Vanity

It’s hard to love a city where politicians indebted citizens to finance private condos, you have to pay for gas before you pump it, a tired downtown hotel room is $600 a night, thousands of hookers and addicts rule entire sidewalks and there’s no highway to the damn airport. Oh, and did I mention that salaries are lower than in, say, Toronto, while houses cost twice as much?

But Vancouver actually matters because it’ll be ground zero for the housing correction. Besides, any place this myopic, self-possessed and egocentric, populated with navel-gazing delusionals happy to hand over 70% of their incomes for a place to live, is just fun to watch. Kinda like an old growth ant farm.

Last month, for example, the typical Van property sold for $630,291, while detached houses averaged $1.2 million. Of course, on the west side – which you have to crawl past to get to YVR and escape – that won’t buy an empty lot full of Starbucks cups and used Probiotics containers. However, this will not last – logic completely lost on the feckless natives.

How messed up has all this house porn made people in a neighbourhood where the average house prices increased $147,000 in one month (yeah, one month)?

Judge for yourself. Check this dude out:

We beg you to help us in this struggle against the RE Market. I regret that I am unable to convey my request to you in person, but my house has fallen under attack on the west side of Vancouver, and I’m afraid my mission has failed. I have placed information vital to the survival of the Rebellion into the memory systems of this Email. Only you will know how to retrieve it. This is our most desperate hour. Help me, Obi-Wan Garth. You’re my only hope.

I am locked in a steely stare-down with Lord Market. Having purchased our house 5 years ago for south of 700K it is now appraised at 1.7M with recent (under 2 months) sales within in 2 blocks going at 2.4M for a lot, 3.6M for a nice spec and now there are two shoddy rush job specs listed at 3.7M and 3.8M. Is seems someone has been moving commas and decimals around like they are drunk. I am frozen with the knowledge that should the market tick up just a little bit more I could be staring at 2M in cash in the bank, I have been gobsmacked into inaction.

I seem to know what I should do.. but… but… We can’t move far as we want to keep the kids in the same catchment.. I have seen some nice rentals in the area so I don’t think that should be an issue.. but I have been told time and time again that a house is your worth. Math seems to say otherwise…

Help me, Obi-Wan Garth. You’re my only hope. — Stunned in Vancouver.

I’ll say. What a dilemma. Make a profit of $2,000,000 (tax-free) in sixty months, or listen to the wacko neighbours who think fifty feet of dirt in a regional Canadian city with a gland problem is worth more than most men earn with a lifetime of toil. The fact that you’re even asking the question is disturbing. That your kids’ little friends are preventing you from moving out of the very vortex of social insanity is also over the top.

As for the implicit argument net worth is safe in a Vancouver neighbourhood, no matter how house horny its citizens, it fails. I mean, Stunned buddy, ask yourself if you could afford to buy your own home. Or would you? So why would anyone else? How much of a sustained market is there for homes in a city where the normal SFH costs 12 times the annual household income?

Asians? Dream on. Even a study done recently by a local real estate developer found the vast majority of ‘Asian’ condo buyers, for example,  are local residents of Chinese heritage. They live in the same economy as everybody else, financing their buns off with high-ratio mortgages and hoping like hell valuations keep rising, to paper over their excessive risk.

But this will not happen. The reasons have been well documented on this morose blog. Debt. Rates. Boomernomics. Jobs. Markets. Mothers-in-law. Worse, repeated experience tells us those places where everyone believes things are different and prices have no ceiling, crash and burn the brightest. Miami was bullet-proof. Everybody wanted a hunk of Vegas, or Phoenix. Seattle was immune. It was different in Boston and Chicago, or Atlanta. Today there are declines of between 20% and 80% in those cities, almost all of them with a bigger economy than that of Vancouver.

Stunned baby, give your head a shake. If there are still greater fools in Van willing to stuff two or three million dollars into your Denver Hayes for something that was seven large five years ago, you’d be nuts not to take it. After all, what possible reason is there be not to sell? That the house will rise further? That’s a bad bet, not to mention pure speculative greed. That you’ll lose social status? Quite the opposite. You’ll be a prescient god. That your family will object? Buy them a couple of Porsches. That you’ll buck peer pressure and be a west side outcast? Is that what this is all about?

Obi-wan is most disappointed, Stunned. Not good.

You’d better warn the other life forms.

177 comments ↓

#1 BBQ on 07.05.11 at 8:57 pm

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=10856475&PidKey=384557047
This house in a so-so area, not close to anything but did have a nice, big lot sold for $771,000-a whopping $92,000 over asking.
As a soon to close, soon to rent my own house back seller I find this quite unsettling-in fact almost frightening. I see the writing on the wall but but it seems to make no difference to what is ahppening in Vancouver. Are we going to be priced out? This is beyond silly but I HAVE to live in Vancouver or what used to be an affordable, family suburb of it. FYI-this house is about an hour from downtown Vancouver, no where near the shops, services etc. What do I do?????
e-I had just posted this on the “Bonds” post as it knocked me off my feet and then I see Garth has an even better example:

#2 T.O. Bubble Boy on 07.05.11 at 9:00 pm

$2M tax-free in 5 years for doing absolutely nothing?

Get out now.

#3 DavidL on 07.05.11 at 9:03 pm

Stunned… sell your house ASAP and invest the proceeds wisely. If you really want to own a house, I suspect that within 5 years the same house will cost 40% less. Think of it as a $800K bonus for having the foresight to sell at the right time.

#4 Medic on 07.05.11 at 9:04 pm

The guy probably still buys lottery tickets, hoping to win a million or two.

#5 The Original Dave on 07.05.11 at 9:16 pm

goodnesss, how do dumb people like that get that large of a blessing? $2,000,000 invested is: $150,000 a year in income…..for sitting on your behind. That’s not including whether he and his wife decide to continue to work after selling and investing. Wow.

This guy is going to give that all away. I can tell by what he wrote. He’s too afraid to cash in. Fear of change.

#6 garrulous squirrel on 07.05.11 at 9:18 pm

“A recent ‘study’ done by a local real estate developer”…..of course it must be true!!. The ‘fact ‘ that buyers are ‘local’ of Chinese heritage……..Bwahahahahahahahahahahahah !!!! Flinging that doo doo again G-Man…..oh….say it ain’t so.

G-Man…. it seems that the local developers and real whores are very much afraid that the fact that foriegn nationals buying local residential properties will create a back lash and ‘scare the straights’ into doing something stupid….like recogniing the issue for what it is and for what it has been formally acknowledged as……a tsunami of crooks from China coming to Canada to launder money stolen in China.

Even the Chinese government has admitted this …publicly. ‘ Canada is several years behind Aussie in recognizing the problem engendered by lax local legislation. Apparently the Australian market hasn’t collapsed with the new legislation against foriegn national speculation. So why are the ‘local developers’ so concerned?

Could it be that the ‘local developers’ are in fact owned and operated by Chinese money on behalf of Chinese nationals?????

And now the ‘local development community’ wants to spin this crap??????? If these ‘local buyers’ are from Chinese backgrounds but have been long term residents in the community……why don’t a majority of them speak English and only Mandarin?

Our first wave of Chinese immigration came in 1986 from Hong Kong when the Red Army was speculated to march down Nathan Road. The second wave soon after came from Tiawan when the Red Army was said to be planning to domino the island from the new base in HK.

The new mob has only been allowed out of China for five years and they’ve burst out like fireworks. But G-Man……they are not Canadian…they are not immigrants and they are squirreling cash out of the banks and ministries as fast as they can shovel.

This new ‘study’ contradicts the many articles that have been posted by responsible sources……..the idea that a ‘ local developer’ has an opinion worth listening to makes us all look pretty stupid if we were to take it at all seriously.

A survey not a study. I am happy to review your empirical data. — Garth

#7 Cato on 07.05.11 at 9:30 pm

Guess what else lotusland has to look forward to? At some point California is going to legalize pot production and when that happens the $2B+ underground drug economy in Vancouver will collapse overnight. BC trades much of its pot for cocaine, if the americans no longer want BC bud the cocaine dries up as well. Without cocaine we have nothing to trade the eastern europeans for heroin and the entire drug economy unwinds. Take a guess how bad turf wars will be when entire trade is thrown into disarray. And the gangs own houses in all the best neighbourhoods.

Stunned in Vancouver – you won the lottery, now go cash your ticket. By the way, everyone in BC should be waking up to the fact just how bad the provincial finances are becoming. Y’all really think the BC gov’t is going to continue to allow its citizens to harvest monster gains tax free? If the BC liberals don’t bring in a luxury property tax the NDP certainly will, its just a matter of time.

#8 Sumadartson jr. on 07.05.11 at 9:31 pm

3rd! Third! 3rd!

You tell’em Garth.

Canada is one of the most dangerous countries on the planet today.

West of Granville is. — Garth

#9 Prof ANON on 07.05.11 at 9:33 pm

IT’S TWO MILLION F***IN DOLLARS MAN!!! Sure, you might (but probably won’t) make a little more by playing chicken with the market, but you will be tempted to commit suicide if you F this up.

#10 Mean Gene on 07.05.11 at 9:33 pm

Greed and stupidity go hand in hand.

#11 Overpriced on 07.05.11 at 9:34 pm

You can thank our Canadian monetary policy, which punishes savers and rewards debt, for this idiocy. And they appear to be sitting back and letting it happen.

#12 Ben Rabidoux on 07.05.11 at 9:41 pm

Good Lord, listen to the man! Garth knows what he’s saying!

Look at the fundamentals in Vancouver:
http://theeconomicanalyst.com/content/rough-day-vancouver-boston-bruins-mark-carney-and-td-all-rain-parade

Renting has never looked better…
http://www.theeconomicanalyst.com/content/cold-indisputable-reality-arithmetic-case-renting

Take your money and run. Rent some nice digs. Don’t argue with a jedi master!

#13 Mr. Lee on 07.05.11 at 9:46 pm

Old Turkish story:

A farmer goes out for the daily chores. He tells his wife that we will take out a pound of ground beef for supper that night. He also tells her to make sure that the cat does not eat the meat.

As lunch approaches the wifes figures that she can make some burgers out of the meat and blame the cat for eating the meat. She executes her plan.

That evening the farmer returns from his daily toil and asks the wife where the meat is. She swiftly responds that the darn cat ate it.

Confused the farmer gets scale to weigh the cat, knowing full the well that the cat weighs ten pounds the scale reveals that the cat still weighs ten pounds.

The farmer looks at the wife and as her,” if this cat, where is the meat. And if this is the meat, where is the cat.”

Such is our borrowing addiction today………

#14 Min in Mission on 07.05.11 at 9:46 pm

Take the money and run!

Makes me wonder why he even needs to think about it.

Where I am the prices seem to be flat, perhaps down a bit, but, mostly holding. Although, it seems to me that, the sales are definitely slower. Houses that are priced to sell go fairly quickly. People holding onto their “dream” price, are also holding onto their house.

Makes me wonder how many are “underwater”, or, have to write that cheque when the deal closes?

#15 wes_coast on 07.05.11 at 9:48 pm

I wish I had that guy’s problem. I’d sell and move to (add city name here) cause it wouldn’t matter where I lived at that point. I’d be living large. SELL Stunned, before your name changes to stupid.

#16 45north on 07.05.11 at 10:01 pm

Prof Anon: talking to “Stunned” you will be tempted to commit suicide if you F this up.

This ain’t no game.

#17 yogi on 07.05.11 at 10:04 pm

Dumb are you, selling you should do…
there is no try
only sell or not sell.

#18 me ucatzo on 07.05.11 at 10:06 pm

House prices in Vancouver always go up

#19 HouseBuster on 07.05.11 at 10:09 pm

“…, any place this myopic, self-possessed and egocentric, populated with navel-gazing delusionals …”

This is why they didn’t win the Stanley Cup.

