
And I thought I knew nothing.

#104 disciple on 05.18.11 at 9:49 am

Reading has become a lost art. That’s why Garth needs to start off with a photo each time to keep his logically-challenged readers interested. But to be sure, our earliest and most advanced forms of communication were graphic in nature, with the written/phonetic languages introduced by the sea-faring globe-trotting Phoenicians-ancestors of our modern private banking families…

#105 disciple on 05.18.11 at 9:53 am

Why do we continue to argue over the “cost” of things? There is plenty of wealth to go around. The “cost” only becomes an issue when your real rulers are asking you to pay them back for social services with “currency” that they never actually lent you in the first place. Austerity is coming to North America, as liquidity will dry up (private banking families hoarding cash instruments). Be prepared.

#106 EX-Cowtown on 05.18.11 at 9:54 am

Further on the BCTV segment: The guy who ran the RE firm that they interviewed said “Prices are so high that I could never afford to buy the house I’m living in now”.

That should be a massive red light. Even the pushers are priced out.

#107 this is wonderland on 05.18.11 at 9:59 am

#73 ruraldude

Garth!
I’d be interested on your take on agricultural land.
——————————————————————–
Ditto.

Like to hear your opinions on small rural areas, such as Schomberg or Tottenham.

Again, when can we expect the next book?

Thanks.

#108 Joe on 05.18.11 at 10:05 am

You’ve only got to try and sell something on Craigslist today to know what illiquid feels like, even if it’s just a baseball glove. They either want it free, or you think you’ve got a deal lined up and they fail to show, or they want you to knock off another 20%. I have a couple of boxes of “stuff” that I’d love to sell, but I hold onto it because I can’t sell it for what I paid. I figure, oh well, maybe it’s worth more to me to hang onto instead. Glad it’s just Wedgewood china and some school books, I never paid several hundred thou for them. Will houses in Vancouver and Toronto one day be likened to tulip bulbs and Beanie Babies?

#109 Young Old Fart on 05.18.11 at 10:10 am

#96 kilby on 05.18.11 at 9:33 am

#18 Mike:
I just skip the really long posts….never read them.

DITTO!!!

#110 disciple on 05.18.11 at 10:16 am

Putting on my proverbial old glasses through which I used to view the RE market, I don’t see the fall in volumes or sales in my neck of the woods yet. Virtually all of the real estate agents signs have a SOLD banner on them, (including mine, of course). I live in a Toronto burb of SFH’s, working class stiffs with plenty of borrowed cash for nice cars it seems, Hummers galore (what kind of stupid creature would drive a hideous beast like this, it better have bullet proof windows to make up for being so ugly:).

Homes here are still selling for close to half a mil plus…anyway, if I didn’t know any better, it seems like it’s all blue skies ahead for home ownership here, no sign of any kind of soft or hard landing at all. But, alas, I do know better…I feel…pity and sorrow for them…what is that…oh it must be my conscience…allow me to introduce that concept of conscience to you robotoids on this blog…

#111 bigrider on 05.18.11 at 10:19 am

Italians still cementing every brick, nailing together every piece of lumber and buying , selling, flipping every housing structure you can think of in the GTA.

The absolute KINGS of housing spec infatuation !

“Filio, la terre e sempre la terre”

#112 VICTORIA TEA PARTY on 05.18.11 at 10:20 am

TWO-BY-FOUR ACROSS THE FOREHEAD! NO WON-TON SOUP FOR YOU!

I liked the following paragraph of Garth’s so much that I decided to plunk it down right here!

“Bubble deniers often argue the Canadian real estate market is balanced and sustainable because of one overriding factor. Sure, prices have risen too far too fast. Yeah, the average family can no longer afford the average home. Of course, debt is at historic levels even while rates are at historic lows. But, but, but, they cry, there is no hard evidence of speculation – and it was that, above all, which sank America.”

WHAT’S SHAKIN’ TO THE SOUTH

It’s always nice to be able to re-enforce such with this example from Dr. Housing Bubble in California.

The warning? Standby Mrs. and Ms. Newly-Annointed Canadian real estate bunnies: It’s so over! As goes the US so, eventually, goes Canada. Better believe it.

“Multiple sets of indicators are clearly showing that the (US) housing market is entering a second winter. (US) Home prices are inching closer to cycle lows and indicators of housing distress are rampant throughout the country.

Home prices during the troubling five years of 1928 through 1933 saw a decline of 25.9 percent nationwide and this was during the Great Depression.

The latest Case-Shiller data shows that home prices in the 20 City and 10 City composite measures are down by 32 percent from their 2006 peak.

This is now nominally the worst housing correction since the Great Depression.

The continuing correction in (US) housing is economically challenging middle class households in ways vastly different from those during the Great Depression.

What is troubling about the new cycle lows is that the liquidity injected into the banking system by the Federal Reserve simply delayed the inevitable while diverting precious resources to a broken financial system…”

THE PURPOSE OF THIS ABOVE QUOTE IS THUS…

What needs to be noted here is that the USA, not a sprinkling of sharp-eyed Chinese real estate wannabes from Shanghai, is Canada’s economic BREAD AND BUTTER.

It’s all very nice to experience Global TV-orgasms about “buyers” pouring off a Triple 7 at YVR, from some exotic and distant Oriental port, bringing scads of near worthless Greenbacks in order to help divest China of her American financial obligations pending the collapse of the American Empire.

Vancouver RE sellers, in participating in this noxious, nutty, imperious, self-loathing behaviour do not look like sellers to be respected and feared by the Chinese buyers. No Way!

They’re looked upon with utter disdain (white trash?). They’re ninnies; road kill; suckers. They’re soiling their community’s nest by destroying the Vancouver Middle Classes or whatever’s going to be left of them thanks ALSO to higher costs of living including taxes!

As for the local Hell-bound real estate agents? They’re just some of the millions of world-spanning spikes helping to hold down the rails of the onrushing Chinese Empire.

Choo-choo, indeed!

#113 bigrider on 05.18.11 at 10:25 am

Italian advice.

“filio, no precopare, la casa e sempre uno ‘investamento’ ”

The philosophy above will never change among this group of people until the older and most of the current generation dies off.

#114 disciple on 05.18.11 at 10:47 am

bigrider:
Yes, the earth remains in the land, but only if you do not buy it with borrowed money that does not even exist.
Every mortgage agreement contains this beauty of a line:

“You, the mortgagor, confirm receipt of the loan amount with your signature” or some stupid legalese like that.

