Big plans

Tara was 16 when she hooked up with Rick nine years ago. He was nineteen, wanted to be a long-haul trucker. Good thing they were in love. No money. Just dreams. For four years they lived in the back of a pickup, then in a van, then a 1972 20-foot holiday trailer with no furnace through a central Alberta winter, and then a walk-in closet of a mansion being renovated. “We did this because at that time it cost $900 for run down 4-plex, and with our dog it was almost impossible to find a place to rent, especially at our age,” she says.

Rick was 23 when he got his Class A, and they started hauling together. Their income went from $20,000 to $76,000. “Like most young people our age we yearned for a house and place to call our own.” Tara told me.

Their search for a home began. Five years later, after watching real estate values soar faster than a trucker’s pay, being unwilling to choke down the debt load others gleefully swallow, feeling misled and victimized by lenders, and too independent from the open road to trade freedom for a mortgage, it’s ended badly. Or has it?

Tara’s story is below, in her own steady hand. I thought all the chi-chi financial geniuses, equity traders, property experts, retired CEOs, metalheads and pissy young sharks who come to this pathetic blog might learn something from her. Resilience, perhaps. Confidence and perspective. Loyalty.

First, a further word on where we’re headed.

As Greece goes toast, European banks sweat and Barack Obama prepares to inflame his political rivals with a tax on the rich, there’s no good reason to think things will get better soon. Canada’s economy needs increased trade to maintain the status quo, and in this world, that’s not on. We’re likely in a recession now and while another 2008 is not in the cards, this is the long, slow melt period I’ve been writing about for two years.

It’s an anathema for real estate. Housing markets advance only if consumers feel confident enough to shell out big sums to buy homes. That happens when jobs are plentiful, incomes are rising, property values are falling, affordability is improving or interest rates are declining. None of those factors exist. This market is doomed.

As I wrote last week, this is effectively and consistently masked by the housing industry.  Trailing statistics paint a picture of rising sales and prices, and pay no heed to current and developing conditions. One of those changing factors – in the midst of a rapidly slowing economy and falling demand – is a mushrooming of houses on the market. In the GTA, for example, listings have jumped 14% over year-ago levels. In some areas of the mega-region, sellers are perplexed as open houses are empty and showings non-existent. It’s not what the media told them.

In Vancouver, ground zero for the correction-in-waiting, the trends are not positive.

The west side is cracking with increased inventory and big sales decreases. Ditto for Burnaby, while the condo market is softer than Bob Dechert’s morals. Overall, sales in September will be lower than last year, I am told, which was one of the worst Septembers on record. If there were to be a credit crunch or a financial shock, this would be 2008 all over again in VanCity as listings swell and sales atrophy.

An experienced realtor who wants truth told, sends this message: “I think the gov’t and the markets are now out of ammunition. Rates are already low,  ownership percentages are now at record highs,  boomers are starting to really sell, there is no demographic out there with the $$$$ to “take-out” the boomers.   How can we possibly start to move the trend the other way?  We will get some China money for sure but the amount is not really enough to move an entire market.  Now that the top of the market is the one that is showing the most weakness, will that trickle down? We’ll see.  Then, when price decreases make the press, it self-perpetuates.”

The smart money is scurrying down the gangplank and anchor ropes.

Now back to Tara.

You might be tempted to call her a victim. Or a waif.  That would be arrogant. And wrong.

“So in 2006, after receiving 3 pay stubs along with our FICO Score, we went to CIBC bank in Red Deer, to find out our mortgage approval limit. We were approved for approximately $280,000, which got us extremely excited considering the places we had been living in. At that point, we naively thought that the current 4.99% interest rate meant over the entire 25 year term. This seemed completely appealing, as we worked out how fast, with our new income, we could pay off a mortgage. We figured 5 years and we would be free and clear. Straight away we consulted the first Realtor. She told us houses were selling like hot cakes and that it was the perfect time to buy because in winter house prices drop. She also said buy now as interest rates will never be lower.

We got to work during our short Christmas vacation searching for our dream home with nice appliances and new carpets. Much to our dismay, it appeared our dream home would have to be a $279,000 duplex, or an old condo with fees, that we found out did not allow pets. We now had 2 large breed dogs. We thought the search was over until we found a company that built cheaper homes to suit in a nearby town. For $235,000 we would have a home design and floor plan of our choice.

Holidays had come to an end, and we were now back on the highway just leaving Red Deer. We had lined up a mortgage broker, who also said that mortgage rates would never be this low again. CIBC had told us that we could even borrow the 5% downpayment of about $13,000 in a separate loan. And the home builders were faxing the blueprints to those who required them. All we had to do was confirm the deal.

Somehow though, we remained skeptical, and felt that something must be too good to be true. I began crunching numbers to determine exactly when we would be paid off and how much interest there would be in the end. And it became apparent that the interest was actually 5% a year! After working out the total interest after a 25 year term we scrapped the idea all together. We couldn’t believe the bank was pressing us to consider a 35 year amortization except that it was in their best interest and not ours. We now realized the actual cost of the house, when all was said and done, was essential double the asking price equalling almost $500,000!

We were reluctant to give up our search, however, and were determined to find a more affordable mortgage. We searched most of Western Canada and even Eastern Canada. We figured since we long haul truck drivers, anywhere near a highway would suit us well. But we were hard pressed to move across the country just to find a home.