#20 An Cat Dubh on 07.05.11 at 10:15 pm

Sell your house ASAP. It may go up a bit still, but sell. You don’t want to snatch defeat from the jaws of victory, by waiting much longer. About your kids, rent in the same area, or move to a place you always wanted to live. Hopefully you find work first. Kids adjust quite easily wherever they move to.

#21 John Reid on 07.05.11 at 10:15 pm

There is no logic to Vancouver housing other than that found in market manipulation and total disregard for government’s obligation to protect members of our society. Party Politics aside, clearly, price caps must be used. There is also no logic in paying for a Ministry of Industry when it has not brought even one industry to Canada in recent history but it has sat and watched many industries leave: mold making, tool and die, plastics to name just a few. Ah, this dumps light on the political buddy system. Promotions and revenue for nothing. Now that we are news-ed up on G20 spending, we have forgotten about the Ad Scam, eHEALTH, selling Candu to China, poison products from China, selling Canadian nickle to Nazi Germany, and more, much more.

#22 Hoof - Hearted on 07.05.11 at 10:21 pm

#13 Mr. Lee

Old Turkish story:
==========

Is that a photo of the Turkish wife at the top?…quite the hairy back>

#23 pen pal on 07.05.11 at 10:22 pm

Don’t sell!

Why the hell would anyone sell who is obviously smarter or luckier than about 99.9% of Canada’s population.

Why the hell would you seek the opinion of a blogger when you have obviously made all the right moves in the past 5 years.

Do what is right for you and ignore all the free advice from others UNLESS YOU ARE PAYING FOR THAT ADVICE.

#24 Tom from Mississauga on 07.05.11 at 10:24 pm

That is some pretty staggering math there. 2 mil for a patch of dirt and a pile of bricks and there is a question about what to do. That is pretty close minded. Time to find YVR and get the next stellar flight out of there. Go travel the world.

#25 bill on 07.05.11 at 10:24 pm

sell that puppy …..

#26 pen pal on 07.05.11 at 10:26 pm

This ridiculous of a situation could not occur in anything but a bubble market dynamic. To say otherwise is simply fantasy.

#27 Pr on 07.05.11 at 10:35 pm

I’ll say. What a dilemma. Make a profit of $2,000,000 (tax-free) in sixty months… I live in the province of Quebec and I was not a separatist before, but now, with this kind of behavior from the federal government, i am sure to be one strong French separatist to leave Canada alone in this madness. So long my Canadian friends.

#28 Lisa on 07.05.11 at 10:35 pm

Take the money, dude, TAKE IT! This window of opportunity is about to slam shut!

#29 Utopia on 07.05.11 at 10:38 pm

UN FREAKING BELIEVABLE.

Yeah, all caps. I am shouting. Who in their right mind even has time to write an e-mail for advice when the biggest lotto this sorry country ever handed out is about to expire.

Yeah, that’s right. Expire.

You have officially gone parabolic in Vancouver, friend. And in just weeks it will all be over and you will be trapped for good with a home that will very likely end up falling below what you originally paid.

Once that decline starts falling there will not be buyers anymore, nada, none. Just sad sales signs swinging in the breeze and getting rusty.

The Realtors will be lined up three deep at the EI office and you will wonder what the hell you were thinking by delaying. Kicking yourself more likely. But so what? Working until 70 is good for you I hear. Keeps those synapses active.

Funny how people behave when they are within grasp of one of the single biggest financial opportunities of an entire lifetime and yet can still not see it.

Forest and Trees I suppose. But it will be a great story for the kids one day…”you know, we were almost multi-millionaires once, but daddy blew it all by waiting for an e-mail reply from Garth”

#30 Saeid on 07.05.11 at 10:43 pm

Thank for another good article. I often find the comments quite educational too, this site has indeed been a great resource.

I had a question for Garth and other commentators. Given various sources of evidence (e.g. http://www2.macleans.ca/2011/03/23/a-mortgage-monster/ and numerous others) I have become persuaded that we are indeed in a precarious housing bubble, perhaps worse than the States in 07.

I’m a graduate student and have a small income excess I make from TAing that I wouldn’t mind using to speculate on the market and learn in the process (even if I loose it all). I am wondering how one could go about profiting from a potential real-estate crash.

I have been investigating buying puts (with as far off expiry dates as possible) on some REITS that have option chains, for example Rio Can (REI.UN). Since they are not very volatile the options are relatively cheap, and in the 07 crash the stock did drop massively.

Unfortunately I’m finding it extremely difficult to find stocks exposed to the real-estate market with option chains that are in Canadian Dollars. Any ideas where I could find a list of such companies to research them further? Or more importantly, do you think this approach has any merit?

Thank you,
Saeid

#31 Tim on 07.05.11 at 10:45 pm

“But Vancouver actually matters because it’ll be ground zero for the housing correction. Besides, any place this myopic, self-possessed and egocentric, populated with navel-gazing delusionals ”

We like it here, don’t be bitter just because you live in Toronto

#32 Slow Learner on 07.05.11 at 10:46 pm

Wow, a slap directly at the Vancouver housing market and BPOE hasn’t posted one of his -or her- Joseph Goebbels-esque tirades yet. This must really be the end of days for the Vancouver housing market!

#33 Ravishing rick on 07.05.11 at 10:48 pm

This is what you do, sell your house, find a nice rental in the area.

In addition, take 40% of the sale revenue and go to the casino… Bet on red 14, all of it!

now if you think that last part was a brilliant… Then just hold on to your house, should be the same result in the end.

#34 Tim on 07.05.11 at 10:49 pm

“Guess what else lotusland has to look forward to? At some point California is going to legalize pot production and when that happens the $2B+ underground drug economy in Vancouver will collapse overnight. BC trades much of its pot for cocaine, if the americans no longer want BC bud the cocaine dries up as well. Without cocaine we have nothing to trade the eastern europeans for heroin and the entire drug economy unwinds. Take a guess how bad turf wars will be when entire trade is thrown into disarray. And the gangs own houses in all the best neighbourhoods.”

We were hoping for that, but California was too stupid to do so, they missed their chance…

#35 Carp on 07.05.11 at 10:50 pm

Sell … move to a nice town with good schools and saner RE … like Ottawa.

#36 Bottoms_Up on 07.05.11 at 10:52 pm

Garth, I’m surprised you waste your breath on people like that.

The lottery is staring them in the face. All they need to do is buy the ticket.

Buy the ticket.

Sell the house yesterday.

Move to Ottawa, live in a house like this (next to the Prime Minister) and still have money left over to invest and live off of:

http://www.realtor.ca/propertyDetails.aspx?propertyId=10296365&PidKey=-794877413

#37 squidly77 on 07.05.11 at 10:52 pm

Wheres Don Campbell ?

#38 Tim on 07.05.11 at 10:52 pm

“It’s hard to love a city where politicians indebted citizens to finance private condos,”
You forgot to mentioned how politicians and developers ruined the city, especially the skyline by building so many souless grey skyscrapers downtown, which has blocked the view of the mountains. People stupid enough to buy there continually complain about the noise, no surprise as the buildings are so close together. Thanks to Gordo, Campbell, the weasel and Sam Sullivan for selling us out under the guise of “densification”

#39 dan on 07.05.11 at 11:00 pm

Do Canadians have a high pain threshold? When the US affordability index reached a certain number it all fell apart. And that market allows its people to write off mortgage interest. Contrast that to Canada where our numbers are even higher and I’m in disbelief.

What is it about us Canadians that can bend over and take the fist to the elbow and still keep going? How much longer can this economy run on fumes?

#40 Dan in Victoria on 07.05.11 at 11:03 pm

Must be a Rakghoul from Taris, not to be confused with Coruscant.

#41 Al on 07.05.11 at 11:05 pm

Predicting when a bubble will burst is tough job, almost impossible. There are many examples proving it, starting with the Dutch tulip mania.
Unfortunately, many of those reading this blog, as well the author, risk of sounding like the boy who cried wolf too many times.
The market is certainly overpriced and, for sure and without a doubt, it’s better to rent. However, this doesn’t mean the collapse is just around the corner. We should never underestimate who much or for how long people will stubbornly ignore reality.
So, going back to the person who asked if he should sell his house. His property might go to 5 mil or the price can collapse to 1 mil in the next 6 months. He should not try to time the market or given the impression that other can do it for him.
Also, there is no rule that people should not make dumb decisions. Maybe the fact he doesn’t want to pocket 2 mil, because of his kids play pals, it’s a clue the Darwinian natural selection process encountered some glitches in the BC area. Maybe, those 2 mil should not make it into his pockets.

#42 iEngineer on 07.05.11 at 11:07 pm

Meanwhile, Chinese believe they found a parallel dimension to more real estate:
http://www.youtube.com/watch?v=NsEdOSYf9x8&feature=related

#43 Harlee on 07.05.11 at 11:07 pm

I could comment on the housing situation in Vancouver (I have relatives who own homes there) but I’m sure the others that post here can do a better job of it than I can.
To #128 Bill Gable from yesterday: When I was in grade 10 (early 1970s) I took an economics class that covered money,GDP,investing,etc. I think some of it stuck but until recently I never had enough money to really put what I learnt into practise.
But get this: Back in the early sixties in grade 1 my teacher ( a lovely lady who’s still alive at age 93) put us students through an exercise in which we had to imagine ourselves as future adults. We were each
assigned a wage and then had to decide whether we’d buy a house or rent. Then we had to decide what expenses would be involved with our decision and enter that into our “balance sheet”. The teacher put togeather a “grocery store” (made up of empty product
packages,jars &boxes)in the back of the classroom and each of us had to learn to shop for food and determine how long,say a box of cornflakes at 20 cents,would last until having to buy another one.
Finally I figured I had everything covered. I was quite proud as my teacher looked at my balance sheet…”That’s fine Harlee…..BUT what about money for some fun?” Then I had to go back to my list and figure out much I’d spend on movies or chocolate bars each month…
My teacher really made sure that her little grade 1 students covered everything when it came to making and spending money .We did this “money management” exercise each day for some time.
I wonder if the students in the lower grades get that sort of training from their teachers now-a-days ?

#44 td6969er on 07.05.11 at 11:09 pm

Wrong. Everyone. Only locals are allowed to comment. This is not Windsor or Stettler. Once they(mainland China HAM people) buy us out they will force us to work for nothing. For them. This is not as the survey says”?”. You actually beleive people that admit to Billions just in official Govt fraud would fill out a survey HONESTLY. No wonder thye will own us. No, they just print more money as the US Fed. Then no one knows who has what. And 30% above asking-so. Money for nothing. The survey indicates folks responded to being ‘local’ citizens because they have a)a bank account b)address from their relatives on a hydro bill. OK survey says-what dummy would believe a survey? Vcr is the new San Fran of the 21st century. DO NOT SELL. I bought a 44 x120ft on Wiltshire in ’04 for $710k. Every year since realtors have been telling me they have buyers-cash-and to sell now. Sell now now rich smart local hot european boy. Well it’s worth $2mill today. Future value for me today is $2.5mill. They laugh. Except for one that called this am offering $2.1. Just like they did when last year they offered $1.6 and I countered $2mill. They said never $2mill rich boy. Now they say whenever you want to sell. And remember realtors are lazy and did not pass basic home ec. I repeat never have a realtor represnt your RE interests. You’re better off letting your kids fool around with it. Seriously – would you trust someone to sell a $2mill place with a $600 correspondence Rocko school of hairdressing and RE barbershop certificate? I know-they have their special marketing blah blah and that little mls thing that anyone privately can access nowadays for $550 and save the $50k commiss. Sell only if you hate what the hood is becoming for your family. As Peter Ladner does. And I do. Ending? Bubble—It will end when 1.????how many trillion mc ham don’t want it anymore. Get the pic? Can you live off the $100k net tax free your place is going up by on a yearly average?They-the MC HAM-do not buy Langley. Heck even us locals hate it when that happens. You drive 3.5hrs for a 70km work round trip. We live here. Folks it’s a different dynamic and demographic in Vcr. Sounds arrogant but the truth always is. No more boom/busts. Once again not Vcr Isld or Poco. Vcr proper-Westside, east end, Richmond and West Van. Mortgage payments and rates. Please. You argue over your 1/4 mtg rate discount while your 4% down pmt is eaten by cmhc. And a mtg broker that is 19 and works nights at Brandis. While one MC HAM buys 6 lots in Kerrisdale for $2mill each CASH and doesn’t blink. It’s horrific. No where in the world but Canada. Not Australia. Not the US. Your un laundered money is more than welcome. But watch out if a citizen misses $40 in income-right down your throat old govt will be. Thanks Canada.
Only sell if you are done. Otherwise you will be done in Vcr forever. The March ’09 blip dip was once in a lifetime.
once my friend. Just like your house in Vcr if you sell. You bought it once and will sell it only once. Never either twice. Unless you find a duffle bag full of money in a taxi cab.
good luck. And fortunately you can’t really go wrong. Make your $2mill+ and rent it primo Coal Harbour for $4k a month in a $1.5mill pad. That’s 40 years of money for nothing renting. Enjoy.