Let me explain what this is. This is the bona fide clincher of the fraudulent activity that the lender is committing. You do not receive the funds at all, usually the supposed “funds” are “paid” to the seller of the property some time after closing, so by adding this line to the mortgage document at the time of signing, the lender is tricking you into acknowledging receipt of funds that you never received. The promise to pay is your signature, and nothing more.

You have given the lender your house and at the same time declared that you have received money for your signature, when you actually DID NOT. Check it out!!!

#115 Rocket Boy on 05.18.11 at 10:59 am

This is so incredible – a few years back a well noted economist who’s pocket was surely padded by those in the real estate sector noted that the reason for the sudden crash in the Toronto Condo market back in the late 80’s had been attributed too the fact that over 30% of buyers were investor – and the link was, as they had trouble locating tenants for their overly priced rat traps – they sold off in a panic herd, and today – the numbers are even higher..WTF…why is it that a journalist, worth is grain of salt can’t quote that article and heed the warning of a pending disaster…

I guess news reporting has nothing to do with actual reporting – but to write about topics that won’t offend any of their advertising $$’s…

And on a lighter note – Mark on your Calender – May 21st 2011 – the day mankind is supposed to reel from what the prophets have warned us – death and destruction….and in October 2011 – our final demise…how’s that for a way to celebrate the long weekend….but I say man will beat any heavenly God’s by destroying ourselves…a report out of Japan was leaked that one of the reactors is in “full meltdown” – and the core is reported to have melted into the earth that is measured in many metres and sinking fast – gotta love it – the news is about Arnie and our very existance is at stake…Gotta love mankind –

#116 reality guy on 05.18.11 at 11:04 am

Was with a group of older chinese people playing majong last week.

Discussion while playing the game was Real estate. They truly believe the prices cannot go down and the fear in their eye and greed of accumulating more.

I was thinking, man selling your house / s and move to mauri or somewhere with nicer weather.

I believe there is presently no fear for home buyers right now. The first sign of a reality check will drive these same greedy people out of the market and then the herd will start going the other direction.

Once that happens they will realize they have no savings left and then the fear of retirement will set into their smug attitute

#117 Antonio on 05.18.11 at 11:13 am

Garth. Your talk about markets caving seems a little premature- Toronto mid month stats

http://www.torontorealestateboard.com/consumer_info/market_news/news2011/pdf/nr_mid_month_0511.pdf

The first two weeks of May 2010 were not too great. The same period one year later was worse. This seems consistent with what I have been saying. — Garth

#118 bigrider on 05.18.11 at 11:18 am

Way to many Italians living in the GTA for real estate prices to tank !

Home humpers these bretheren of mine…LOL

#119 bigrider on 05.18.11 at 11:26 am

I asked a buddy of mine in the construction industry (yes, Italian they all are) what an ETF was.

He told me it was building code for some sort of electrical transfer box they place in houses in subdivisions..LOL

I kid you not…NOT !

#120 Industrial Guy on 05.18.11 at 11:27 am

17,000 new units in metro Toronto?
Can you say massive over supply?

In business, this is the point where we sack the purchasing department, beg the suppliers to hold shipments, put all the production staff on E.I. layoff benefits and tell the bankers the sky isn’t falling ( we know it is ).

The excuses keep on coming …. CREA will no doubt claim the reason there has not been a spring market this year is …. The earthquakes in Japan, the floods in Quebec and Manitoba, the Mayan Callendar and …… the Federal Election.

#121 Utopia on 05.18.11 at 11:31 am

#108 Joe on 05.18.11 at 10:05 am

“You’ve only got to try and sell something on Craigslist today to know what illiquid feels like, even if it’s just a baseball glove”
_____________________________

We are all swimming in stuff Joe. That is our problem. It is just human nature to hoard stuff in case a rainy day arrives and we need 17 pairs of shoes to see us through it all.

Anyway, stuff comes too easy for most of us and that is why we don’t want to pay too much for other peoples “used” junk. We have enough of our own already.

My contention is that should a depression ever actually arrive in Canada (like it has in the US already with real estate) that we will all have enough junk saved up to carry us through for nearly a decade.

No kidding.

I even have a term for it. It is called an “inventory depression” and it is a period marked by a significant drop in personal consumption where existing stocks are actually utilized beneficially.

But in this scenario, we don’t suffer like they did in the Great Depression of course. We just rely on all the inventory we already hold in our garages, attics and basements to carry us through the hard times.

An inventory depression does not end until we have consumed all our surplus goods or destroyed the excess thus bringing fresh consumption back to our markets.

It sounds crazy. But is it?

#122 thinktwice on 05.18.11 at 11:32 am

Garth,

You have been warning of rising interest rates for a long long time now. Pop bang right after the election you practically promised they would go up. When are they coming?

The guy in orange shorts still offers 4.99% for a 10 bagger.

As stated previously: the next BoC reviews are May 31 and July 19th. — Garth

#123 bill on 05.18.11 at 11:32 am

‘Bring the kitty back’
that cat is deceased. it is no more. and it is not pining for the fjords, it has joined the celestial caterwaul…..

http://www.youtube.com/watch?v=bETCusT5kNM

#124 bigrider on 05.18.11 at 11:41 am

Garth question for you.

If the GTA was absent of Italians, that is ,if my parents and there parents and all there friends had decided not to immigrate here in the fifties and early sixties, do you think we would have a RE bubble today?

Better yet, do you think there would be any building structures of any kind at all in the GTA ,or would we all have to live in teepees?

Teepees, lean-tos, abandoned beaver dams. — Garth

#125 bigrider on 05.18.11 at 11:43 am

#117 Antonio.

What part of Italy you from?

#126 bigrider on 05.18.11 at 11:47 am

Would all the pro real estate posters here , including realtors, on this blog, please indicate what part of Italy they have immigrated from .

Just want to take an informal survey for the record.

Thanks.

#127 BPOE on 05.18.11 at 11:48 am

Everyday more news report expose The american snake
UP 188% OH YEAH
Re/Max says the Greater Vancouver Area led the way with 747 properties sold in the luxury category in the first four months of this year.

That was up 118 per cent from 343 sold from January to April of last year.