Places near our home in Southern BC were somewhat affordable at $175,000 to $250,000 but by the time we were looking they were selling before hitting the market. We settled to watch the market. All the while, we watched as bidding wars went on and houses steeply climbed higher and higher. Especially in our former province Alberta where friends of ours purchased for prices over $300,000 and as much as $425,000. Then, like a virus, we watched it take over our new province, British Columbia, by 2007. We had friends purchase a decent home for $425,000. Houses climbed so high in the end that we decided to avoid purchasing altogether until sanity returned to the market setting our price limit at $150,000. We have still not yet found the place we are looking for at the price we expect.

We had plans to save as much money as we could so that we could reduce as much mortgage costs as possible. But with life what it is, and being young, we had to pay off some debts, we had to acquire things we needed and didn’t need, and pay the day to day bills. We have yet to save the optimistic numbers we strived for.

We have since opted to live in a 30ft travel trailer with one slide out. We built an 8×8 addition attachment and installed a wood stove for our heat. We bought a temporary power pole to service our power needs. This of course ate through money to set up. In fact, this is my first place with running water and power since 1995 as I have lived off grid since that time. We pay $250 a month for lot rent, and about $20 a month for power which covers our shelter needs. We are working on saving money as best we can. Despite our low living costs it has been tough to save much money at all. And we cannot understand how anybody we know is affording their extravagant lifestyles. We have even forgone having children as of yet due to the market conditions.

We currently have about $5000 in savings that we hope to place in a balanced portfolio, very soon, in lieu of buying a house as an investment. We believe that we are being are being as prudent as possible, and we are constantly looking for ways to reduce costs further including selling some of our few assets. Although we are bitter about how the housing market has shaped over the past several years, we believe that one day we will be rewarded. Until then, we have accepted that most who meet us will feel sorry for us and assume that we are poor. We plan to buy land and build a house in the future, but it will be for shelter and not for profit. If all goes well, we hope to buy cash, perhaps in the next decade.

193 comments ↓

#1 Trex on 09.18.11 at 7:09 pm

Big tip of the hat to Tara and her hubby.
Wise beyond their years.

#2 squidly77 on 09.18.11 at 7:10 pm

Prices always revert back to there long time mean price. For Calgary that should be about $160,000. Less for Red Deer.

#3 Christine on 09.18.11 at 7:10 pm

Good for you Tara for not sucumbing to the pressure to buy. Your time will come!

#4 squidly77 on 09.18.11 at 7:12 pm

It will take some time to happen though but once prices begin to fall the waiting will be easy.

#5 Nostradamus Le Mad Vlad on 09.18.11 at 7:15 pm


From Garth — “Big plans. This market is doomed.”, from experienced realtor who wants truth told, sends this message: “I think the gov’t and the markets are now out of ammunition.” And below:

#145 timo — “Autumn could be the 3000lb gorilla in the corner . . .”, #156 miketheengineer — “. . . up to June 2011, the second half of 2011 has started with a sudden and major relapse of the crisis.” — and — #152 Waterloo Resident — “Its because its looking more and more like the stock market is about to nose-dive BIG TIME !”

G’day y’all. Already in autumn, but it’s still sunny and shiny here in LaaDeeDeeLaLaLand! Beginning to look a lot like everything which can happen at the same time, will.

Good post and links from all of you, and as I have been postulating for some time now (with Dad’s help, Nostradamus Jr.), TSHHTF, flying thick and sliming everyone who gets in it’s way, but plenty of boomers with young ‘uns are continuing to live lives based on perpetual debt.

Have they not heard of PIIGS, the UK, NAmerica or anyone else in the same boat? The stock markets could be way over-valued, and if they suddenly reset to much lower levels, it will pretty much drag everything else down.

Why debt is such a necessity is beyond me. Although it takes a lot of self-discipline and sacrifice to rid oneself of the anchor around their necks, no one has to “keep up with the Jones’s”, it’s their freedom of choice, and no one can deny them that right.

Just don’t expect grandfolks to come running up to them holding a silver spoon to shove down their gullets. Each person makes their own choices in life, good or bad, and they have to live with the consequences of those choices.

Good post on Tara and Rick. As long as they stay outta the debt trap, they will be okay.

#136 Dan in Victoria — Nice to see you back. Catch any fresh salmon, wrap in foil and bbq slowly for a few hours, along with other seafood? Send some here!

#6 GregW, Oakville on 09.18.11 at 7:22 pm

Hi Garth, Just a thought, if true. I got an email with this and found a link to try and keep it shorter.

With huge job losses in both Oshawa and Cobourg due to shutting down of call centres, every Canadian should give this their utmost consideration. Canada needs jobs!! Time to support OUR Country.

Cobourg is now losing its call centre with a loss of 130 jobs. Perhaps now is the time that we started to ask for a Customer Service Rep. from Canada. It is our right to do that and it is the law that they must provide one to us!

Most of us do not realize this option is open to us. I didn’t and most certainly will try it should the occasion occur.
A link to the rest; Calling 800 Numbers…
(Please incert Canada were it says USA)
http://pagosasprings.com/foreign-customer-service-representative-thanks-valerie-green/

#7 Moose on 09.18.11 at 7:28 pm

sad reality of how our “dreams” can enslave us.

#8 Onemorething on 09.18.11 at 7:34 pm

Interesting Story…circa 1930’s, 40’s, 50′ and may I submit 60’s when paying cash for homes or at least 50% down was the norm.

This mindset helped single income earners “EARN & SAVE” for both rainy days and big money down plays.