#45 Increasing that 1% on 07.05.11 at 11:11 pm

At least wait until there’s actually signs in your area of people maybe getting a bit below their asking price, but selling in a reasonable amount of time, as would happen in a normal market.
What would you sell for now, if you’re planning on staying in the area, places are selling with no problem, and prices are still going up?

#46 eddy on 07.05.11 at 11:14 pm

Published in 1952 by Kasper and Horton, New York, the original book on the Federal Reserve (published under the title Mullins on the Federal Reserve) was the first nationally-circulated revelation of the secret meetings of the international bankers at Jekyll Island, Georgia, 1907-1910, at which place the draft of the Federal Reserve Act of 1913 was written.

This collection includes all the known available MP3 interviews with Eustace Mullins. All files have been ID-Tag cleaned, renamed and corrected. Commercial-Free.

http://www.archive.org/details/EustaceMullins-Mp3Archives1923-2010

#47 Nick on 07.05.11 at 11:15 pm

I was in Van recently and made a detour to show my girlfriend the ugly biker bunker bungalow that was featured here a few days ago, selling for 2.5M. At first she didn’t want to go, but when the GPS told us we had reached our destination her jaw dropped to the floor. A successful friend of ours is buying and renovating a mansion off Sunset blvd in the Hollywood Hills for less than the price of this sad bungalow, sitting in a pretentious neighborhood where the closest restaurant is a McDonalds on Granville St.

#48 BC Bring Cash on 07.05.11 at 11:17 pm

Fed officials in the US led by Greenspan saw housing the bubble in the US in 2005. The Private Banking Cartel known as the US Federal Reserve decided to do nothing.
Just let it happen. No corrective action to prevent an untold misery upon millions of families. The result of inaction was in other words a manufactured event to enrich the Elite at the expense of the average individual which lead to the financial crisis of 2008.
Chances are we have a similar financial crisis brewing in Canada only time delayed. Carney and Company are eager to separate you from your money.
http://dailybail.com/home/fed-officials-led-by-greenspan-saw-housing-bubble-in-2005-di.html

#49 Randis on 07.05.11 at 11:17 pm

Stunned:

I would have set myself a watermark and would have sold already once it reached my target price …

I mean, common, greed kills you. Its greed that turns ppl into financial ruin, think of addicted gamblers zombie-lized themselves in front of slot machines in a casino. They might have won a couple of bet but unless they pull themselves out with they profit, they lose eventually thanks to greed. When Gordon Gekko tells you “Greed is good”, no its not that good really.

Dude, know your limit, know your target and goal, don’t blink and pocket the profit now. 2mil in a 6% diversified portfolio with fixed income payout would give you 120k income per year. Ask your houseporn neighbours when was the last time their portfolio of houses generated even half of that cash flow for them …

I would be a happy camper if I am in your situation.

and props for your for coming up with the obi-wan thing, lol

#50 Utopia on 07.05.11 at 11:19 pm

Actually, on second thoughts…

Why the hell should I really care if this guy sells or not? It is actually better for everyone if he holds and goes down with the market. If he sells then it only means that some other poor sap who bought higher will face bankruptcy and failure later. If he holds it is more likely he will stay and continue to pay the mortgage.

And besides, if he sells he might end up selling to someone I like better than him. I don’t know this “stunned” guy from Adam and I quite frankly do not care if his life tanks because of his poor investment decisions.

His logic is idiotic. Let him flounder in debt and lose the millions for all I care. I guarantee his opinion of the neighborhood will be a lot different once they carve up his home for UBC rental rooms and make him live in the basement.

#51 Bill Gable on 07.05.11 at 11:25 pm

I came to the city of Vancouver when it was such a bucolic place.
The Seventies. Kitsilano, no lattes, Bimini, The Cave, and well, it may have been wet at times, but, my word, I was hooked. Stanley Park.

Now, privileged and lucky to have escaped the RE carnage, I have watched this lovely City destroyed.

Mr. Turner does not mince words in this puppy. I wish we didn’t have the East end, the crappy infrastructure and the mass insanity, extant, in this once lovely City.

Meanwhile our Mayor will build some more bike lanes and watch the empty till, at City Hall, blow up and fly away.

It makes me very uneasy. This post is VERY SOBERING.

#52 Into the Sunset on 07.05.11 at 11:28 pm

Stunned needs Darth Vader to give him a good kick in the ass!

Where did the oxymoron called ” Common Sense” disappear to in our society?

#53 Utopia on 07.05.11 at 11:34 pm

“But Vancouver actually matters because it’ll be ground zero for the housing correction” ~~ Garth
———————————————–
Best line of the day. Keep repeating it. Cause when Vancouver finally blows it will surely kill confidence in housing from coast to sorry coast, and that ain’t no joke folks. Nobody will be immune from the fall-out…credit will evaporate overnight and the hand wringing will begin in earnest. This has got to be just a bad dream. How could these guys have not seen this coming when so many were warning of these dangers all along?

To Ben Rabidioux: Great article man. Loved the charts.

#54 mousey on 07.05.11 at 11:42 pm

Re: Stunned,
As our great and pagmatic Canadian poet (L.Cohen)said, “I think it is time to cash in my chips.” Cash in. Rent a very nice house in catchment…we do. Check out Criag’s List Point Grey or Dunbar or? and look for 3+ bedrooms and see what is out there. If it isn’t a teardown on a 50 foot lot you are probably in for a nice stable rental. Don’t mess with a poet’s logic.

#55 Jody on 07.05.11 at 11:42 pm

I can’t believe he’s asking Garth if he should sell, it’s not “stunned,” it’s “dumbass.” Sell dumbass, sell, sell now, you could rent a nicer place for less than your current house payment. $800,000 at 6% a year is almost $50,000 a year to live off. The other million you can invest to. You will NEVER be in the same situation in your life again, sell. All these baby boomers are going to cock it all up and then I won’t be able to retire until I’m 95, wankers. Sell, sell, sell, sell, sell, sell, sell, sell, sell. SELL!!!!!!!!!!! Go live in Bali for 20 years, kids will like it more than Vancouver, they’ll learn a lot more to. Or you could go live in Italy or Greece, or Chile, or South Africa, hell you could invest the money, clear $100,000 a year and still be putting interest earnt away for retirement and travel the world for a few decades living off the interest. Why stay in Vancouver and watch the Canucks lose and be subjected to talk of upgrading the kitchen to concrete counter tops or learning all about the latest thing to consume? Get out and enjoy life, you have a golden opportunity staring you in the face, don’t be a dumbass.

#56 Aaron - Melbourne on 07.05.11 at 11:44 pm

Debt = Sarlacc pit.

#57 Slow Learner on 07.05.11 at 11:45 pm

Question on the money laundering theory, why wouldn’t foreign nationals just launder their money through the casinos in BC like the drug growers do? Oversight in BC casinos is apparently very lax, seems easier, safer, and less traceable than real estate.

#58 Devore on 07.05.11 at 11:48 pm

2M… that’s like knowing you’re holding a winning lottery ticket, and lighting it up. With 2M in hand, you can take it easy at work, enjoy hobbies, go traveling, live anywhere in the world.

I don’t know what people like this guy are thinking. That it’ll go up another 100K?

#59 The Phantom on 07.05.11 at 11:48 pm

Garth, Fellow bloggers and lurkers:

As I read this I was considering my own situation however I have one zero less than this guy has for a profit margin (assuming he’ll make 2 mil on the sale of his home…)

All I have to say to the person who would undecidedly look a $2 million gift horse in the mouth…Holy Mackerel, fishing tackle!

On another note, did you guys all observe the fact that the interest rates rose just a wee bit today? One person on the media said it had nothing to do with the Bank of Canada and that this was attributable to other market forces. Makes one wonder what will happen when the B of C decides that inflation is enough of a concern to “cool” the economy…Of course I wonder how valid the real inflation rate is anyway. Did they not remove some integral parts out of the equation or was that our neighbours to the south? Can’t remember anymore as it has been a busy year darting all over the landscape.

Hey Smoking Man, have a cool one for me tonight, okay?

Night all

the Phantom

#60 Kilt on 07.05.11 at 11:49 pm

SELL

Split the money and give the kids half (invest it bonds, they won’t care about the crappy returns).

They also won’t care what school they went to when they hit university with a cool million in their pocket.

Kilt.

#61 dmc on 07.05.11 at 11:51 pm

Take it and think yourself lucky you aint been losing over 4k a month

http://tasmanianrealestatetrouble.blogspot.com/2011/07/social.html

#62 Axehead on 07.05.11 at 11:52 pm

Either way, the money is not earned. There is something terribly wrong with all of this. This guy is a complete idiot, or worse, beset with severe greed. I hope he holds out and looses it all – can’t bring myself to see his side of this stupid equation, nor do I want to see the carpenter with the thong any more….man, that’s creepy

#63 Joseph [original] on 07.05.11 at 11:55 pm

What we’re talking about here is price appreciation at $147K per month. This steep upward price appreciation doesn’t just snap back $300K a month later.

#64 nonplused on 07.05.11 at 11:56 pm

Nice post Garth.

The only way house prices can rise as fast as they are in Vancouver is run away inflation, which we don’t have. Even if we get a 70’s style inflation it will be a decade or more before wages catch up to house prices. Therefore the best that can happen is they meet somewhere in the middle.

Unless the dollar collapses of course. But while I think that is possible, it is many years off and definately not what is driving this.

#65 Nostradamus Le Mad Vlad on 07.05.11 at 11:56 pm


Male Vanity, thy name is Sell Yesterday, take net profit of (say) $1.925 mln., put it into nice, balanced funds returning 9% p.a., let the income pay the rent + bills, downsize and live an adequate life. It’s simply a mind-set change, that’s all.

“Kinda like an old growth ant farm.” — Nice painting of us old farts, as we wander off to the geriatric wards!

“Asians? Dream on.” — Countries all over (see further on) are having difficulties, and politics doesn’t play any part in this.
*
One way or the other, the carbonazis are going to have govts. (re: taxpayers) pay higher taxes for their work; HAARP in five minutes or less, and US Army Money well wasted! A Globalists’ rats nest — they know Asia is rising, albeit slowly (do I hear infighting from the elite?); Brazil next to feel the pinch, and Right To Work states.

17:53 clip Chris Martenson on Peak Oil; Charts, etc. US only; Factory Orders Underwhelming at best; Selling Golden Teeth to make ends meet (kinda painful).