#128 bigrider on 05.18.11 at 11:52 am

“the vast majority of condo purchasers have no intention of occupying them at all..and are intending to rent or flip”- Garth

The vast majority of those purchases have been made by people whose last name ends in a vowel and whose parents make there own tomato sauce.

I kid you not.

#129 Utopia on 05.18.11 at 11:57 am

#104 disciple on 05.18.11 at 9:49 am

Reading has become a lost art. That’s why Garth needs to start off with a photo each time to keep his logically-challenged readers interested.
———————————————————–

I miss the pictures of the semi-nudes and the pretty girls. Maybe I am just an illiterate hill-billy at heart (if not in practice). Actually, I enjoy the long winded posts too. It helps me get inside other peoples heads.

It’s a real zoo inside some of their minds.

#130 Robert Dudek on 05.18.11 at 12:01 pm

Predictions without time frames are worse than useless.

Over what period? — Garth

#131 bigrider on 05.18.11 at 12:04 pm

I’m having a great time today on this blog ,I love it and please all you Italian RE humpers here ,please do not take offence to what I post about Italians as I am very proud of my heritage but:

For all of you who have spec bought all these condos and houses with no land or ultra small lots..where the heck are you gonna plant the broken hockey sticks for the tomato plants and hang the “scala” for the grape vines to grow???

ROTFLMAO !!!

#132 vreaa on 05.18.11 at 12:16 pm

“Imagine you own a beach house in a resort area and you decide, at the end of a beautiful summer, to revive the memories of your youth by organizing a BBQ and bonfire on the beach in front of your home. You invite all your local friends, you organize the food, and you ask everybody to bring along their families, their friends, and their own booze…”

from ‘It Is Dangerous To Blame The Consequences Of A Speculative Mania On One Sector Of Our Community: Let’s Make Sure We Don’t Do That.’

http://wp.me/pcq1o-2jm

#133 bigrider on 05.18.11 at 12:42 pm

BPOE- stands for ‘Big piece of excrement”

After all , he is from hongcouver.

#134 Junius on 05.18.11 at 12:47 pm

#44 BPOE,

You have now broken your own rant record for the dumbest post ever. Your anti-American rant is just beyond. Your status as the village idiot remains intact.

#135 Hmmmm.. on 05.18.11 at 12:47 pm

It’s the 18th of May and the CREA has not yet released the mid-month numbers. Usually they post it the first business day after.
What are they waiting for? If the numbers were good they would have posted them already. Are they going to skip mid-month this time and hope things improve in the second half for a tamer release for the end of the month? or do they have another trick up their sleeve?

#136 bigrider on 05.18.11 at 12:48 pm

I for one am in a good, humourous mood this morning.

I would like to start a “mud flinging contest” between team T.O and team Vancouver. I would like all to join in

I would like to start by saying that being rained on for 340 out of 365 days a year can’t be pleasant. Hence, T.O the better spot.

Also, I do not know how to speak mandarin or cantonese, so T.O wins again.

#137 Quarmby on 05.18.11 at 12:52 pm

No chicken little here, but trying to explain what’s inevitably about to happen, to the average “entitled”, greedy, members of the “fast-food & instant gratification generation…is pointless. They’ll just have to learn that what goes up, in this case, will collapse. Most realtors and average 30 somethings, can’t spell economics, let alone understand the basic tenants of same. The only difference this time (market crash), is that it won’t recover for decades or at least until the cheap industrialized countries catch up somewhat, with our wage and living costs as we head to meet theirs. I have neither the time nor interest in explaining what is relatively simple mathematics and causal economics, but will say that most of the “revered” economists today are either lying (for the government), incompetent, or haven’t the ability to do much other than track historic trends. As for the so called ‘realestate experts”, like CREA…well, now there’s an unbiased opinion.

#138 Dark Wettler on 05.18.11 at 1:10 pm

#44 BPOE on 05.17.11 at 11:13 pm

‘America failed in Real Estate. It is a failed Country. Canada is not America. Canada represents goodwill and success for all people.’

Funniest thing I’ve read in a while. You voted Conservative, didn’t you?

Meanwhile the yanks are becoming a socialist state, and the harper government is pushing hard line right wing agendas. Travel as a Canadian lately?

#139 45north on 05.18.11 at 1:13 pm

Bigrider: The vast majority of those purchases have been made by people whose last name ends in a vowel and whose parents make there own tomato sauce.

pretty funny

my brother-in-law makes his own tomato sauce

#140 T.O. Bubble Boy on 05.18.11 at 1:14 pm

regarding the mid-month GTA numbers:

1) May 2010 was NOT a blow-out month last year. It was lower than both May 2009 and May 2007. The sales volumes had already started their dip by this time last year — keep in mind, we’re already more than 12 months into year-over-year declines (i.e. May 2010 was worse than May 2009, so May 2011 could be worse than BOTH May 2010 and May 2009).

2) All the way back to 2004, the May numbers were quite close (the worst May has been 9193 in 2004 I believe). So, even a slight decline (about- 3%) from 2010’s 9470 could make May 2011 the worst in 8+ years.

#141 JenC_T on 05.18.11 at 1:21 pm

Check this out:

Chinese Spreading Wealth Make Vancouver Homes Pricier Than NYC

http://bit.ly/mCwipE

“Sales of detached homes, townhouses and condominiums in metropolitan Vancouver jumped 70 percent in February from January, to 3,097 units from 1,819, and were up 25 percent from a year earlier, according to the Real Estate Board of Greater Vancouver. In March, sales climbed 32 percent from February, to just shy of a record for the month of 4,371 transactions set in 2004. Sales increased by 80 percent from two years ago.”

#142 Junius on 05.18.11 at 1:25 pm

#112 Victoria Tea Party,

The Chinese wave of money is going to come to an end very quickly. The pumpers want us to believe that there is an unending line of Mainland Chinese millionaires are rushing to buy Vancouver properties at whatever it costs. This is complete nonsense.

There are a number of factors driving the Chinese investments all of which point to the fact it will not last.

First of all, Mainland Chinese are in only their 12th year of being able to buy personal property. Along with the gov’t infrastructure building it has built the largest housing bubble the world has ever seen. They have only seen a Bull market so have no idea what can happen.

The other factor is that the Chinese have very few places to put their money into because they don’t yet have a sophisticated investment market for securities. That is developing quickly but property is seen as a sure bet.