There was no emotion to rush in as house prices were gaining realistically each year. Best of all, there was no loose spending, no loose loans and banks were cashed up, not backed by government and were clearly not ready for high risk.

From 1970-2000 the government pushed by big banks and elite would set in play the biggest PONZI scheme ever.

We are now coming to end of this, maybe 5 more years of “slow melt” as G says but it will take 10 years+ to work out the damage done and if the rich dont start paying taxes we’re all in trouble as the middle class tax reliance will be non existent by 2020.

Put your thinking caps on people…consider the shape of things to come and get ready.

Blow off those expensive dinners, for fun go look around and see what rentals are going for?

Take profits from RE and let them ride on a liquid market where divendends can be used toward rent and the extra re-invested in YOU, not the PONZI’s decribed above.

As for Tara and hubby, rare breed, low income earners turned medium income earners with a strong track record of sacrifice and common sense.

As long as you are employable (stay employed) the day you hope for will come.

Garth, while after 2years of knowing this would happen eventually, those of us who read and comment on this “pathetic blog” are still here with you, why?

In support of you making your point!!!!

#9 calgaryillusion on 09.18.11 at 7:42 pm

Tara – you’re situation is completely normal. This story reminds me of my parents starting off in farming. No one should ever expect to having everything at age 25. You will relish everything that much more when you have saved the appropriate amount of cash for a home. Congratulations on not following the sheeple who are about to get fleeced (financially destroyed). Hopefully you can get a nice place from a foreclosure auction in a few years (Vegas houses are going for less than $100,000 in these types of auctions….and our time is coming).
Cheers!

#10 Moneta on 09.18.11 at 7:45 pm

tkid on 09.18.11 at 6:50 pm
People understood this concept a long time ago, that’s why there used to be debt jubilee every 50 years.

Now I understand you. Hey, I tell you what, I’ll vote to have the government give EVERYONE $5000
—————-
5000? Government should give everyone 200K (those with mortgage must pay off mortgage) and then we get another 20 years of what we got. LOL!

#11 TS Harpoon on 09.18.11 at 7:51 pm

Garth,

That was an excellent post.

I’d like to tell Tara and Rick that they deserve much credit for demonstrating fiscal restraint in times like these; it is my belief that Tara and Rick, if I may, uphold “true” Canadian values with respect to saving money, dedication to hard work and doing with less by living within their means.

That is the message you have been telling us over and over again Mr. Turner, and I know you are right.

These two deserve recognition for showing all Canadians how we should really handle our ‘desparate’ housing needs.

Thank you Tara and Rick. It is my wish for you both that one day soon you are indeed, rewarded.

#12 TaxHaven on 09.18.11 at 7:51 pm

How this couple, with an income of $76,000/yr. or more, failed to save any significant amount of money is a mystery to me.

If they’d just started socking away money in a bank account (let alone gold) a few years ago, they’d have the whole total necessary by now…

Anyway, with the soaring unemployment to come, this cute little scheme of “borrowing-with-no-cash-only-your-job-as-collateral” is about to end.

#13 45north on 09.18.11 at 7:54 pm

Rick was 23 when he got his Class A, and they started hauling together.

mighty fine story Garth, I pray to God that my children don’t buy a house

#14 Ret on 09.18.11 at 8:05 pm

This couple have the drive and determination to make it happen. The banksters and realtards haven’t sunk their dreams yet, as hard as they have tried to.

You are saving money. You have a place to live. Your relationship has survived some very trying times, and you have enough financial smarts to not run with the herd and get trapped.

You remind me of my wife (of 36 years) and I starting out in 1975. Many Blog Dogs will relate to your story I am sure.

#15 Tim on 09.18.11 at 8:06 pm

So far, despite everything that has happened with various economies as well as the constant gloom and doom predictions, prices in Vancouver are still ridiculously high.What is it going to take for a big correction? Armageddon?
As far as the Canadian economy is concerned, there are massive mining and oil and gas projects with projected labour shortfalls. Even with the state of the economy, oil prices are still almost $90 per barrel. Even if the emerging economies slow, they won’t collapse and there will likely still be a large demand for our resources. OK, the auto industry is toast, that just means will that people in Southern Ontario will have to actually complete high school and get post secondary education to get a job with decent benefits.

#16 TurnerNation on 09.18.11 at 8:10 pm

Today’s blog reads like a Jonny Cash song…

#17 Dark Man on 09.18.11 at 8:13 pm

I have mixed feelings about Tara’s story. It’s nice to see someone sticking to their ideals of what’s right or just, but foregoing or delaying having children because of housing market conditions is, in my opinion, too much to sacrifice. Enjoy life Tara, it goes by too fast. A home is a wonderful thing, especially when there are children in it. Most of us have to take on a mortgage to have a home, you will pay interest on it, but in time when you sell you will get some (or all if you’re lucky) of your money back. What you will never get back are the years of your life that went by while you were on hold.

#18 Waterloo Resident on 09.18.11 at 8:32 pm

Real Estate is “Sticky”, once prices reach a high point they don’t want to come back down.

That $500,000 house you have your eyes one will soon have bidding wars on it, and it will sell for $10 Million in about 6 years time, just wait and see.

#19 Blue Diamond on 09.18.11 at 8:33 pm

With all the congrats going around – remember they are long haul drivers. The holding off on buying probably had more to do of being away for such long periods of time that the taste of homeownership was a on again – off again appeal.

Long haul – why would you even consider owning – your constantly moving. The vast majority plant their roots and look for stability and comfort.