Apparently, the world is not the only thing falling to pieces; Obama has morphed into Dick Cheney, just in time to be re-elected in 2012; Cuba and America Healthcare differences, and Chavez is recovering well after hospitalization in Cuba (he wasn’t charged an arm and a leg!); Speaking of Baffin Island, new mining project (rather big); Lytro New camera that brings new pix.
*
Chaos — New stuff. Check the spelling of the names in the first few paras., then look at this — the Astral Plane is the second heaven. Notice a similarity in spelling in Askleposis and the others?

#66 terces on 07.05.11 at 11:59 pm

greed is an amazing, powerful and wierd human emotion.

#67 Chaos on 07.06.11 at 12:32 am

Listen up….

They’re never leaving Kerrisdale, Southlands, Dunbar, West Point Grey, Shaughnessy, South Granville, Kits or the whole area bounded by Marine Drive and south of 49th ave.

Money is nothing in comparison to the society to which “they” belong by living in their ‘hood. The clubs “they”belong to, the schools “they” go to, the parties “they” attend.

Seriously, if you haven’t seen it…you cannot know it.

Asian money is considered to be temporary. It’s not part of the culture.

East never meets “West”, never.

#68 totalchaos on 07.06.11 at 12:41 am

Dear Mr. Stunned,

I understand you are concerned about your children moving schools. If the school has the room, it is very easy to apply for a cross catchment space. If getting your children to and from school is an issue, in my experience, 2 million covers a lot of cab fare.

I check the rental listings regularly and there are a lot of lovely homes to rent on the west side right now. Granite and S/S all the way. It shouldn’t be a problem to find a lovely place – and many take pets too.

I would sell my house in a heartbeat, but there is nothing in our city to rent that will fit our family of 6. I check every day and I’m not being picky either! 6 people do not fit in 1400 sq ft. You won’t have that problem, as west side rentals come in all shapes and sizes. Please, PLEASE, sell the house. Win the lottery. Just make sure you sign a long lease on the rental. I would do 2 years.

Regards,

totalchaos

#69 BuBu on 07.06.11 at 12:44 am

Alberta be careful:) Oil doesn’t always save you…

http://www.arabianbusiness.com/palm-jumeirah-prices-sink-below-aed650-per-square-foot-408211.html

#70 JCH on 07.06.11 at 12:55 am

Are you a freakin’ idiot, Stunned? Stop being so greedy. Call a realtor in the morning, list by the end of day, call in busy for the rest of the week, frantically declutter, clean and stage, book open houses this weekend and next, sell for first reasonable offer. Encourage buyer to be an
investor :) and lease it back to you or rent the nicest house available in your school catchment area on a long lease. You’ll never regret cashing out now even if this isn’t the top – this is a gift that will change your life massively, for the better. Now you can both stay home with the kids, live your dreams, whatever, and live a great life, then in 5 years or so you can buy a house again for a fraction of your then net worth.

#71 westCoastRoller on 07.06.11 at 12:55 am

Man Garth…

I just cant believe you took a car to YVR… what were you thinking!! Didn’t someone let you know there is a train that goes right downtown for $12.50 (return)… and its there in 25min +/- a few seconds. I know you love the hummer but when in RainCity do as the locals do. And if you dont want to pay the airport add fare go to the 7-11 in the terminal and buy a single faresaver ticket from the nice man there and you’ll be downtown to $3.75 each way.

#72 martin on 07.06.11 at 12:57 am

with this blog you are on your way on a government petition mr turner

#73 SophieZombie on 07.06.11 at 12:59 am

”Victoria real estate market is balanced, despite inventory levels hitting a 15-year high.”
Not sure who is the most ”high” between the Victoria Real Estate Board or the sellers still saying ”everybody wants to retire here!”.

http://www.timescolonist.com/business/Victoria+real+estate+market+balanced+despite+inventory+VREB+says/5048941/story.html#ixzz1RIhUKJmb

http://www.timescolonist.com/entertainment/music/downloads/Victoria+real+estate+market+balanced+despite+inventory+VREB+says/5048941/story.html?id=5048941

#74 garrulous squirrel on 07.06.11 at 1:12 am

Sorry G…….I read what you wrote…..not understanding what you meant.

“A survey not a study. I am happy to review your empirical data. — Garth”

I wrote,

““A recent ‘study’ done by a local real estate developer”…..of course it must be true!!. ”

Based on what you wrote,

“Even a study done recently by a local real estate developer found the vast majority of ‘Asian’ condo buyers, for example, are local residents of Chinese heritage. ”

Either way……everyone in the real estate business is full of crap. And lets face it……..a developer is just a carpenter who’s job is on the line if his project doesn’t sell. Real whores are commisioned salepeople who get nothing if the next sale isn’t completed. Both get ‘the big slide’ if the market jack-knifes.

Experiance tells me that both these groups are heavily in debt, most have zero savings and are always heavily in debt. Neither of these groups has any reason to tell the truth….about anything!!

And you don’t want to review all the articles that have been posted in the international papers regarding the flood of foriegn nationals flooding into Canada with their ill gotten gains do you? If so……..we’ll open up the flood gates for you……………………….it won’t be spamming you dude….just the rest of the world saying openly what the local media gets paid to not to print.

#75 Brandon on 07.06.11 at 1:26 am

Pigs get slaughtered

#76 Renter in Van on 07.06.11 at 1:33 am

Dude-sell! Same position as you. Sold last year on the westside and invested the money in a nice diversified portfolio. The money we are making in returns is more than the rent we are paying. It was so satisfying not to have to pay for the boiler when it died- landlords problem. In addition the visa bill has plummeted because there are no home improvement/house porn projects to spend on. Because we rent in the same neighborhood as we sold we can keep our “status” as westside folk with minimal disruption to our kids who are attending their same school. Perhaps people snicker behind our backs but most of our circle think we have made a smart move! Oh and I am the worst house horny woman you could come across but even i couldn’t argue with the numbers.

#77 JCH on 07.06.11 at 1:34 am

For all those people who keep posting things like ‘I know the market is going to drop, but I plan to live there a long time, so is it okay to buy now?’, you should stop and think about it. Why in the world would you buy something now when it will likely be on sale later? This is especially true in the bubblier markets. Eventually (or soon) prices will normalize, and by paying less later you’ll be far ahead.
We did the math on this: 500k house, 375k mortgage. For each 1% increase in interest rates, it was only 18k more in interest for a full 5 year term. The house’s market value fluctuates that much in a month! So, you should have more to fear from overpaying now and being stuck with a massive debt than from interest rates rising or being ‘priced out forever’. You won’t be, and you’ll be glad to have a much smaller mortgage when you do buy. I know we are so glad we did not buy that house, in Langley BC, because by all metrics we should buy it for about 300k max. So, we rent it instead:) Also, the sunk costs of owning would be equal to our rent, with no surprises. So it’s not true that we’d be building equity by owning but not by renting. Mother-in-law still doesn’t get this, but fortunately, husband does!

#78 TheFirstRick on 07.06.11 at 1:53 am

“…..happy to hand over 70% of their incomes for a place to live………..”

The level of illegal activity in Vancouver and the surrounding area makes this number questionable. 70% of their REPORTED incomes, OK.

The 6 billion dollar a year pot business doesn’t all go to pizza and nacho chips.

#79 syd on 07.06.11 at 1:56 am

Garth, tell me this please..
With incomes lower than Toronto and house prices twice as much , how can anyone qualify for a mortgage of 1mil plus ?

#80 Brad on 07.06.11 at 2:04 am

This is the stupid crazy thinking we have to deal with in the Greater Vancouver area. I have been preaching about a housing bubble burst for almost 4 years and now people just smile and think I’m stupid. I’m going to continue renting until homes are affordable; sell while you still can. Looking forward to buying your home half price.
Brad, Surrey B.C

#81 Jimbo on 07.06.11 at 2:29 am

In 2007 I bought a basket of out-of-the-money oil call options for a total of $30K. These option were highly leveraged to the price of oil.

A year later, oil shocked almost everyone including myself by rocketing up to $146/barrel. At the July 2008 peak, my oil call options were valued at $1/2M.

I was on top of the world. But did I sell? No way! The consensus was that oil was on it’s way to $200/barrel and, when that occurred, my oil call options would be worth over $1.2M. Greed took over my common sense.

Six months later the unthinkable had happened… Oil had plunged on a straight line from $147 to $35 and I rode it all the way down. I kissed ONE HALF MILLION DOLLARS bye bye because of my own greed and naivety.

I learned many lessons from that experience:

1. Don’t be afraid to take money off the table. Average out systematically.

2. The time to start worrying is when an asset has soared in value and everything has gone right. Inexperienced investors get confident and excited at that point. But more experienced investors know that, if everything has gone right, there is now only room for things to go WRONG.

3. The “unthinkable” can happen. Tech stocks CAN collapse in value. Oil CAN go from $147 to $35 in six months. Vancouver real estate CAN free fall to 1/2 its value.

Take your windfall, move on, don’t look back, and find another opportunity.

#82 Bill Gable on 07.06.11 at 2:29 am

Mission Viejo home sales were 3.8% of the countywide market in the latest period vs. 4.0% in the year-ago period. The Refi Plus program will waive the normal credit score requirement for a refinance; it will have reduced documentation standards for proof of income; and it will allow for computer-based appraisals, which tend to inflate the value of a home and make it easier to qualify for a refinance. Search online for “Refinance 123” they are the best and fast.

> an on line ad that smells of burnt squirrel.

#83 Not Fooled By Property Spruikers Hype on 07.06.11 at 3:36 am

Australian Realtors Bullshit BINGO

Follow link: http://nfbpsh.blogspot.com/2011/07/australian-realtors-bullshit-bingo.html

Want to have some fun at your next Auction or Home Open?

Follow the link & Print this BINGO Card.

I Guarantee You will shout BINGO every time.

In Fact it should take no more than 5 minutes to play this game.
(Realtors wont be able to help themselves)

This Bingo Card is full of Realtors Catch phrases & Spruiks.

Perhaps you might like to try an alternative method, that is much much more fun.

Print this Card out and hand it to the Realtor.

Now inform him that he cannot use any of the phrases on the card when talking about the property you are about to view.

Watch as he stands there in stunned silence unable to speak.

I am positive this could also be used in any Canadian market

#84 Jay Currie on 07.06.11 at 3:37 am

Er, [wait New York second],

SELL!

Right now.

#85 SquareNinja on 07.06.11 at 5:14 am

#6 garrulous – Exactly! Vancouver’s still a massive bubble, though. It’s also a cult.

#86 2MKid on 07.06.11 at 6:32 am

Dude, just listen to this song:
http://www.youtube.com/watch?v=bw9CALKOvAI

#87 fancy_pants on 07.06.11 at 7:14 am

are you kidding? you just won the lottery pal. $1 million tax free. I was eyeing a greater vancouver area home as an investment in the spring of ’08 for just under $700k but never bit. No balls. or was it the ball and chain? It would sell for double now.

anyways, make off like a bandit now while you can. You kids may bitch for a few hours in the time it takes them to make new friends but they will bitch at you for a lifetime if you don’t sell.

it’s the greed holding you back isn’t it? You’re waiting to see if it goes higher. If you had $1 million in cash would you gamble it by rolling a 6 on a die to increase it by 20% but if you roll a 1-5 you decrease by 20%?

just asking b/c that is indirectly what you are doing.

#88 stage1dave on 07.06.11 at 7:25 am

A 2M dollar “profit” for making the mortgage payments? Wow, I’m in the wrong business…I still quote my labour @ $800/day plus expenses…

Anyway, don’t worry about the kids being displaced from their “catchment”. My parents used to sell a house if they made a thousand bucks & then thought nothing about moving us halfway across the country!

Never done me no harm…unghhh…don’t think so…grunt…

You could always take the profits & build them their own school, on it’s own block, surrounded by it’s own neighbourhood! Set your wife up a 6 digit charge account at the local Wal-Mart…

How much is enough?