The main driver for Vancouver is people desperate to get their money out of China now because they are concerned about future upheaval. Every knows their market is going to collapse and Chinese people with money in China know they could lose it. So anything they can do to get it out now they will.

The point is that this situation cannot last. Much like the run up to the Hong Kong take over was a period of buying so is this period. Their market is going to crash and once it does and whatever happens, happens the HAM will stop flowing. Either it will not get out or it will stay invested in China. But it won’t be looking for safe harbour from the storm because the storm will already have happened.

#143 disciple on 05.18.11 at 1:29 pm

Quarmby – I think you meant “basic tenets” not tenants. Or was that a RE joke? I am soon to be a tenant and don’t like renters jokes, ok?

#144 Junius on 05.18.11 at 1:29 pm

#136 bigrider,

You can start a mud-flinging contest with Vancouver but remember we love to wrestle in the stuff and it washes off easily in the rain.

We have the Canucks. You have the Leafs. Enough said.

#145 disciple on 05.18.11 at 1:35 pm

Hey Vito, er, I mean bigrider…you’re hilarious…

#146 Junius on 05.18.11 at 1:37 pm

#100 Amarillo,

Realpaul is correct to bring up these issues as they pertain to immigration. However he infuses all of his posts with so much hyperbole, name calling and arcane view points the message is lost.

#147 Nevin Van Nest on 05.18.11 at 1:43 pm

Can’t agree more Garth!! I can’t imagine going into a situation were you are rushed into buying a home.

#148 bigrider on 05.18.11 at 1:44 pm

#139- 45North.

I’m glad you found my comment funny.

What part of Italy does your brother-in-law hail from?

#149 bigrider on 05.18.11 at 1:47 pm

#145 Disciple.

Hey if we Italians weren’t building and specking on real estate we would be beating all the rest of you up and taking your shit . Right?

#150 bigrider on 05.18.11 at 1:59 pm

It took three U.S presidents and 10 f-in years to find and get Osama Bin Laden.

You send my “friends” Vito and Luigi over to Pakistan…it would of took a day to find em, hit him in the back of the head with a bat and they would have brought all those F-in ugly carpets they make over there, back to sell .

#151 Janie on 05.18.11 at 2:08 pm

I know we are at the end of the market and the bubble will burst. An acquaintance who has made a mess of his finances 2 x over (filed bankruptcy once) and has the worst track record of investing I have ever seen – said he would buy three houses now if the banks would only lend him the money because the Chinese are going to make everything double. He suggested I was stupid sitting on money that is invested in the market (and doing well!) and I should be purchasing ‘safe’ real estate or be priced out forever.
It was hard to keep a straight face, but now at least I know (for sure) the end is near.

#152 R. Willis on 05.18.11 at 2:10 pm

If real estate was a religion the authors of the comments posted to this site would be be considered similar to fundamental zealots of Islam.
I guess that’s what makes the two disciplines interesting in today’s world.
It sure is easy to motivate the masses.

#153 Carboard Box Millionaire on 05.18.11 at 2:12 pm

Condos are the biggest scam ever IMO. The only real estate worth buying is a SFH. Why would anyone in their right mind ever buy something that has no land, has high ongoing maintenace fees forever, and gives you very little control over what you can or can’t do when it comes to pets, etc. If I own, I should be able to do what I want, when I want, or I own nothing. Besides, someone can rent for half the price of owning a condo (especially here in Vancouver), with zero risk. Unless you’re a flipper and making a living off of capital gains (those days are over), buying condos is a ridiculous concept IMO. But hey, go wild. Have fun when you need to come up with thousands of dollars for cosmetic upgrades to the lobby that don’t even need to be done, or leaky condo repairs, or any other list of ongoing unexpected expenses. You might as well just light your equity on fire. Have at ‘er!

On another note, I have a business associate of mine down in Colorado. He’s only 22 (I’m in my 40’s) and he just bought his first house. 3 bedroom, 2 bath. $156K. Where he lives it costs more to rent than it does to own. Now THAT is when it makes SENSE to buy real estate. A yard for the dog, and a place to call home. Condos? No thanks.

P.S. I live in a rental apartment in downtown Vancouver. The rent is so low you probably wouldn’t even believe me. The building is a bit of a dump, but the apartment itself is quite nice inside. Easily half the price of owning in this area, so I’ll take it. With what I do for a living, it’s highly likely I’ll ever be buying any real estate in this city (even if there is a crash), but I have unfinished business to take care of here before I move on. I’ve lived in 6 cities in Canada, so I’m no stranger to packing my bags anyway. Besides, staying in one place for my whole life would be about as exciting to me as watching paint dry! :)

Enjoy your day!

#154 TheBigLebowski on 05.18.11 at 2:14 pm

There has been so much talk lately with regards margin increases in the commodities venue. The reasoning given has been speculation and bubble talk . None of these Johnny come lately experts talk about the devaluation in currencies in which these commodities are priced. The recent margin hikes in the pm market, 5 in 9 days is unheard of in 35 years. It was a concerted smash-down to protect the massive short positions held by the bullion banks, HSBC, GS, JPM, CITI.
Why is there not the same talk with regards to U.S Government bonds, or housing ? Why isn’t the average person being protected by the massive bubbles in these markets as well as the bubble forming in the Dow Jones ? Why aren’t margins being raised to cool off the stock market bubble are housing? Its because it is selective suppression. The governments want bubbles in the stock, bond and housing markets. It gives the false sense of financial security to the average person and masks currency devaluation. Commodity increases shine a light on the massive currency devaluation and loss of purchasing power taking place. The CEO of Starbucks recently blamed speculators for the rise in coffee prices which affect his prices. He is unable to comprehend that these prices are only reflecting the massive devaluation in currency being created by the governments printing money.
A rising stock market also masks the delusional idea of a “Jobless Recovery” that was being pumped by the mainstream media, the oxymoron of all time .
The truth is, the largest bubble of all is in the U.S long bond aka the world reserve currency. As it stands right now the FED is buying 80% of its own bonds because of lack of demand. The market is realizing there is no value there. What happens as inflation rises and the FED continues to suppress interest rates and becomes the only buyer of its debt , monetizing 100% of its bonds?
The rise in commodity prices has not been caused by speculators as the media would have you believe. The rise in prices has been a reflection of the largest theft from the middle class of all, the stealth theft by government through inflation.