I noticed this afternoon while taking my wife for a sunday afternoon drive – 5 open houses within 5km of our home. So its finally come – and one final note. For all those who cheer that the housing market will destroy countless lives…guess who pays for the mass defaults…come on, guess!

Taxpayers – (are you still laughing?)

#20 Ex-Cowtown on 09.18.11 at 8:38 pm

Tara, great story. When my wife and I got together we had to sell our excess furniture to pay rent. We got through it and are doing fine now. A hard line way of looking at it is that you have a higher net worth than your friends with the big houses. They’re in huge trouble and they don’t even know it yet.

My advice is to build another addition. Your friends with the big houses and mortgages will need a place to stay in a year or so and you can rent it to them..

#21 Mr. Lahey Trailer Park Supervisor on 09.18.11 at 8:38 pm

Randy, another bright young person and her hubby have discovered the joys and financial savings of living in a trailer. Kudos to you Tara and welcome to the world of trailers!

#22 45north on 09.18.11 at 8:44 pm

Dark Man: foregoing or delaying having children because of housing market conditions is, in my opinion, too much to sacrifice. Enjoy life Tara, it goes by too fast

for the last 60 years you have been right, families have had children, bought houses and paid for them. A rising tide lifts all boats.

The tide is washing out to sea and with it, it will take the hope of a generation. Now is the time to keep your powder dry. Thousands and thousands of young families are going to get washed away. Tara and Rick are holding on as best they can. God bless them.

#23 not 1st on 09.18.11 at 8:51 pm

Sorry, I don’t take financial advice from someone in a story who can’t calculate simple interest. They are right where they deserve to be. $76k should easily service a mortgage of $250k and pay it down nice and fast too.

#24 nobodyspecial on 09.18.11 at 8:52 pm

I’ve learned alot from this blog, but maybe not enough. We are in our early 30’s and live in Sask, our income from a electronics tech, and Teachers aide is 60k per year. Not sure how we missed the average 80k per year mark, but we did. We are 8k in debt, have 10k savings and have property worth about 20-25k, 30 mins out of saskatoon that we can build on. We now rent a 2 bedroom for 1100 a month. I really hate the idea of mobile homes,but it looks like we can get into a decent older one for 35k, another 15k for a well, ceptic already in place aswell as gas. I have not looked into cost of moving and hookups and tearing down the old shack already on the lot.

I would like to hear some thoughts on it. Could this be a safe investment for us untill real estate prices come down ? There is lots mining in the area and I don’t think we will have much trouble renting it out when it’s time to move on.

Thx.

#25 phinny on 09.18.11 at 9:01 pm

Tara,

You definitely are telling our story. My wife and I both work in the Oil Patch- my wife is a scientist, and I’m on the Rigs. Like you guys, we can’t really ‘afford’ a place here in Edmonton. We rent happily, have a big garden and save our bucks to somehow buy a place to LIVE and RAISE OUR FAMILY, without making bankers and boomers rich.

We’ve sacrificed. We buy at thrift stores, forego the flat screen and have lived in some really, really dodgy places to save bucks. Our vacation is a train trip, once a year, back east. Our down payment grows, but housing prices grow faster. We drive a dented, crappy truck and our friends who make far less own far more. They are committed to big mortgages and big credit lines.

I feel your pain. I wait patiently for a correction, only because, in a way, I’m hoping that fairness and justice eventually comes about all of this greed. I would forgive the debt of the working man, at the expense of those who engineered this whole bubble.

But that wont ever happen.

#26 poco on 09.18.11 at 9:09 pm

#4–squidly77 on 09.18.11 at 7:12 pm
It will take some time to happen though but once prices begin to fall the waiting will be easy.
_______________________________________________

if you can’t see any decline yet, you’ll be catching it on the next upswing—pull your head out of the oil sands—prices in many areas have been falling for months as many of the posters here have been saying

#27 Nostradamus Le Mad Vlad on 09.18.11 at 9:13 pm


Thought For The Day

“Great spirits have always encountered opposition from mediocre minds. The mediocre mind is incapable of understanding the man who refuses to bow blindly to conventional prejudices and chooses instead to express his opinions courageously and honestly. ” — Albert Einstein (wrh.com)
*
Sept. 20 Greek default day? Inflation debates; Geithner “Translation: Wall Street, not Washington DC, runs the government.” wrh.com; Detroit 2,500 line up for 500 jobs; Soros says to prepare for an EU breakup. He should know, being one of the elite plus other links; Govt’s. joy French banks credit rating reduced; Middle Class Death Watch “Please remember; this destruction of the middle class is deliberate, on the part of corporations and politicians.” wrh.com.

Bondage Bubble Oooohhh, hurts so good! 10:55 clip “17 individual TARPs for 17 Euro countries…”. It used to be pleasant in Europe, now it’s ugly; 2:11 clip Economic hitmen, or how they justify taking another country’s resources and wealth; Mindblowing Wealth is becoming sucked into a vacuum of a few.

Few clips “Somebody needs to be held accountable…Rick Perry might know who those somebodies are.” (Gardasil); Turkey Heading the Arab world; Ron Paul “When the corporate media starts bashing Ron Paul supporters, it proves that the current political establishment is absolutely crapping-in-the-pants terrified of him! This is a good thing!” wrh.com, this and this; 1:28 clip Wall St. protests yesterday; CC is evolving.