#89 Ret on 07.06.11 at 7:43 am

Sell, cha-ching, but lease back. The greedy buyer believes that prices can only go up so they will be glad to let you lease for say $3000 a month. Make the lease back a condition of the sale. Play a little hardball.

In a year, after RE hits the fan, you can buy back from the bank for $1M or less. In any event, you will have a year to make any decisions.

You won’t even have to move.

First Van will fall and then the T.O. condo market will crater.

#90 Matthew on 07.06.11 at 7:45 am

Two million tax free? SELL SELL SELL SELL SELL. Better to miss the last bit of froth in an irrational market than see all of your gains go bye-bye.

#91 Brandon on 07.06.11 at 8:06 am

Dear god … I wish I had this guys problems… Toss 2M into a preferred ETF and suddenly you’re in early retirement…

#92 gentleInvestor on 07.06.11 at 8:13 am

Stunned,

Everyone is calling you a dumbass. But it can be tought to pack up and move. Try this.

List your house. Put it up for sale!

But why don’t you put in a condition of offer that you get to rent your own house for one year at a certain rate – you figure that rate out.

By the sounds of it, you’re sure to find some real dumbass “investor” who will take you up on your conditional sale, probably above asking.

You’ll be laughing to the bank with a year to sort things out.

#93 pessimist on 07.06.11 at 8:18 am

Stunned in Vancouver,

Let me just make sure that I have this straight, you don’t know whether to:

1) Sell your house – that you freely admit would sell for far more than it is worth – and bank a sum of money that would mean that you could retire today with enough money for the rest of your life, or

2) Wait to sell your house with the possibility that you may have enough money for the rest of your life plus a bit longer with the risk of it falling and losing the opportunity entirely.

Are you serious?

#94 canali on 07.06.11 at 8:31 am

what is all the pissing about, esp on vanouver’s RE being overinflated…don’t you know it’s now a ‘balanced’ market? ;)
http://www.vancouversun.com/business/Balanced+housing+market+takes+root+Metro+Vancouver/5054474/story.html

#95 Utopia on 07.06.11 at 8:35 am

#73 SophieZombie on 07.06.11 at 12:59 am

”Victoria real estate market is balanced, despite inventory levels hitting a 15-year high.”
——————————————————
Too funny Sophie. Those Realtors just love that word “balanced” these days. It is interesting because their logic is actually unbalanced. Like when I say “this market is insane” I really actually mean crazy and not in a healthy way.

I can easily imagine that the Victoria market will continue to be in balance (using Realturd logic) right up to the point when 50% of the homes are for sale and the other 50% are underwater.

It’s 50-50 right? Everyone knows that is balanced. Even children.

#96 MM on 07.06.11 at 8:42 am

Money isn’t everything. But neither is a house.

Start your thinking from scratch. With $2m in the bank and the opportunity to buy your own house, what decision makes most sense and gives your family the better life?

#97 Kevin on 07.06.11 at 8:47 am

Randis:

“a 6% diversified portfolio with fixed income payout”

There’s no such thing as a “diversified portfolio” that will consistently pay out a fixed-income rate of 6%.

“Fixed-Income” means interest-producing assets (bonds, GIC’s, CSB’s, high-interest savings accounts), the sort of things where the payout is guaranteed to be a certain percent, as opposed to return-based assets that rely on unpredictable dividends or capital gains.

It is impossible to construct a portfolio consisting of instruments that will produce a guaranteed 6% per year indefinitely. Someday, once interest rates return to normal, it may be possible to construct one, for a while, but not forever, and certainly not today. But that’s what “fixed income” means – reliably producing a predictable income this year, next year, and 30 years from now. And 6% is too ambitious.

Not so fast, cowboy. Bank perpetual preferreds are paying north of 5%, and this is in the form of dividends, which (given the dividend tax credit) equates to roughly a 6% non-registered GIC yield. Ergo, a fixed-income portfolio yielding precisely what the poster suggested. — Garth

#98 Kevin on 07.06.11 at 8:52 am

Garth’s right, this is a no-brainer. Sell now, reap the profits, move somewhere a little more sane and pay cash for a much nicer house that costs 1/6th as much. Then invest the remaining cash and never have to save another penny for retirement. At 55, hang up your hat and enjoy the good life. The kids will get over it.

#99 gomi on 07.06.11 at 9:10 am

Vancouver ground zero. But it seems that Calgary has already peaked and is the first domino to fall in Canada…

#100 Utopia on 07.06.11 at 9:25 am

You are all giving this guy the wrong advice. This is not a game-show like “Price is right” ……..or is it?

The casino mentality has officially taken over the mind of this blog now too. You see, all you people screaming sell, sell, sell are only saying what you would do if you were in his shoes.

Take another greater fool to the cleaners and bank the easy profit. And all that does is drive up the market and the panic buying further yet.

But if we all really object to a housing bubble we should really be encouraging people like him to stay where he is and be responsible with the debt. Conversely, we should be discouraging other fools from buying overpriced homes. That is what it would take to prevent the eventual bursting from happening.

Imagine if there was an open house…..40 couples walked through for a look….then refused to compete on offers and just told the vendor and the Realtor to “stuff it”.

What if they all demanded a lower price?

Like they do in Phoenix these days. Yeah, that’s right. Buyers there are true heartless vultures that are actually working together to lower prices and refusing to bid homes up anymore. They are telling the banks, the owners and all the dealers to just take a flying leap off the deep end.

Now that’s a buyers market. (balanced too, I might add)

#101 BrianT on 07.06.11 at 9:33 am

100 posts from guys telling this Married With Children guy to dump the place, put the money in the Caymans and live in Spain, Greece,etc.etc. No mention of the crying fits his wife has already thrown at the mention of losing what she treasures most.

#102 Mr. Reality on 07.06.11 at 9:44 am

Buddy,

Give you freakin head a shake! You don’t want to move because of your kids?

I bet your kids will have a better life with you having 2 million in the bank and never worrying about a thing for the rest of your life if you properly invest it.

I’m glad i moved away from Vancouver years ago. The stupidity of the masses in that town is simply dumbfounding.

Mr. R.

#103 bill on 07.06.11 at 9:48 am

sophie zombie have you discovered ‘plants vs zombies?

#104 Omni on 07.06.11 at 10:02 am

WHY!? O WHY do so many people concern themselves with thier kids keeping thier FRIENDS. Honestly, its family and blood relationships that bind you, friends come and go.
Sell it and take some time with your kids, move, vacation, work part time, rent, give your kids a foundation that they can count on for life.

#105 Omni on 07.06.11 at 10:04 am

#102 Brian T.
Forget the wife if she cries over a house “that she treasures most in life’ more that logical sense. As I said above, I repeat that again.

#106 disciple on 07.06.11 at 10:05 am

#81 Jimbo…Thanks for sharing your experience with the oil gamble.

I believe that oil will go to $200/barrel pretty soon for various reasons. I would like to place my money where my mouth is. So, can you give me some more details on that “basket of out-of-the-money oil call options” which are “highly leveraged to the price of oil” ??

I would be very, very interested….thanks.

#107 rainbird on 07.06.11 at 10:05 am

#98

If you buy preferreds or bonds that have a coupon rate of 5%, wouldn’t you have to pay a PREMIUM price – which would make your yield at most 2% – which is exactly the same as TD?

In addition, if the interest rates go up you actually lose part of your investment. Is that not true?

If that’s not true then where do you buy preferreds or bonds at par? It’s impossible.

#108 Stevermt on 07.06.11 at 10:07 am

hey Utopia..#50 right on !! of course our first instinct is to all go over there and shake the stuffing out of that guy..I mean it’s like he’s holding a winning lottery ticket and is wondering if Garth thinks he should claim it. Let a big breeze come along and blow it out of his grasp, taking it down the street and into a raging river and over a waterfall …what a great visual.

#109 Hoof - Hearted on 07.06.11 at 10:17 am

Stunned:

I was quite pissed off at your hesitation to cash in the RE lottery ticket….thinking how greedy ….

However…If you read this blog remember this is a global economy and we in BC did have a run up from Hong Kong which tanked…..then re-booted with mainland China….but there are warning bells coming from China.

I drove to UBC a few weeks back….South West Marine west of Granville has several For Sale signs. The market seems stagnant

Unless you absolutely positively have to live in the neighbourhood ( and in reality there are very few rational reasons for that) don’t fall in love with it…..its an object….a possession

The other scenario is the market drops and you see every free dollar you made heading south when the peak hits …..then the fall and kicking yourself.

Your call.

#110 John Reid on 07.06.11 at 10:23 am

FREE TRADE WITH LOW WAGE COUNTRIES WILL MAKE US A LOW WAGE COUNTRY AND NOTHING MORE. Now we look at the reality that was always there but was hidden by political two faced platforms. Portugal is now downgraded to Junk Status (Moodies), Spain and Greece are worse. These countries always were like this. The EU is a farce that amounts to progressive cultures propping up ones that are not willing to do the hard work of developing. A sombrero and siesta is enough to make them happy unless you give them development for free. There is an old expression that weak people will pull you down to there level long before you pull them up to yours. Over here we have Mexico and Brazil pulling down the USA and Canada.China gives us poison products and makes it impossible for us to own a home. How do we prosper from trade with low wage countries?(data from Sympatico.ca News the social/economic analysis is my own (C) John Reid 2011)

#111 Mr Buyer on 07.06.11 at 10:24 am

Sell Sell Sell Sell Sell Sell. You must protect your children’s future. I stand against these bubbles and would like to see a few strategic laws put in place to bring this nonsense to an end for future generations. I do not wish the pain and suffering that may be visited upon those who borrowed against equity in their home or simply borrowed too much for their home in the first place. I envy the opportunity you have to cash out and tone down your life with a certain amount of financial security but I fear you will not have that option much longer. If any potential buyers asked if they should buy your house I would say…DO NOT BUY, DO NOT BUY, DO NOT BUY (please get out of the trap you are in, unless of course 700k is easy for you to deal with then ignore me. I will be working until I die)

#112 clem on 07.06.11 at 10:29 am

everyone will tell you to sell, but consider this: had you asked that question on this blog in the past and followed the blog herd you would have left a lot of money on the table. many people will question your intelligence, but so far that house has made you a lot of money. in my experience stupid people rarely make a lot of money.

Turning housing into an investment commodity or futures market is socially destructive. The stupidity appears to be yours. — Garth

#113 vyw on 07.06.11 at 10:40 am

The realtylink index for June 2011 is here:
http://www.rebgv.org/housing-price-index?region=all&type=all&date=2011-06-01

There are actually 2, maybe 3 markets in Vancouver now. The numbers for townhouses and condos are relatively flat YOY. The detached homes however are up >13% YOY and in some areas ie. Vancouver West-side >30% YOY.

One of the factors in my view is the low number of listings. Demand is strong, but supply is modest. I suspect that sellers are worried about pricing themselves out of the market. If you sold a typical west-side home last year, you lost out on a 30% tax-free gain in 12 months. So sellers are reluctant to sell and some may even wait until the market tops and sell on the way down since other homes will also be falling.

Vancouver SFHs are already up almost 50% from their bottom in March 2009; Vancouver West-side is up 90% over that time period.

I think the Vancouver SFH market still as another leg up – maybe 30% by spring 2012. Other markets ie. townhouses and condos and perhaps some neighbourhoods like Sunshine Coast (Squamish) have levelled off and may start to decline before then though.

#114 Timing is Everything on 07.06.11 at 10:48 am

#102 BrianT

Good point…Even Garth ain’t ‘cashing in’ his chips.

Sell, get divorced, she takes half, pay alimony, child support, substance abuse…etc. I’ve seen it before…

Back to the basement ‘sweet’ from whence he came.