#155 jess on 05.18.11 at 2:15 pm

‘captive and confidential ’ onshoring

Seeking Business, States Loosen Insurance Rules
By MARY WILLIAMS WALSH and LOUISE STORY
Published: May 8, 2011
new york times

#156 EX-Cowtown on 05.18.11 at 2:15 pm

One item lost in the rattle and hum:

23% of our GDP is in housing and RE development. The U.S. posted virtually identical #’s…. before the crash.

Take a chunk of that CDN 23% GDP off the table and you have the same type of mess the U.S. has.

#157 disciple on 05.18.11 at 2:21 pm

bigrider – You got that right, brother. Question is: when RE tanks, will they finally leave for the rural areas and help build the re-emerging agricultural sector? But check that, I hate cooked tomatoes, so I wouldn’t want that either…

#158 LvdB on 05.18.11 at 2:28 pm

Claims of little sub-prime lending are way off-base, at least according to members of the Canadian mortgage industry.

Apparently a lack of first-time buyers is expected to heat-up Canada’s sub-prime lending industry.

From the horse’s mouth:

“Subprime competition heats up among lenders” at http://www.canadianmortgageprofessional.com/news/subprime-competition-heats-up-among-lenders/106731

#159 Desi on 05.18.11 at 2:42 pm

I am wishing the prices would down but not sure what to make of Garth prediction in light of all following indicators:

http://guava.ca/indicators.html

#160 Dontcallmeshirley on 05.18.11 at 3:00 pm

Anyone take comfort in numbers?

According to the Bank of Canada, 2010 aggregate before tax incomes = $1 trillion.

From the same source, aggregate mortgages outstanding were also just over $1 trillion.

On the whole, as opposed to individual homeowners, this means Canada can very easily service existing mortgage debt.

So what? So the bond market, for now, has no reason to fret over Canadian debt and push rates up.

#161 The American on 05.18.11 at 3:04 pm

The CREA hasn’t posted numbers for previous month yet. They typically post much sooner than well after mid-month. I’ll venture to guess the numbers are not great at all. It is usually posted within the first week of the month. Are there NO standards within the CREA to post in a timely and consistent fashion? It should be as simple as when one receives his/her monthly bank statement for reconciliation purposes. After all, it is not very hard at all to collect and publish these numbers. It will be interesting to see the spin they try to put on this one.

#162 Rocket Boy on 05.18.11 at 3:10 pm

Just adding my 2 cents – Italians are big time house proud – growing up, if you walked on their lawn, you got a tongue lashing by the grandmother – but awesome people just the same – you’d be fed like a king – and they have the best family parties…

My neighbour – a complete ass – and italian (no disrespect to the community at large) … but this guy will go down like the captain on the Titanic – he gets stupid on me cause my grass is 3 inches tall … and he wants the rest of the neighbours to be more like him (an ass)…

This is one person that I actually await the financial collaspe and watch this proud ass take it on the chin –

Again – no disrespect to my many friends of italian decent…salute…

#163 Sail1 on 05.18.11 at 3:18 pm

#111 bigrider

We all end up there anyway, why not make the final purchase. How big is your lot? Or did you select a condo? You can always save your money with a fire sale.

#164 BPOE on 05.18.11 at 3:29 pm

Read it and weep you renters. America failed where Vancouver succeeded. God Bless Vancouver and its Home Owners. Pray for renters who’s decisions have hurt them deeply.
Sales of detached homes, townhouses and condominiums in metropolitan Vancouver jumped 70 percent in February from January, to 3,097 units from 1,819, and were up 25 percent from a year earlier, according to the Real Estate Board of Greater Vancouver. In March, sales climbed 32 percent from February, to just shy of a record for the month of 4,371 transactions set in 2004. Sales increased by 80 percent from two years ago.”

#165 Mister Obvious on 05.18.11 at 3:44 pm

On CBC Radio 690 (Vancouver) just after 7:00 AM this morning there was a piece on the insane price of residential real estate in the city. It mostly centered on the ‘reality versus myth’ of Hot Asian Money (HAM) propping up the top heavy Vancouver market.

I was ready to blow it off as more mediocre journalism but then, surprise, surprise; they offered up a few sound bites from Garth Turner. To paraphrase: Bite 1: There is no decent data or documentation available to support the theory of HAM, and… Bite 2: If there is this supposed HAM, then why does it not seem to find its way to Seattle, San Francisco, or Los Angeles?

No mention was made of the CMHC, interest rates, tightened mortgage rules or any other influences and indicators covered in this blog at great length. It was just a lot of prattling on about HAM. What was the upshot? Maybe HAM is real, but then again, maybe not. Not so useful.

#166 Sean on 05.18.11 at 3:46 pm

#44 BPOE on 05.17.11 at 11:13 pm

…. Canada represents goodwill and success for all people.

———————-

Haha… Canada represents beavers and Mounties to most people. Oh, also high taxes and polar bears… Only at the peak of delusion can Canadians actually believe the world wants us more than the US. I love Canada, but lets not embarrass ourselves now.

#167 BPOE on 05.18.11 at 3:50 pm

Folks, Vancouver is the best place to live if you hate yourself! Folks, folks, folks, folks, burp, folks!

http://vancouvercondo.info/2011/05/3rd-times-the-charm-no-new-mortgage-rules.html

http://www.tripadvisor.com/ShowUserReviews-g154943-r42969887-Vancouver_British_Columbia.html

http://www.chineseinvancouver.ca/?p=11280

http://www.tripadvisor.com/ShowUserReviews-g154943-r50197692-Vancouver_British_Columbia.html

http://hollyandholly.com/2010/03/24/i-hate-vancouver-searches-top-the-charts/

http://post.iask.ca/canadameet/topic/144721

http://vreaa.wordpress.com/2010/03/16/vancouver-is-a-second-rate-backwater-i-live-here-we-sold-our-condo-and-people-told-me-i-was-insane-we-live-in-a-2-68-million-dollar-rented-penthouse-and-the-owner-in-san-francisco-has-said-she/

http://www.facebook.com/topic.php?uid=79326510328&topic=8258

http://www.43things.com/entries/view/25849

http://www.frommers.com/articles/6121.html

http://www.myspace.com/themustardman420/blog/539338255

http://thesecretsofvancouver.com/wordpress/the-homeless-in-need/all-about-vancouver

http://www.dslreports.com/forum/r22972984-Re-Drug-Trouble-in-ParadiseBBC-portrays-Vancouver-in-unflatt

#168 disciple on 05.18.11 at 3:57 pm

Cheech Beats Cooper on Jeopardy. Proves my assertion that the talking heads are robotoid clones and nothing more. Anderson Cooper’s brother was/is head of the NYSE! Hmmm…corruption runs in the family…

http://newsbusters.org/blogs/noel-sheppard/2010/03/19/pot-smoker-cheech-marin-beats-anderson-cooper-jeopardy

#169 disciple on 05.18.11 at 4:01 pm

Shirley – 75% of people in Canada make less than 50,000 per year. Among these, I suspect that the bulk of the trillion dollar mortgages reside. So your analysis would be bunk.
Thank you for coming, bye bye…

#170 Devore on 05.18.11 at 4:11 pm

#80 Canuck Abroad

It must be because of the “convention oven”.