NFL + FEMA The Odd Couple; SArabi – US “Read that again – VERY CAREFULLY. Yes, it said “key diplomatic relationship”. My spidey senses are tingling. What are they hiding?”; Libya It appears Gadaafi isn’t quite dead yet, despite NATO’s continual bombing raids, but it’s okay for Europe to give the all-clear to ravage another country? 3:39 clip US provoking China. Don’t antagonize the dragon; Dwarf Galaxies Where TPTB meet; Blair and Gadaafi Birds of a feather . . .; Oz + US “Although it carefully avoided in these statements by diplomats of both countries, China is the real target of this newly-minted Australian/US military cooperation.” wrh.com.

#28 Moneta on 09.18.11 at 9:15 pm

It’s nice to see someone sticking to their ideals of what’s right or just, but foregoing or delaying having children because of housing market conditions is, in my opinion, too much to sacrifice.
—————-
Until you get one with a disability.

#29 T.O. Bubble Boy on 09.18.11 at 9:15 pm

The market is turning in China also:
http://www.chinadaily.com.cn/cndy/2011-09/19/content_13729161.htm

Australia popped… Canada is popping… China is popping… any bubbles left?

#30 Smoking Man on 09.18.11 at 9:15 pm

Setting Boundaries. & Mind control

Why would someone spend a Million bucks on a crack shack in Vancouver.
Why are bubble heads made fun of by family members and friends who own property?
Controlling the actions (not the thoughts) of millions is simple, just defining the boundaries between normal, sane, and rational thinking on one side and abnormal, crazy, and conspiratorial thinking on the other side. It is still about branding, labels, mastering the basics: language, speech, socialization, perception, stigmatization.
Authority and education teach us you should strive to be different but within boundaries, hence if you are in the boundaries your not different. Paradox
A good example of this is if someone accuses another of being a 911 Truther instantly without debate we to conjure up an image of a sub human nut job. We get our cues from authority just like we did from our f-en teachers. Even if we studied the topic and looked at smoking gun WTC 7 most of us would easily agree that that building was wired and came down with controlled demolition but that would suggest fore knowledge hence an inside job. What do 1500 architects and engineers know anyway.
http://www.youtube.com/watch?v=lw-jzCfa4eQ&feature=player_embedded#!
Anyone know what this is Fe2O3 + 2AI
Cognitive dissonance
But we have been shown by our masters that anyone who expresses 911 truth opinion is called nuts, may lose there job and there is a social stigma and price to pay with that opinion. Charlie Sheen, Rose O’Donnell as examples.
See how easy it is, see how the peoples insane need to belong and fit it and avoid being labeled at all cost can so easily be used against them. It’s So easy…it’s sick…….
That’s why you have 10 x income real estate prices.
Garth must have went through hell when he started this pathetic blog (his words)
Many of his old colleges must have been bashing him, cause his logic and predications if realized would have a huge negative impact on the revenues from real estate ads. Must have lost a few buds……….with this blog

Looks like soon Garth will have the last laugh. That F-n Rebel……

But then again my tin foil hat radar is saying the Media, Carney and Harper will all get together in a dark room and form a plot to pump it up yet again…Damn conspiracy theorists.

#31 HouseBuster on 09.18.11 at 9:27 pm

“this is my first place with running water and power since 1995 as I have lived off grid since that time.”

Wow! These two could easily survive Armageddon and the days of Mad Max.

Buckle up folks. Wait until oil hits $300 within the next 10 years. It’s not going to be pretty.

#32 Stinky the Fish on 09.18.11 at 9:27 pm

Trailer park life is paradise, dear Tara. Just ask Bubbles and Ricky. Probably the best decision you could make.

#33 Devore on 09.18.11 at 9:44 pm

#17 Dark Man

I have mixed feelings about Tara’s story. It’s nice to see someone sticking to their ideals of what’s right or just, but foregoing or delaying having children because of housing market conditions is, in my opinion, too much to sacrifice. Enjoy life Tara, it goes by too fast.

Hey now, having children is a huge responsibility (or it should be). If they don’t feel they are ready for it, they are not ready. I am sure they will find other ways to enjoy life and find fulfillment than having kids.

#34 vyw on 09.18.11 at 9:54 pm

Greece will not default but rather just reissue the debt to the ECB if needed. The ECB is the Central Bank for the Euro and it can issue an unlimited amount. Greek debt is about $500 Billion Euros I think (150% of GDP). It would be a political decision to default not an economic one. My suggestion would be to buy up 1/2 the debt and warehouse it so Greece has a chance to turn things around. But unfortunately Merkel is too afraid.

Re Tara -she can buy a home in SW Ontario for $50 – 75 right now or step across the border ie. Niagara for $30 – $60 or if they want to be based in Las Vegas or a depressed market – a condo for $20K and up, a decent house for $50 and up, house with S/S and a pool for $100 and up. But they will also need to look at the spending – they should not be spending more than $2000 a month and the rest should be saved so cook at home, consume less alcohol and cigarettes, kill personal debts, save money.

Maybe Garth can offer a plan for people with less than 25K in cash savings.

#35 HouseBuster on 09.18.11 at 9:59 pm

“Even if we studied the topic and looked at smoking gun WTC 7 most of us would easily agree that that building was wired and came down with controlled demolition ”
———————————–
What are you smoking? There was no controlled demolition. Look at the design of the building. Maybe go to engineering school and figure out how it collapsed without a controlled demolition.

If you want some conspiracies look at Wall Street and Bay Street. You’ll find that everything is not what it appears.

#36 Phil on 09.18.11 at 10:01 pm

Congrats for not buying when you could of and as a result are now living in a trailer!!