#115 Mr Buyer on 07.06.11 at 10:52 am

#101 Utopia …. I think if we were truly heartless vultures we would be encouraging people to buy and flip as quickly and as many times as possible so that when the music stops there are as many distressed home owners as quickly as possible after the last dance…Life is a one shot deal and sometimes it takes a hell of a long time to recover from some missteps (if ever). I did not have the respect for money that I should have when I was younger and I will pay for that with my retirement. That is okay but only because it has to be okay.

#116 Mr Buyer on 07.06.11 at 11:02 am

#111 John Reid…That simple argument was put forth when free trade started and like many simple truths is self evident after the fact. We can bring jobs home to Canada and get our country back to work and prosperous but we must choose to do it.

#117 disciple on 07.06.11 at 11:14 am

#111 John Reid…
Your heart is in the right place, but your head is all WASPy. Let me explain…your use of the words “us” and “we” is at best un-informed. Trade with low wage countries helps some of “us” and hurts most of “us”. If you ignore the world of conspiracies and conspiracy theory, you won’t understand anything. – disciple

#118 debtified on 07.06.11 at 11:33 am

‘Stunned’ has been lucky (and maybe even smart) for being in a position to cash out $2M of winning in Real Estate market. For that, I congratulate him. He’s done better for himself than most people on this blog.

To me the choice is obvious. I can’t possibly understand why he’d keep playing the game and keep the house. But, hey, he’s the one with the $2M dollars of winning. I’d say, if he doesn’t sell, he might as well double down by taking out a huge HELOC and buy a few more houses in Vancouver. Maybe he’ll win another million or two in another five years.

Last weekend I was at a friend’s party in his house at the border of Burnaby and New Westminster near Kingsway Blvd. The house is new in a regular size lot but it has been designed with two kitchens so that two families can live in it, separately – one upstairs and another downstairs. Even the two-car garage has a wall in the middle. Each half was sold for close to $600K. Total for the house was almost $1.2M.

My friend admits he was not planning to buy and didn’t even have 5% for downpayment. But a real estate agent who was recently introduced to him by a friend did his magic together with his cohorts in the bank and, voila!, he moved in to half of a million dollar house. For someone who works in a grocery store, that is something.

I congratulated him then I kept my mouth shut. He deserves a little bit of happiness. For now.

#119 Bill Gable on 07.06.11 at 11:47 am

vyw .
Your call for another 30% leg up is a call that reminds me of a guy I knew in the Naval Reserve. He would be the be the guy that invariably had a large pile in the middle and would roll “Boxcars”.

I think you are out of your cotton picking mind – BUT – with that being said, ‘who knew’ that people would think Ben Bernanke could spell his name right three times in a row, and look how their bets turned out.

I have friends in California that have gone from “Living in Marina Del Rey” (*Marc Jordan, great song, BTW)…to living with a Scuba Tank on, in less than 10 years.

I was encouraged to see one of Mr. Turner’s Legion had a GRADE SCHOOL teacher try and drum some basic money skills into our wee heads.

Sure didn’t happen in the decent Public Schools I went to. (Please no jokes about any decent school having me as a student – I tend to agree, but you catch my drift).

I had my jump the shark moment yesterday when the can driver from Fiji, who was bravely screwing up getting me home from YVR, tell me he had TWO condos and was going to get rich.

He had a 1/2 share in a Yellow Cab. The Cab business has been eviscerated (The Canada line actually makes it all the way to the Airport and people use it) – and so his fares, he admitted were flat or down. The Cruise Ships are disgorging angry Americans who think 17 dollars for a pound of Cheddar is a bit much – so their wee hands are firmly in their pockets.

Two condos. I asked how it was going with them. He admitted they were “Just about cash flow positive”.

That is when I started looking for Fonzie and the Shark as we crossed the Granville Street Bridge.

Faggedaboud it!

**TAKE THE 2 MILLION – and RUN!

#120 Hoof - Hearted on 07.06.11 at 11:52 am

Extra $540b debt rattles China

Local government borrowing load threatens banking system

Read more: http://www.theprovince.com/business/Extra+540b+debt+rattles+China/5056007/story.html#ixzz1RLMpwf77

China’s local government debt may be 3.5 trillion yuan ($520 billion US) larger than auditors estimated, potentially putting banks on the hook for deeper losses that could threaten their credit ratings, Moody’s said Tuesday.

China’s mountain of local-government debt has long been seen as a major risk by investors. The worry is that slower growth in the world’s second-biggest economy could set off a wave of loan defaults and hobble its banking system.

“Banks’ exposure to local government borrowers is greater than we anticipated,” Yvonne Zhang, a Moody’s analyst, said in a statement.

Unless China comes up with a “clear master plan” to clean up the problem, the credit outlook for Chinese banks could turn negative, Moody’s said.

Moody’s debt tally is near the midpoint of various estimates from Chinese authorities, which used different definitions and accounting methods to compute their debt totals. The varying figures have led to confusion about just how serious the problem could become if heavily indebted local governments default, saddling banks with large loan losses.

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

Perhaps do a review of Britain, Rothschilds, Opium wars etc.

Perhaps review how Communism was a creature of capitalists ..to help destabilize the Czar….read about Bolsheviks……Stalin was a mason

China is a bizarro country……..it can lie cheat steal aka HIDE the truth due to its bulk…….in the end truth will run out…and China may end up the greatest Potemkin village in history.

#121 Ryan Limerick on 07.06.11 at 12:01 pm

it kinda bothers me to read emails sent to Garth asking the same thing over and over when they already know the answer : “Garth what should I do? My house has tripled in value, but my wife and buddies think renting is for losers, and what about the kids??”

Dude… don’t sell. Stay there, it’s a beautiful neighbourhood, keep wife and kids happy, keep the social status up, watch your “fortune” evaporate (easy comes easy goes), and in a couple of years I’ll buy your house. You don’t have to worry so much. Your wife and kids is all you need to weather the economic storm coming ahead. Just keep following what the TV tells you, do exactly as your neighbours do, and never NEVER trust math or facts. A hunch is all you need… you mighty Startrooper……..

#122 I live in Edmonton on 07.06.11 at 12:02 pm

Crazy the bubble is ripe & ready to pop in a lot of Major cities in Canada. In Edmonton due to soaring living costs for groceries, electricity & other costs for the basic needs soared under the Conservative Government here as they allowed deregulation & Privetization of everything here in the Edmonton area (utting their coporate investors before the good will of the people). Recently the City Of Edmonton a few years back starting selling of the City Owned Electric Company Epcor to “private Investors” this was pushed through behind closed doors. It costs more for a taxi, food & eating out then in New York in Edmonton now. SO hence, our Real Estate NEVER recoverd from the Credit Bubble we rode off of from the US in 2007. Costs of living for Edmonton are too high, standard of living has collapsed. Over 80,000 families (almost 25% of the cities population) live in poverty under $12.50 an hour-for the entire family.
Now we have the highest Foreclosure Rate in the Country in Edmonton, with many condo buildings falling into full foreclosure. Condo Prices have fallen over $9000 per unit average over the last month alone. The luxury home market keeps SFH prices looking like they are stable but inventory is starting to soar, and sales are shrinking!
Anyone who buys in Edmonton is a greater fool indeed!

#123 garrulous squirrel on 07.06.11 at 12:03 pm

I gotta agree with Mickey on this one. The Chinese Laundry Express will keep Vancouver housing appreciating ……………..until legislation stops it. These corrupt Chinese officials of all stripes and levels only want to get the loot out of the country ( theirs) …they don’t care about the ‘value’ of real estate here.

Vancouver real estate can easily double or triple from here because ‘value ‘ and local economics have nothing to do with ‘prices paid’. This is not borrowed money and not subject to the vagaries /affordability of local ‘investors’ or Canadian interest rates. This is stolen loot that the Government of China has acknowledged is flowing to Canada in the hundreds of billions ( the amounts published have been stated as low estimates).

I challenge all Vancouver sellers to test this by doubling or even tripling the list prices. As we have seen there is no floor price for asking and every sale go’s for hundreds of thousands above asking. I have a theory that would tie in the ‘bidding wars’ into the flight schedule from Beijing.

Regardless……raise your prices into the stratosphere……the looters are getting the money out of China……..it has nothing to do with local prices. The first to fully understand this will profit greatly.

For the guy who’s just made 2 million…get your head out of your butt……by luck you picked up a winning ticket and now you’ve got a shot at five million……..ask and you shall recieve.

Think corruption is only in China? Read this about how the fat cats in the ‘charity business’ are paying themselves first in Canada.

http://www.cbc.ca/news/yourcommunity/2011/07/will-canadian-cancer-society-spending-make-you-stop-donating.html

#124 Edmonton Guy on 07.06.11 at 12:07 pm

Condo Prices in Edmonton starting to PLUNGE. We are in 2006 pricing Levels now…. Inventory up 10% over last month, sales down…
http://www.bobtruman.com/Edmonton_Condo_stats/page_1918040.html

#125 Burnt Norton on 07.06.11 at 12:25 pm

#102 BrianT on 07.06.11 at 9:33 am

Ah yes. The crying fits. So, the real question could be:
Is $2M worth risking divorce?

#126 T.O. Bubble Boy on 07.06.11 at 12:32 pm

GTA numbers for June are in:
http://www.torontorealestateboard.com/consumer_info/market_news/index.htm

#127 totalchaos on 07.06.11 at 12:33 pm

Many of the posters can’t read. There is no mention in the letter that “the wife” doesn’t want to sell. Heck, she might be the one pressuring him to cash in.

There is no mention of keeping the kids with friends either. Perhapse he has a child with special needs and a change in schools would be overwhelming for everyone in the family. This is a huge issue for some families.

If we are going to make up reasons for him not being ready to sell, perhaps this is the address the aliens have for him and if he moves, he’ll miss out on joining them for the Rapture.

That said, SELL the place already!

#128 Mr. Plow on 07.06.11 at 12:42 pm

He won’t sell.

If he knew what he was doing, he wouldn’t be writing Garth in a geeky star wars language.

He would be selling his house to cash in his 2 mil and finding an advisor to help him invest the 2 mil wisely and safely.

He knows he is sitting on a winning lottery ticket, that is why he wrote his nerdy email. But if he wanted to sell he would do it on his own, if he needs someone to tell him, then he has likely already decided.

#129 Junius on 07.06.11 at 12:44 pm

Re: Stunned in Vancouver,

This is a perfect example of the Jedi Mind trick fooling reasonable people into stupid thinking.

Take the money and run. It is a once in a lifetime gift. Even a Wookie could figure that out.

#130 Junius on 07.06.11 at 12:58 pm

#124 garrulous squirrel,

I can understand Slick Mick pushing the “Chinese money will never end” rant because he is a BS hypster. What is your game?

The dirty money coming out of China does have an end date. He is wrong. The reason the money that is coming out is so reckless in its spending is because they know the door is shutting on both ends.

The Chinese economy is facing enormous pains right now. There are all kinds of problems from inflation to the world’s largest housing bubble. The gov’t is tightening on all kinds of things and they people getting money out are in a hurry for a reason.

Meanwhile (credit for a change to the Cons) the Canadian gov’t has tightened up the immigration investment program.

Most of the Asian money is coming from locals which Garth points out in his blog. They do have finite resources.

#131 Timing is Everything on 07.06.11 at 12:58 pm

Stunned….If you’re gonna sell…

Step 1. Get wife ‘on-board’ with the plan.

If you can’t manage Step 1…forget about it.

You do not have a financial question. You have a marital question….-> How can I convince my wife to sell our house and move?

Solve that and no more dilemma.

—————————————————–

It’s never too late to make a better decision.

#132 Mr. Plow on 07.06.11 at 1:01 pm

#123 I live in Edmonton

Not sure if you are making this crap up or what, but I too live in Edmonton and I do not share the same views as you.