Jeesh, for a million bucks you’d think they would put more than a few seconds of attention into it?

#171 canali on 05.18.11 at 4:39 pm

garth: haven’t you heard: all is good and sustainable here in overinflated BC:
http://www.vancouversun.com/business/Rising+wealth+foreign+investment+drives+demand+luxury+homes+Metro/4804041/story.html

#172 squidly77 on 05.18.11 at 4:57 pm

BPOE

Additional rules are not required at the moment, however enforcing the ones that already exist as law need adhering to.

The no zero down mortgage rule for CMHC insurance is criminally ignored daily.

#173 squidly77 on 05.18.11 at 5:05 pm

I doubt very much that there are very many Vancouverites willing to fork over 6.5% (includes closing) or about $80,000 cash to purchase spec properties in your guaranteed to crash shim sham ponzi scam bubbled up wet city by the dirty sea.

#174 Kevin on 05.18.11 at 5:15 pm

Remax says that even though sales are down 14% year over year, that is OK, as luxury home sales soar in most Canadian metros.
http://www.remax-western.ca/news/demand-luxury-homes-intensifies-amid-rising-canadian-and-global-wealth

As for the first timers, no worries about being shut out, it looks like subprime mortgage business is heating up, they can always get one of those.

Subprime competition heats up among Canadian lenders
http://www.canadianmortgageprofessional.com/news/subprime-competition-heats-up-among-lenders/106731

#175 Hoof - Hearted on 05.18.11 at 5:16 pm

Canada ?

………Is a butt wart that should be dissolved..it lives on faux unity. Each , or most Provinces…. is large enough to be it’s own independent country.

The East or I should say ” middle east” of Ontario and Quebec are sunset empires and are simply Confederation bloodsuckers.

Time to move on.

BTW to buy off Garth he can be President of the Province of his choice

#176 ballingsford on 05.18.11 at 5:24 pm

Why all the talk about Italians today? Usually it’s about the Chinese. I must have missed something.

Anyway, just the other day I learned that my friend from Hongkong does not trust the people from China because all they are concerned about is money.

That statement really made me think!

#177 Alex on 05.18.11 at 5:35 pm

Oodles of detached home price reductions again this week in the two areas I follow closely – Langley and Abbotsford. Just received one in Langley that started at $540K not so long ago and now sits, rotting, at $499K. When oh when will the crazed Asians realize that with the same money they pay for a sh*thole in sh*thole East Van, they could buy four or five equivalent sh*tholes in sh*thole Langley? Who will save the Langley-ites?

#178 iwannagetitnow on 05.18.11 at 5:49 pm

Utopia #108

Good post overall, but you can’t eat old shoes, Tvs, I-phones etc..

#179 BPOE on 05.18.11 at 5:58 pm

The Olympic Village powers over the naysayers as sales soar.

VANCOUVER — The financial health of the former Olympic Village project is improving, according to a second receiver’s report released today.

The report by Ernst & Young says there is occupancy of more than 60 per cent of the residential units at the Village on False Creek.

The receiver has estimated an occupancy of 70 per cent by July 31 “given the strong sales and rental activity now underway.”

As of Monday, 124 strata units have been sold at a value of more than $84 million, with most of the sales expected to close by the end of this month, the report said.

Sales have far exceeded the receiver’s expectation, resulting in 33 additional units at the Compass building being released for sale 10 days ago, the receiver said.

#180 Nostradamus Le Mad Vlad on 05.18.11 at 6:06 pm


I was vaguely contemplating the 21-05-2011 nonsense (the beginning of the end) and 21-10-2011 (five months hence, the end of the beginning), and became thoroughly confused by the numbers 0-1-2-5 and 10.

It may be a reference to an unknown conspiracy theory; e.g., Yellowstone (Wyoming), Toba (Indonesia) and the supposed super volcano hidden below Mt. St. Helens, in the PNW.

If these three kick off at roughly the same time, it will put the ‘quake fault lines into full impulse, thereby putting a dampener on the UEFA Champions League final on 28 May, at Wembley Stadium, in London.

Nothing can be allowed to interfere with a soccer / hockey or any type of final so the naturally occurring events have been postponed to Dec. 24, 2011, the end of the Mayan Age.

That’s the best I could come up with!
*
Viva Espana! Revolution in Spain seems to have caught on. People realize they have been screwed.

#175 Hoof – Hearted — “Each , or most Provinces…. is large enough to be it’s own independent country.” See link — Update on the NAU – SPP.

Cold War Recycled History rhymes, repeats and recycles.

What if? If the US quits Af’stan, unemployment skyrockets. Hence, perpetual war. 2016 may indeed be the end of the US and Canada.

War = Debt TPTB are raking in the big bucks. “The 43-cents-of-every-dollar-is-borrowed war machine rolls on.”

Fukushima This is the downside of globalism (which never has, nor will ever work anyway), and Debt forgiveness.

Student Loan Debt Equivalent to seven per cent of US GDP. Homeless pop. grows 38% in 12 months. Fake recovery? 3:13 clip The peasants are revolting (and smelly!). Short clip Charlie Sheen runs the IMF, and America gives gold away.

Milk GM dairy stuff. Alleged victim of DSK has HIV (no comment needed), plus other stuff.

9:59 clip Ernest Scribbler works for The Toilet!