#37 Young Old fart on 09.18.11 at 10:01 pm

#12TaxHaven on 09.18.11 at 7:51 pm
How this couple, with an income of $76,000/yr. or more, failed to save any significant amount of money is a mystery to me.
==================================

Whew, I am glad I am not the only one with that nagging thought…..

Shelter needs are $270 a month and since 2006 (or earlier) they only have 5k saved? Thats about 1k a year or less than 100 bucks a month….

I don’t want to judge but there is good money leaking out somewhere…… any vices?

#38 debtified on 09.18.11 at 10:05 pm

Sanity will soon prevail, Tara. We get closer to it every day.

The sad part is that we all pay for all the insanity that has occurred. That’s life. Living in a society has its cost.

It’ll be a long decline and you will be surrounded by mesirable friends who bought those $425K houses. Don’t forget to have fun. Life is not all about having a nice house.

#39 ruraldude on 09.18.11 at 10:12 pm

Although truth lives a wretched life, it outlives a lie every time.
Tara and Rick good luck in your endeavors and don’t despair.

#40 Mr. Lahey Trailer Park Supervisor on 09.18.11 at 10:26 pm

#32 Stinky the Fish Don’t leave out Julian!

#41 Grooby on 09.18.11 at 10:28 pm

… Not really related, but I find it interesting that so many people in the comments have indicated the Australian RE market has popped. That’s certainly not the impression in Melbourne or Sydney (though Queensland and Perth have taken a dive).

the Real Estate Institute of Victoria (REIV) is only indicating that it will be a ‘late spring’ sellers market. But there’s no more of a visible tipping point reached here than in Canada, from what I can see/read. It certainly hasn’t hit the mainstream as a consistent issue, and the appreciation that we’re in a bubble by the common people hasn’t hit.

If this is the sound of a popping bubble, I don’t think anyone heard it.

#42 Karlhungus on 09.18.11 at 10:30 pm

$76,000/year and they’ve only saved $5000? Meh, something doesnt add up. Especially when they only pay $250 in rent per month. Why would you buy when you are on the road all the time anyway?

I love the “I hate paying interest” line when they are essentially paying $250 a month instead of interest. Its the same thing.

#43 Snowboid on 09.18.11 at 10:35 pm

#18 Waterloo Resident on 09.18.11 at 8:32 pm

“That $500,000 house you have your eyes one will soon have bidding wars on it, and it will sell for $10 Million in about 6 years time, just wait and see.”

That is flat out hilarious!

Let’s for a minute assume you want that house in 2017 and have the $ 2,000,000 down payment.

The mortgage at 5% over 25 years is $ 544,000 a year. So if we figured on spending 30% of family income on the mortgage then that means $ 1.5 million income a year.

The average income from today would have to almost double every year for the six years.

Your suggested scenario would be more believable the other way around, the $ 10 million dollar house selling for $ 500,000 in six years!

Are you related to BPOE?

#44 cool on 09.18.11 at 10:37 pm

from Red Deer….

For last 5-6 weeks , very small number of houses with competitive prices are only selling.Listings has been steadily going up.

Winter/Spring will be interesting.

#45 from kits on 09.18.11 at 10:38 pm

maybe the 75k went to rye and cokes? too much time spent with bubbles and the gang :-)

#46 The thing in the basement on 09.18.11 at 10:40 pm

5 Mad Vlad – not autumn yet!

http://www.almanac.com/content/first-day-fall-autumnal-equinox

#47 BrianT on 09.18.11 at 10:40 pm

Ya gotta laugh-that MSM darling empty suit Mitt Romney 8% and that crazy nutbar (according to this blog) Ron Paul 45%-the Californians are not happy with their owners right now http://www.zerohedge.com/news/another-victory-ron-paul-who-wins-449-california-straw-poll-perrys-293-bachmanns-77

#48 Yul on 09.18.11 at 10:43 pm

Garth, love your blog. I fully agree with your outlook. Thought I would google the latest GTA numbers myself after reading that listings had mushroomed to 14%. The numbers don’t support demand fading however. Sales were up 24% over the same period. I believe the market is turning but these stats don’t support that. I am more interested to see how this fall turns out.

#49 Smell The Coffee on 09.18.11 at 10:45 pm

Every body these days in the Canadian middle class seem to be eating their own ‘seed corn.’

There is nothing left for a rainy day.

The overly negative comments regarding this couple’s 76K income and selected lifestyle is uniformed at the minimum and vicious at the worst. Shame on you and your self serving attitudes.

Long haul turckers have to pay for thier own rig which includes up-keep. Long haul truckers paid hours equals barely equal to a minimum wage rate, but if work at it for 4000 hours a year on the road (which invloves 24 hour work sven days a week for stretches at a time) these dollars slowly build. You get ahead because you live in your rig half the time.

Too many comments are self indulgent and shows an all too common cynicim about humble, but still noble and necessary work. This caustic attitude about others has entred the mainstream and is recently all too evident in this blog.

I congratulate this couple for their common sense, well managed life-skills and providing an exemplary generational model of delayed gratification. We could all learn something from this couple.

I respect them for focusing on the real values of living.

One day the negtative types will themsleves be dumpster-diving, having fallen from their over indebted perch. The worm wil have turned.