-Sales have increased fairly steadily each month. See the link that Edmonton Guy (probably you) provided.

-80,000 ppl below the poverty line would be 2 whole percentage pts below the national avg, assuming our city and area is over a million ppl. You said 25% of the population, but I have a very small inkling that there are more than $320,000 ppl in Edmonton.

-Name one building in Edm that has foreclosed this year.

Nice try making stuff up. Go back on holidays Squid.

#133 betamax on 07.06.11 at 1:11 pm

#113 clem: “in my experience stupid people rarely make a lot of money”

Stupid people make money in a bubble — they just don’t get to keep it afterward.

#134 Mr. Plow on 07.06.11 at 1:17 pm

#80 Brad

If you have been preaching it for four years, I guess the last four years have proven you to be stupid. Had you bought 4 years ago, you could sell now pocket the dough and buy back in later.

But I am guessing you probably already know that, hence you cheering on a 50% crash so you can be proven “right”.

#135 Chaos on 07.06.11 at 1:20 pm

Thanks Vlad, just what I needed….

one more thing to think about.

#136 Don Campbell on 07.06.11 at 1:21 pm

#37 squidly77

Stop obsessing about me. No I will not send you the pictures you have requested. No I will not meet you in Banff for a “guys” weekend.

Enough. I am trying to live my life and you are forcing me to consider contacting the police.

Go back to obsessing about Bob Truman, I need some space.

#137 Kitchener1 on 07.06.11 at 1:31 pm

Blog dogs, here is a novel idea.

Give Canadians the following option in a poll.

How many of would take the following option-
report to jail for 5 years- minimum security type prison and in the end of those 5 years you will be given 2 million dollars tax free. Thats 400k every year you are in jail tax free, but you have to give up 5 years.

or report to jail for one year and get 400k tax free at the end of that year. or you pick 1-2-3-4-5 years and every year you get 400k

for the one year option, it would be $1095 a day every day for 400k at the end of the year.

How many Canadians do you think would take that option, probely above 50% of the population.

blog dogs what are your thoughts?

#138 Steven Rowlandson on 07.06.11 at 1:35 pm

Garth if I have ever said Canada is a rich mans club its a pretty good bet that I was telling the truth or at least believed that I was.
Guess what? If you are not rich your not in the club.
Sounds like some thing George Carlin might have said.

#139 Linda on 07.06.11 at 1:50 pm

Just sell, take the money and buy a lovely waterfront property out east where people are still friendly and the quality of life is still good. Most of the good folk from the region would give their eye teeth to move back, but they’re all busting their butts elsewhere to pay the bills. You have a one-in-a-lifetime opportunity to get off the hamster wheel and really LIVE. Take it!

#140 Another Albertan on 07.06.11 at 2:10 pm

Mikey the Realtor said: “Expect another $250k+ appreciation before year end.” in #90.

Now, I’m not picking on Mikey specifically, but these are the semi-specific to wholly-specific financial prognostications and promises that get the investment industry in HEAPS of trouble.

My serious question to Garth is “when is Melanie Aitken going to take the real estate boards to task over the myriad of statements in the same vein?”

I ultimately work for a hedge fund. I understand what is a “qualified investor”. If a mutual fund salesman made similar “promises”, there’d be hell to pay, even if the call turned out in hindsight to be correct.

Everyone else’s mileage may vary.

#141 BC Bring Cash on 07.06.11 at 2:14 pm

Here is a list of the 10 most affordable housing markets in the US. For example how about this pad in Niagara Falls NY just across the border for 60,000 big US Federal Reserve Notes. ($60,000)
http://www.marketwatch.com/story/the-10-most-affordable-us-home-markets-2011-06-15?pagenumber=1

#142 jess on 07.06.11 at 2:52 pm

it’s a no brainer
================
Motorcyclist Dies of Head Injury While Protesting Helmet Law

#143 RomanQB on 07.06.11 at 2:54 pm

Garth,
I’m bored! Where are your hot chick pics these days?

#144 disciple on 07.06.11 at 3:12 pm

I can’t imagine myself retiring and then waiting for death while doing nothing but stare at beaches, waterfronts or beautiful landscapes. I’ve already done that in my youth and there’s got to be more than that to look forward to. I’ve got to be always building or creating something until my last gasp, I think.

Unfortunately, I guess that’s the vision being sold to the great multitudes of indentured servants across the land. Pay your obedient service credits to the Machine now and you’ll be rewarded with seventy virgins later on. What good will it be without ol’ Woody, though?

#145 "Dah" Rothschilds and Goldman Sachs on 07.06.11 at 3:16 pm

Tell Stunned that its too late…..the wheels are set in motion……and his RE value will collapse to below what he paid.

Bwhahahahahahahaah ahahahahahahha

PS Hey rest of you wanna go for a pint and ROTFLM UBER-RICH A O… (cash bar ).

#146 Coho on 07.06.11 at 3:33 pm

People are programmed to not take a profit. This is what keeps the system going…the system where money flows from the masses to the few. The majority lose so the minority can thrive.

So, people don’t take profits thinking that if they do, the multitudes which remain in the asset will all become millionaires and they’ll be on the sidelines watching…priced out forever. Well, it doesn’t work that way, that is why most people never get ahead.

The odds of a middle class couple (and young to boot) selling an overpriced house and banking a couple mil in profits, getting beat out financially by the hoards hanging on to their houses is absurd. What…is everybody going to be multi-millionaires in a crony capitalist system? Dream on. The game is to strip people of their wealth as to keep an economy on life support going. It is not designed to make every Tom Dick and Jane millionaires.

Without the illusion of wealth built into framing and drywall, people wouldn’t spend and no spending means no economy…and less jobs for the Chinese.

#147 Herb on 07.06.11 at 4:03 pm

Wife drew my attention to this little gem: there are 300,000 Canadian “expats” living in Hong Kong –

http://money.ca.msn.com/savings-debt/gallery/gallery.aspx?cp-documentid=29354160&page=9

With that Canadian satellite population in Asia, I am forced to change my mind: regardless of what happens to the RE bubble in Canada, it will be different in Vancouver.

#148 jimsum on 07.06.11 at 4:18 pm

He won’t sell because the money isn’t real to him. Why didn’t he sell when his potential profit was $1,000,000? Why not at $500,000?

It took me 12 years to pay off a $100,000 mortgage, and my salary was better than the Canadian average during that time. If the Jedi dude were sensible, he never would have committed to paying for a $700,000 house. If paying for a $700,000 house doesn’t seem like a big deal, then a $2,000,000 profit is no big deal either; people in Vancouver are too rich to worry about such piddling amounts.

At some point, money and debt will seem real again; but I bet the Jedi dude is more likely to see the reality of working endless hours to pay off his huge mortgage than the reality of having enough money in the bank to retire tomorrow.

#149 Koolaid Drinker on 07.06.11 at 4:37 pm

What??? $2M profit tax free?? That’s a no brainer, I would sell and move to Yukon and live in an igloo for a few years if I have to. There are always other cities with cheaper houses.

#150 jess on 07.06.11 at 4:42 pm

Did i read that right? Could someone explain this too me the latest ruling by Clarence Thomas

Even though i am jess captial management and produced the false prospectuses, the court will find that they were filed by a separate legal entity the jess investment fund. and even though the jess investment fund is run by jess capital management ,jess capital management is not on the hook for the “material that misleads investors?

It pays to have “two faces”

Janus Capital Group, Inc. v. First Derivative Traders

For purposes of Rule 10b–5, the maker of a statement is the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it. Without control, a person or entity can merely suggest what to say, not “make” a statement in its own right. One who prepares or publishes a statement on behalf of another is not its maker. And in the ordinary case, attribution within a statement or implicit from surrounding circumstances is strong evidence that a statement was made by—and only by—the party to whom it is attributed. This rule might best be exemplified by the relationship between a speechwriter and a speaker. Even when a speechwriter drafts a speech, the content is entirely within the control of the person who delivers it. And it is the speaker who takes credit—or blame—for what is ultimately said.

“Rule 10b-5: Employment of Manipulative and Deceptive Practices”:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.”

#151 The InvestorsFriend on 07.06.11 at 4:54 pm

FORMULA FOR ALL CANADIANS TO GET RICH

It’s simple. We keep selling our houses to each other at ever higher prices. When the market price paid for those very few houses that sell each month goes up, we can all mentally mark-to-market upwards the value of our own house, even though we did not sell or have any intention to sell.

We all feel recher as our house value goes up. And, if we want to, the bank will allow us to borrow the increased equity in our house and buy investments or a speedboat or what have you.

This sytem works great. The Americans had it working to great effect in the mid 2000’s. That worked okay, right?

It is all so very simple. Just keep bidding up those house prices and we can all be rich! If that don’t work, maybe we can try it with tulip bulbs or signed hockey pucks…

History does not repeat???

#152 Ken5421 on 07.06.11 at 5:01 pm

Hi garth. on most blogs there is an email icon at the base of each article that you can click. You can then send article as a link to whoever you want via email. You should add it. cheers Ken

Good idea. But already done. The email icon is at the top of the blog posting, plus there is another link “Email this blog to a friend”, also at the top of each post. — Garth

#153 Ben on 07.06.11 at 5:08 pm

#140 Linda on 07.06.11 at 1:50 pm

But if you jump off the hampster wheel you will die. It’s the same as the 35 years in guy retiring and dies within 6 months.

#154 clem on 07.06.11 at 5:15 pm

#134 betamax on 07.06.11 at 1:11 pm
#113 clem: “in my experience stupid people rarely make a lot of money”

Stupid people make money in a bubble — they just don’t get to keep it afterward.
________
and really stupid people lose money in a bubble. maybe stunned should take out a heloc and invest it.
but i’m sure he knows what he’s doing, he like a jedi knight for making such a great call in re.

#155 Mr Buyer on 07.06.11 at 6:15 pm

#134 betamax…I have worked for very stupid rich people, in fact my limited exposure to rich people has left me wondering just how elite are our financial elite(and just what value are they to Canadians or anyone else other than themselves).

#156 Junius on 07.06.11 at 6:31 pm

#151 Jess,

The Janus case is a legal abomination. It is one of the worst US legal decisions of all time.

Explanation. Thomas is an idiot and the rest of the Conservative court – particularly Scalia – are as well. They either have no idea or don’t care what they are doing.

#157 From kits on 07.06.11 at 6:55 pm

Asians? Dream on. Even a study done recently by a local real estate developer found the vast majority of ‘Asian’ condo buyers, for example

Gezzzz Garth have you turned on us or are you just running out of good information?

Trying to use quotes from the real estate industry themselves..I thought you were better than that!

Jokes

Cough up some data. You will get equal time. — Garth

#158 Insurance Broker on 07.06.11 at 7:19 pm

This whole thing is going to tumble the same way it did here in california.

In the end, the taxpayers end up footing the bill.

#159 Nostradamus Le Mad Vlad on 07.06.11 at 7:26 pm


#136 Chaos — In the KDC today, article said that cherries will be nice, plump and sweet.

As well, a neighbor just up the road told me yesterday in a month or less, he will be doling out free apricots and peaches (we supply the ice cream!).

If you ever stop by, let me know and mebbe you can join in!

Ummmm, do I hear the hum of a/c’s? Yes! We have GW contact!
*
America’s controlled economic implosion (two videos as well); Evil version of Basil Fawlty? Obama and Geithner have done more in a shorter period of time to wreck the US economy, so possibly this — US (probably Canada too) being sold off in bits and pieces; US Stock Markets over valued 48-61% (charts); Guilty Pleas in fixing foreclosure auction bids.

BS Bluster In case you didn’t know, govts. are supposed to lie, like politicians; Silver is better than gold (no tungsten), but hold the gold thru summer; 24:27 clip Gold fever in SAmerica; US$ = Oblivion As soon as QE3 begins; 5:59 clip Want a AAA Rating? Buy one at Moody’s!