#181 Live Under Your Means on 05.18.11 at 6:15 pm

#95 45north on 05.18.11 at 9:27 am
in my backyard there is a 12 foot high cedar hedge. To trim it I put wings on my aluminium ladder and then rest the ladder directly against the hedge. I climb up the ladder and the hedge holds me up. You can get the wings at Rona ($31.99) or Home Depot.
………………….

Oh how I wish I could grow a cedar hedge where I live in the M’times. They turn brown and then die after a couple of years. At garden centres when I see people at the cash buying them, I try to warn them, but most buy them anyway. Kinda like warning all those virgin home buyers that they’re throwing their money away.

#182 S.B. on 05.18.11 at 6:24 pm

O/T but not really, for Boomers. The War Of Drugs.

“…There’s no doubt that the US has been manipulated into a nation of drug users. In just a ten-year span, from 1992 to 2002, the number of prescriptions written increased by a whopping 61 percent. And in that same period, the number of prescriptions written for opiates increased by almost 400 percent( like hydrocodone, a synthetic opiate.)

According to the latest statistics from the Kaiser Health Foundation, the average American, aged 19 to 64, now takes more than 11 prescription drugs!…”

In the article linked below, Fleetwood Mac star Stevie Nicks discusses the biggest mistake she says she ever made — giving in to her friends and going to see a psychiatrist. He put her on the drug Klonopin, and the next eight years of her life were destroyed.

According to Nicks, if she didn’t take it, her hands started to shake. She gained weight and felt as if she had a neurological disease.

As reported in the Daily Beast, Nicks said:

“Finally, in 1993, I’d had enough( of prescribed tranquilizers). I said, ‘Take me to a hospital.’ I went in for 47 days, and it made Betty Ford look like a cakewalk. My hair turned gray and my skin molted. I could hardly walk. You can detox off heroin in 12 days. Coke is just a mental detox. But tranquilizers — they are dangerous. I was terrified to leave, and I came away knowing that that would never happen to me again.”

“…There’s no doubt that the US has been manipulated into a nation of drug users. In just a ten-year span, from 1992 to 2002, the number of prescriptions written increased by a whopping 61 percent. And in that same period, the number of prescriptions written for opiates increased by almost 400 percent( like hydrocodone, a synthetic opiate.)

According to the latest statistics from the Kaiser Health Foundation, the average American, aged 19 to 64, now takes more than 11 prescription drugs!…”

In the article linked below, Fleetwood Mac star Stevie Nicks discusses the biggest mistake she says she ever made — giving in to her friends and going to see a psychiatrist. He put her on the drug Klonopin, and the next eight years of her life were destroyed.

According to Nicks, if she didn’t take it, her hands started to shake. She gained weight and felt as if she had a neurological disease.

As reported in the Daily Beast, Nicks said:

“Finally, in 1993, I’d had enough( of prescribed tranquilizers). I said, ‘Take me to a hospital.’ I went in for 47 days, and it made Betty Ford look like a cakewalk. My hair turned gray and my skin molted. I could hardly walk. You can detox off heroin in 12 days. Coke is just a mental detox. But tranquilizers — they are dangerous. I was terrified to leave, and I came away knowing that that would never happen to me again.”

#183 45north on 05.18.11 at 6:49 pm

bigrider: What part of Italy does your brother-in-law hail from?

I think its central.

So we’re sitting around the dinner table, the grandmother’s there so the whole conversation is in Italian. I point to a dish and say “please pass the zamboni”.

#184 sigh on 05.18.11 at 7:29 pm

A friend of mine was probably in that mid-town lineup Garth refers to, if he’s talking about a low-rise condo in West Toronto/Mississauga somewhere.

Not a flipper, and not Chinese, nor were the people in the line the person made friends with during the wait. Just another naive ‘first time home buyer’ who lived at home with parents for way too long and whose news consumption doesn’t extend past celebrity gossip.

People used to move out from their parents’ home in their late teens or early twenties, would rent with room-mates for a few years, which would expose them to a lot of life experience people now seem to lack. Even though I lived with a lot of dumbasses, they didn’t live in a little bubble world that a lot of these real estate noobs seem to inhabit.

I fell sorry for the person, who is very nice and hardworking but hasn’t a clue what’s coming up in the economy and is just a little too young to remember the previous bubble when it burst.

#185 YYC Gal on 05.18.11 at 7:35 pm

I preach on this topic daily. Even my husband thinks I’m a becoming a lunatic. We’re early 30’s, live in Calgary and both work in an industry that is not energy. Competing in bidding wars with oil patch yahoos for a certain lifetime of debt really turns me off. I’m patiently waiting for the day that common sense will prevail and my own rants will not be conversation killers.

#186 T.O. Bubble Boy on 05.18.11 at 7:38 pm

Nice Try BPOE… here’s the rest of the article that you conveniently forgot to copy:

In March, when sales of condos were relaunched, Rennie Marketing Systems, the receiver’s sales agent, sold 118 of 737 remaining units, nearly double its original sales estimate.

Is selling 16% of the units really what you’d call “soaring sales”?

http://www.vancouversun.com/business/Sales+former+Vancouver+Olympic+Village+exceed+original+estimates+report/4805403/story.html

#187 Roial1 on 05.18.11 at 7:42 pm

124 bigrider on 05.18.11 at 11:41 am

If the GTA was absent of Italians, that is ,if my parents and there parents and all there friends had decided not to immigrate here in the fifties and early sixties, do you think we would have a RE bubble today?

Better yet, do you think there would be any building structures of any kind at all in the GTA ,or would we all have to live in teepees?

What memories you arouse in me.
I grew up in the far west end ( Etobicoke) in the late 50’s and well remember the “O solo me o” chorus up and down the street as the bricks went down. LOL

#188 Basil Fawlty on 05.18.11 at 8:27 pm

The crazy Vancouver real estate market has now moved out to Burnaby, where a 60 year old house was listed for $989,000 and sold for $1.5M. The realtor indicated that 95% of the potential purchasers for homes over $1.5M are from Mainland China. A friend from China was saying that people with money from China like Vancouver and see it as a good safe place to invest their cash, which is not always earned honestly.

I’ll bet you got that from GlobalTV, which got it from the realtor. And now you are telling us. See how capitalism works? — Garth

#189 Dark Sad Monster Bunny on 05.18.11 at 8:45 pm

97 T – Nice work! Did similar strategy myself. Feels good.

114 Disciple – what is the point?

181 – LUYM – Cedar or cypress? Does Leyland cypress grow there? They could suffer from snow damage when small but they grow quickly. Not good in warmer climates.