#50 jas on 09.18.11 at 10:49 pm

Folks:
throw some names of blue chip US stocks to trade on NYSE

#51 Ozy - Canadian Low Standards of Living on 09.18.11 at 11:04 pm

This story says it all about constant deteriorating of Canadian Standards of Living. This formerly proud country is failing majority of its citizens, and unfortunatelly only a left-party would restore balance. ‘Cause a new political party can’t make it to parliament, since you rejected multiple representation reform fellas if you remember 5-10 years ago (‘smart’ move by the way, typical Canadian?). It looks we are slipping in neo-colonionalism with “free markets” imposing lower and lower Standards of Living by the day.
Continue voting the scatman, scatman, scatman, alias the Ontario taxman, folks and I’ll see you not so later in bankrupcy happily ever after :)

#52 Led on 09.18.11 at 11:07 pm

maybe you should buy a modular home – they are real homes, just built in a factory. 75k-150k. a brand new house plus the land costs.

#53 Dark Man on 09.18.11 at 11:08 pm

45 North : People still have children and raise them in houses that have been paid for. This trend will continue I’m pretty sure.

Moneta : I don’t know how to respond to your comment so I won’t even try.

Devore: I’m assuming Tara wants children since she mentioned that they were holding off on having them until the housing market was better, and nobody ever feels 100% ready for children, you just have to take the plunge!

#54 Abitibi Doug on 09.18.11 at 11:11 pm

@Waterloo Resident, #18:
Just like those “sticky” in the United States recently, or like both Canada and the United States in the early 1990’s. A little closer to home (I live not far away from you in London) those “sticky” prices in St. Thomas or Windsor.

#55 bubu on 09.18.11 at 11:17 pm

Sorry guys but in my opinion… first as a truck driver here in Canada you are overpaid…. Second for your education, you should never afford to buy a house… You should afford a decent life only… Just comparing with other countries in the world…. This is why we have this mess in Canada because every janitor, truck driver and McDonald server is able to take a loan and buy a house… It’s not a right to own and many will find out….

#56 Utopia on 09.18.11 at 11:21 pm

It is time to protect your portfolio. Yes, it is urgent.

#57 nobodyspecial on 09.18.11 at 11:25 pm

“maybe you should buy a modular home – they are real homes, just built in a factory. 75k-150k. a brand new house plus the land costs.”

Looked into that, but it’s not really any more affordable then buying in the city once you figure 10k to move it, 40k for foundation, extra fuel expense, well, ect.

#58 nonplused on 09.18.11 at 11:29 pm

#2 squidly77

$160,000 average in Calgary? Mean reversion is pretty common, but the mean is an upward sloping line with inflation. See this chart:

http://www.chpc.biz/Major_Cities_Chart.htm

The Ottawa line probably represents where Calgary should be, so about $300,000 or a 25% correction. If it hits $160,000 I will buy all the houses I can, and leverage up the wazoo. Phoenix didn’t get hit that hard, in percentage terms.

#18 Waterloo Resident

A $500,000 house is going to $10,000,000 in six years? I assume that was sarcasm. I post some pretty outlandish predictions from time to time, but even I couldn’t go there. That would be clear hyperinflation, of the uncontrolled variety. We are in a controlled inflation, and the housing side of it is done.

Unless of course you think the average wage of a Canadian worker will be $3,000,000 in 6 years. I don’t know, I saw 3.5% this year.

Canada will not need a 20 to 1 devaluation to solve its debt problem, although Ontario might. Judging by oil prices, I think Canada devalues the dollar no more than 50% from here over the next 15 years, and the housing part is mostly already done.

Now, against the US dollar or the Euro, well that’s anyone’s guess. But I still think another 50% is about right there too. When oil is at $200 a barrel, gold at $4000, and milk at $10 per 4 litre jug, we are just about done for a while, if the wars are over at that point.

Garth,

I thought about sending you something for the McLean’s proposed article, even typed it out. Then I re-read it and realized, “You know what? Nobody is going to feel sorry for people who have any savings in today’s economy! Not only are we mostly living hand to mouth, but a large number of people have already eaten what the hand was supposed to provide for the next 10 years! (Personal debt levels in Canada.) It was then that I realised McLean’s was doing an “eat the rich” article. You should have no part. And by “rich” I think McLean’s means to eat everybody who has any money in the bank at all.

And for those of you out there who are in positive net wealth territory, even slightly like me, or have laid up provisions for a winter storm, or a generator (clear sign of extra money), or some gold or silver laying around, or even an extra jerry can of gasoline, HIDE IT ALL an ACT LIKE YOU HAVE NO MONEY! If the SHTF, the hungry people will be hitting the pantries of the people with BMW’s first. At first, they will probably just sneak into the kitchen, and make off with a few cans of Stag Chilli. They are just hungry. But eventually they will be more aggressive and looking to take anything that can be pawned. Especially after they have cleaned out your pantry.

As the last cycle meant borrowing to look as rich as your neighbour so you wife didn’t leave you for someone who would borrow more, this cycle will mean looking as poor as your neighbour so your wife doesn’t get shot, or worse. Make sure your wife understands that. Soon, wearing Pravda will mean you get to meet the Devil much sooner than you had planned.

#59 April on 09.18.11 at 11:30 pm

Yul – #49 – do your stats come from the real estate industry …………???

#60 Glenn on 09.18.11 at 11:38 pm

Too bad “hubby” is blissfully unaware that Tara has probably been shopping divorce lawyers for a few years already. Penny wise, pound foolish.

#61 penpal on 09.18.11 at 11:44 pm

# 42 Grooby

Sales volumes are down anywhere from 25% to 45% year over year across Australia.

Drops in volume presage drops in prices – classic market dynamics of a falling market.