Like A Hurricane, and it’s about to hit here as well; 7:37 clip First, the French Revolution. Now, Europe’s Revolution; Reagan still alive? Win one for the gipper! Kauai Station Increase in radiation from Fukushima, and Charts. Also, blaze in nuke plant in Tokai and Anonymous claims to have the Stuxnet virus for nuke plants; Hacker Attacks Are govts. hacking, in order to bring in new laws? 9:05 clip Google, Yahoo and Facebook are hiding things (I don’t them anyway).

1:23 clip Hillary Clinton admits US Govt. invented The Toilet (al-Qaeda); 8:05 clip Minnesota shutdown may spread across country.

#160 stunned is, well, "stunned" on 07.06.11 at 7:32 pm

man what a problem. To cash in for $2M now and never worry about things any more, or hang in there for some more unearned coin?

Reminds me of the blogger a while ago who was sick about the profits she “left on the table”.

Seems like the overwhelming advice is to sell asap and laugh all the way to the bank. I agree with that.

What’s going to be a much tougher decision for our poor, advice-seeking Jedi millionaire, is when to cut and run after he hangs in there hoping for a few hundred more thousand but the market turns on him…..hm should he bail and pocket $1.8M? $1.6M? $900K?

IIRC there were tons of folks who hung on to Nortel til it was down to a buck or two…..

This should get interesting.

No way, no how, should anyone get to pocket a lifetime of earnings for living in a house for 5 years. That is total BS and obviously unsustainable.

I hope the Jedi Knight has a brain cramp and wakes up when his house is back to $700K.

This is so far beyond stupid that it’s stupid.

#161 Hoof - Hearted on 07.06.11 at 7:33 pm

I don’t care re: RETARDS that ” got lucky ”

………..and may make a potential $2 million + in “capital gains free ” profit…and YET are too F*cking cheap to pay for advice……yet seek Sir Garth’s ESQ. ( future O of C ) advice ……….and that of his certifiable MENSA co- bloggers.

…..cheap basturdos…….

They should trade their reptilian shape -shifting mode for Federal NDP/LIEberal candidacy…..it is the right/reicht thing to do

dammit !!!!!!!!!!!

#162 Utopia on 07.06.11 at 7:59 pm

I have been telling people all day about housing price increases in Van’s West Side going up by so much. The story goes like this. I say “Did you hear prices rose in Vancouver’s West side by 147,000.

They look up, nodding no….

Then I leave it hanging for just a fraction of a moment. Right before they respond I add the kicker. “In one week”. And then their jaws drop. Stunned looks. They doubt me. Start shaking their heads. It is just too much money so it can’t be true.

I point them to this blog. They are sincerely shocked.

And this is where greed has taken us. The end is literally now in sight and yet so few can see it. What will it be next week? Another 147,000 or maybe even more?

That is how we know this bubble is close to bursting. I believe we have finally arrived at the mania stage in Vancouver and only tears and regret can follow now. I honestly feel resentful of what that greed and those loopy buyers have done to our country because I know the outcome of all of this.

It is never good.

There is very little likelihood of greater price appreciation anywhere else once the bubble officially bursts. It will be headline news coast to coast and buyers will just evaporate as they survey the carnage wrought by one single obsessed city and it’s foolish residents. How many will still pony up cash in their own towns once they know that prices are starting to fall?

In truth, there are greater fools to be found all the way to the bottom but the kind of reckoning that is coming will give pause where before only HGTV could slow them down because the home show was on. Vancouver’s bubble is just so big that it is guaranteed to be a confidence killer.

Most will soon be thinking twice.

#163 BrianT on 07.06.11 at 8:10 pm

#154Ben-The classic Boeing study concluded that if you are going to stay on the hamster wheel until 65 you had better not step off-OTOH those that exited at 50 did very well (longevity wise) http://www.extremeskins.com/archive/index.php/t-74282.html

#164 TurnerNation on 07.06.11 at 8:41 pm

The Globe and Mail reports in its Wednesday, July 6, edition that Portland Investment Counsel chief investment officer Randy LeClair recommends buying Groupe Aeroplan 6.50 per cent, Series 1 preferred shares, which now trade at $26. Franklin Cameron writes in The Globe’s BNN Market Call column that Mr. LeClair says: “The acquisition of Carlson Marketing in 2009 should enhance their position. Cash flow generation has been on target and stable. The preferred shares pay a 6.50-per-cent dividend on the original $25 issue price. This is a rate-reset type of preferred share that will most likely be ‘called’ by the company in March, 2015.” In his general outlook Mr. LeClair says: “With the economy still not quite up to speed and achieving sub-par growth, we expect interest rates to be in a holding pattern over the next 12 months. … With corporate profits expected to improve, corporate interest payments and dividends will be protected.” Groupe Aeroplan shares shed six cents to finish Tuesday on the Toronto Stock Exchange at $13.50. The stock has a one-year range of $8.67 to $14.14.

© 2011 Canjex Publishing Ltd.

#165 Imstupid on 07.06.11 at 8:47 pm

#162 Utopia

I read your comment and must say, it was brilliant. I am impressed by your points and the wording. You deserve praise for your writing style. Thank you

#166 Hoof - Hearted on 07.06.11 at 9:02 pm

Vancouver …

… W-E-S-T side..

……. is a marketing label….

The Bilderberg/ Illuminati/ Incubi could have just as easily stated that DTES was the ” Beverly Hills” of COV.

Truth be Gnome(…err… known….)” Mount Pleasant” area of COV was once the elite area…till Shaughnessy was opened up by CPR.

Mount Pleasant is NOW considered “East Side”…..lower class …yet ripe for gentrification.

So…WTF?????

If we are referring to UBC”….Arbutus…..Kerrisdale….blah- blah- blah………they were originally “Post WWII” …..working class enclaves.

By default . ….” East -Van versus West- Side” …..is simply an evolution of immigrant groups.

The Brits…as per usual…de-facto…… defined EAST of Cambie as for the Displaced Person…”DP’s”………and West of Cambie as ” tut-tut ….for Herr -Majestic’s teabaggers”….. with LOW melanonin content…aka paleface enclaves.

What is “For -inquiring -minds”,……….. is the FACT that South – East Vancouver was a “ghetto” for Euro -immigrants…..but, ………..in the last 30+ years…………is now a South Asian enclave .

A well known German deli/bakery is owned /run by South Asians…and MORE power to them !!!!!

C’est La Vie !?!?!

Thus…the so-called “fact” about West Side of COV as ” Highest and Best value” is a combination of marketing and racism at its c-e-s-s-p-o-o-l best.

Thus…

If you ((E-W-E?) consider a Caucasian enclave….. near a” INZ……t-a-TOOT” ……of higher yearning……….. within a poli-geographical proximity to a NUDE (Wreck )beach as worthy of a 50% premium for RE…

GO- 4- IT= GOPHER-IT= GOPHER-SHITE

( DumbKopf’s )

#167 TurnerNation on 07.06.11 at 9:45 pm

Vancouverites are feral! Look at the their hockey riots.

#168 Utopia on 07.06.11 at 9:52 pm

#165 Imstupid

Hey, thanks man.
——————————————–

To Hoof-Hearted: What is happening to you? I have often appreciated your writing but your posts have gone crazy lately.

#164 TurnerNation: Good work on the dividend stories. They really appeal to me and the Globe is doing a great job of bringing us the goods. There is a whole new focus on this area of investing that I find really encouraging. I remain certain that equity markets will see strength through to US elections as investment shifts from commodities to stocks again. Many continue to call for a major market sell-off (and even I did too recently) but there is no logic for that outcome other than the sentiment of some. What is little appreciated is the amount of investment demand that exists for yield of any sort. They will find it in numbers and volume and September should be a quite a good month. This, despite the threats of a renewed recession. Markets do not need to be rational though. If they were we would have crashed hard already. A fresh shift is underway and it is bullish for the trade in my opinion. I just feel certain of that now.

I will hazard to add though that the commodity heavy TSX should start a downward leg right about now. We will see.

#169 Vancouver Shocks on 07.06.11 at 11:52 pm

For people looking to but in Lower Mainland, keep in mind, all these bloggers are referring to the ludicrous prices in vancouver.

Where has the fraser valley real estate gone since the downturn in 2008? abbotsford is – 10% and many other areas in langely, and maple ridge are at price levels seen in 2008 or lower.

Buying land appreciates, buying a small lot with a new house depretiates, stay away from stratas, anyone can get a good deal in the lowermainland with the right buy, and if its your principal residance for the long term, your ahead of renting. also add in the wife emotional benefit of actually owning your own home and you will be getting it twice as much. haha, is that not worth paying a mortgage?

Looking forward to a price correction in Vancouver back to norms of 2010 with the rest of the market!

#170 AG Sage on 07.07.11 at 3:51 am

Yeah, selling your apparently winning lottery ticket house to a greater fool does smack of being too good to be true. But the money in your bank account will be real enough. You can then retire somewhere reasonable (aka 3/4 of the planet’s habitable surface) and do whatever the heck you want.

The kids will make new friends.

#171 Beach Girl on 07.07.11 at 4:02 am

Just curious again. If house prices are going up so fast in Vancouver. How do they handle the house tax issue. Had to pay my installments today. Also, when this goes down, where will the granite counter installers go. I cannot for the life of me understand stainles steel appliances, like I would want to devote my life to polishing a refrigerator? Also McMansions north of TO. A big box in an old cow field, watching your neighbours massive SUVs and annoying children. Thank God no one wants to mate with my 2 idiot sons. Grandma is not home. No boomerangs here.

#172 AG Sage on 07.07.11 at 4:08 am

>#63 Joseph [original] on 07.05.11 at 11:55 pm
>What we’re talking about here is price appreciation at $147K per month. This steep upward price appreciation doesn’t just snap back $300K a month later.

It doesn’t, but a greedy seller trapped in a decline who can’t set a drastic undercutting price relative to his neighbors’ will chase the market all the way to the bottom, without a sale.

#173 Rifles on 07.07.11 at 6:49 am

If you’re worried about missing the move from an assessed value of $1.7m to $2m why not just ask for $2m, or even $2.3m? If you ask for it, they will come. maybe even start a bidding war. Phasers on stun.

#174 TurnerNation on 07.07.11 at 7:33 am

#168 Utopia on 07.06.11 at 9:52 pm

It appears that the Dow could continue its currently parabolic rise, up to 13500-14000 level. Never underestimate manias!

I read the weekend edition of the US Investors Business Daily newspaper for their market analysis. Many US companies, especially their top 50 or 100 list, are immensely profitable. Corporate profits are up up up across the board.

(The tough part of this newspaper is reading their rabid editorial section which is pro-war, pro-israel, anti-arab, and anti- everything else. It’s no wonder, as wars turn millionaires into billionaires).

#175 disciple on 07.07.11 at 12:48 pm

#174…TurnerNation….

I suspect that the profitability of the trans-national “US” companies has more to do with an inflated currency and also expansion into the emerging markets. For example, General Motors is using profits in Asia to keep its operations in the US afloat.

The Western market for a very long time has been the consumer base for the eastern manufacturing sector, but even that has largely changed as the East has become BOTH producer and consumer, soon to eliminate the West altogether in the business cycle. I don’t see anything but more profits for the Western multinational conglomerates, and more austerity for the working class serfs who are becoming more and more of an obstacle to their expansion eastward.

#176 steve p on 07.07.11 at 4:43 pm

That you’ll lose social status?

dont tell anybody you sold at the top bcause you will be rich. the neighbours will hate you.

#177 Behavioral Finance on 07.07.11 at 5:49 pm

Matthews Korea Fund flying. Even Vancouver real estate cannot match these gains.

http://www.reuters.com/article/2011/07/07/korea-olympics-economy-idUSL3E7I70IZ20110707