#190 S.B. on 05.18.11 at 8:46 pm

Quoting Bob Dylan’s lyrics: They’ll stone you when you’re young and able.

Locked-out players line up for cash loansSpecial to FOX Sports The Daily 40Updated May 17, 2011 1:38 PM ET
By Chris Corbellini and Jason Schwartz

As the NFL work stoppage continues with no end in sight, some cash-strapped players are taking out high-risk, high-interest loans to get them through the lean times — some as big as $250,000 with interest rates as high as 30 percent.

Players make their entire salary during the regular season, and many rely on offseason workout bonuses to get them through the spring and summer. With opening day — and their next payday — uncertain, some are turning to lenders like AGR Sports Funding, a Virginia-based firm that specializes in lending to professional athletes.

Jason Yorker, owner of AGR, likes to think of himself as a lifeline for NFL players. When cash gets tight, they can turn to him to borrow, as he puts it, “a couple extra hundred thousand dollars here and there.”

To explain the 30 percent interest rate he charges, Yorker said that, unlike other lenders, he doesn’t care much about his clients’s credit scores or whether they have any assets to back up the loan. If he thinks a player’s good for it, he can get them the cash in just a couple of weeks. Since the beginning of the lockout March 12, Yorker said, business has been booming

#191 Foo fighter on 05.18.11 at 8:49 pm

Been reading this blog lately… Presently using the computer of brampton real estate agent of Indian descent, waiting at her apartment for her to come back from a showing… at this hour, in this weather… She said Brampton is ground zero with a lot of recent immigrants declaring bankruptcy and fleeing the country, and it’s about to turn into a buyers market within 2 months max… especially with the interest rates changing.

Oh well, I guess I’m the only deal she will be sealing tonight lol.

#192 Hoof - Hearted on 05.18.11 at 8:54 pm

From “Anonymous ” at VCI blog

April MOI (Months of Inventory) calculations from BC’s 12 sales regions. Sales and listings data courtesy of BCREA’s website. MOI calculations courtesy of Moi. Note the % change from the previous month.

BC Northern
Inventory: 2696
Sales: 318
MOI: 8.5 (+16%)

Chilliwack
Inventory: 1757
Sales: 187
MOI: 9.4 (+10%)

Fraser Valley
Inventory: 8064
Sales: 1414
MOI: 5.7 (+28%)

Greater Vancouver
Inventory: 15239
Sales: 3270
MOI: 4.7 (+36%)

Kamloops
Inventory: 2083
Sales: 157
MOI: 13.3 (+33%)

Kootenay
Inventory: 2864
Sales: 155
MOI: 18.5 (-4%)

Okanagan Mainline
Inventory: 6318
Sales: 395
MOI: 16.0 (+26%)

Powell River
Inventory: 235
Sales: 26
MOI: 9.0 (+10%)

South Okanagan
Inventory: 1981
Sales: 114
MOI: 17.4 (-7%)

Northern Lights
Inventory: 277
Sales: 26
MOI: 10.7 (+123%)

Vancouver Island
Inventory: 6206
Sales: 585
MOI: 10.6 (+17%)

Victoria
Inventory: 3709
Sales: 540
MOI: 6.9 (+27%)

Provincial Totals
Inventory: 51268 (+7%)
Sales: 7187 (-16%)
MOI: 7.1 (+29%)

April was, of course, the first full month of sales activity post March 18, and as expected, sales are down and inventory is up, for a whopping 29% increase in MOI province-wide. Vancouver once again leads the province in delusion quotient (DQ) with a still-low MOI at 4.7, but it also sported the second highest monthly increase at +36%.

#193 Devore on 05.18.11 at 9:00 pm

#188 Basil Fawlty

I’ll bet you got that from GlobalTV, which got it from the realtor. And now you are telling us. See how capitalism works? — Garth

Fools and their money are soon parted?

#194 Hoof - Hearted on 05.18.11 at 9:01 pm

#179 BPOE

Olympic Village is a clusterf*ck….anyone that buys is certifiably insane.
Any stats must be massaged….

It will tied up in lawsuits for decades….

Vancouver is already guaranteed a loss, they will get ZERO for the land they could have been $ hundreds of Millions ahead on if they had sold it.

The Olympics cost them this mega profit…. with the dumb idea they, the COV, had to retain title…

#195 Goodfellas union on 05.18.11 at 9:05 pm

#149 bigrider on 05.18.11 at 1:47 pm

#145 Disciple.

Hey if we Italians weren’t building and specking on real estate we would be beating all the rest of you up and taking your shit . Right?

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

Ya Guido sissies…

Your gold chains would weigh ya down, and your Corinthian leather shoes would slip on the grease that drips from your hair.

Your guts are only exceeded by guys named George and Aristotle

#196 jas on 05.18.11 at 9:26 pm

#121 Utopia
what you have said about consumption is not crazy at all.
In fact we do need an inventory depression.

we, as consumers, need to ignore the nonstop mad marketing by corporations who are pushing consumption down our throat.
Let us all consume responsibly.

#197 Basil Fawlty on 05.18.11 at 9:31 pm

“I’ll bet you got that from GlobalTV, which got it from the realtor. And now you are telling us. See how capitalism works? — Garth”
Close enough, it was in one of the two Chinese language newspapers in the city and the article was quoting the realtor. A Chinese friend pointed it out to me and there are other similar irrational sales.

#198 disciple on 05.19.11 at 10:25 am

Monster Bunny – If you miss it, you miss it, but the point is that the bank does not suffer a loss; that is, it does not use any of its funds at all. It doesn’t matter if the loan amount is CMHC-insured or not, the whole exercise is a scam and a fraud, and therefore, RE debt will come crashing down eventually no matter what else happens. I, for one, will never again take out a mortgage (mort=death, gage=pledge). Aptly named. In Quebec they dare not even call it by the English translation because then it would be revealed for what it really is. People are stupid, but that’s okay, if they can then elevate themselves to a plane of higher knowledge, all will be well…

#199 The Drone on 05.19.11 at 5:10 pm

The main question which I cannot find an answer to is why is inventory so low?

I’ve been househunting in the Toronto area for a SFH since the fall when I sold my home. I’ve been at the losing end of four bidding wars and will be parking my money and renting until the insanity is over.