Mortgage applications are the lowest since records started in 1977.

This presages a further weakness in volume, which reinforces falling prices.

Do you even read Aussie Roy’s postings? or any Australian news?

Google what’s happening and open your eyes and mind!

#62 gadzooks on 09.18.11 at 11:47 pm

Nothing wrong with living in a trailer. The big problem in this society is how fools get sucked in by advertising to ‘live’ the same cloned lifestyle as all the other fools. Staying on your own track is an admirable strength you have above a majority of sheeple. Don’t forget how truly miserable the average homeowner is and the fear they have to drink away every time they lay their heads down. Sure, you here the stories about how the odd one gets out with a profit, these are anomalistic, most are bent over and getting reamed.

Tara, you need a Hail Mary gamble , not a balanced portfolio. An ETF or managed fund will never pay off if all you’ve got is 5 grand. My pick for your 5 g’s is the ZJG on the TSX, gold juniors as a group will outperform all other sectors IMHO.This is better than trying to rifleshot a single stock and puts you into the big picture.

My next advice would be to begin to read everything you can about investing. Your 5g’s can be made into a million over time, mine did.

#63 Dan in Victoria on 09.18.11 at 11:56 pm

Vlad @ 5
Yeah back from fishing, great trip lots of fish and joking around. Good friends, good fun, great health, life is good.
Just helped a friend of mine put in a large foundation last week, geez thats hard work on blasted rock.
Glad I only do it for something to do now…..
Was over at his house this afternoon for whitetail roast, potatoes, beets from their garden and fresh blackberry pie.
Some wine and beer and good company.
Doesn’t get any better.
Ya never know wife and I were thinking of a road trip up your way may throw something fishy / smokey in the cooler for you if we go.

Hey Tara I lived for 5 years in an old 23 foot prowler trailer to save and get ahead.
Nothing like going outside to change a propane bottle at 2 in the morning in your undies ,standing in the snow to get the furnace back on.
You’re showing some critical thinking skills, good for you.
Think it all the way through be ready to adapt at any time.
It’ll work out for you.
Good Luck.

#64 penpal on 09.18.11 at 11:57 pm

@ # 44 Snowboid

I think that everyone on this blog has kind of tacitly agreed to ignore this poster’s comments.

I believe that Garth indicated that he is a RE agent, hence the delusion.

#65 Randis on 09.18.11 at 11:59 pm

@23 Not First:

I think you draw the conclusion too fast, without knowing their other financial circumstances. Bottom line, Tara and her partner didn’t feel comfortable with it and decided not to go for it, I think its fair enough.

Also I hope you understand that the money you spend comes to your pocket after tax … You almost sound like one of those bank sales puppet who would sit in a cubicle of a branch and “advise” people on the 32% GDSR and 40% TDSR crap on gross income …

Anyhow, I am tired. Good night.

#66 westopia on 09.19.11 at 12:02 am

@ #48 Brian T
Ron Paul wins California staw poll! C A L I F O R N I A! The “left” coast! Love it. There is hope for honest government and real money. Ron Paul 2012!

#67 Who Cares Mr Jones on 09.19.11 at 12:10 am

They get it
Debt=Slavery

#68 Devore on 09.19.11 at 12:10 am

#42 Grooby

If this is the sound of a popping bubble, I don’t think anyone heard it.

Don’t worry, the people most affected will be the last to find out.

#69 penpal on 09.19.11 at 12:10 am

@ # 50 Smell The Coffee

They have already eaten their “seed corn”.

Patience…. the market is most irrational just before the blade descends.

#70 neo on 09.19.11 at 12:16 am

#35HouseBuster on 09.18.11 at 9:59 pm
“Even if we studied the topic and looked at smoking gun WTC 7 most of us would easily agree that that building was wired and came down with controlled demolition ”
———————————–
What are you smoking? There was no controlled demolition. Look at the design of the building. Maybe go to engineering school and figure out how it collapsed without a controlled demolition.

If you want some conspiracies look at Wall Street and Bay Street. You’ll find that everything is not what it appears.

Housebuster,

The twin towers was one thing. But 10 years later I still have not been given a reasonable explanation for why a 47 storey building a few blocks away from the towers that was not hit by the towers or a plane would implode 8 hours after the first two towers and fall into itself in seconds into flat rubble when smaller towers around the twin towers had damage but still had parts of their structure standing. I don’t need to go all SEC documents forever being destroyed preventing future litagation conspiracy theory. I just need a reasonable physical explanation for the event itself.

#71 Bobby on 09.19.11 at 12:26 am

For #18 Waterloo Resident
Real estate prices are about as sticky as RIM shares. How low can they go, look out below.

#72 Timing is Everything on 09.19.11 at 12:31 am

“If all goes well, we hope to buy cash, perhaps in the next decade.”

OK.

#73 Nostradamus Le Mad Vlad on 09.19.11 at 12:36 am


#47 The thing in the basement — Oops, my bad — wrong planet and terrafirmasphere!
*
Market Volatility While markets ebb and flow, the WH steals taxpayers’ pensions; Spain and Obama are taxing the wealthy. Adios, wealthy! Hard Times getting harder; Rick Poverty and Texas Perry (chart further down); Prospective Employers Not exactly $100K / year jobs, but it’ll do; Casino banking vs. riots — which is worse?

Subprime Bubble in China, but this could be another piece of manufactured designed to white-wash China; Charming China with their own agenda for the EU; Got US$175 bln.? Good! Germany needs it; Gold and Hyperinflation A cure for insomnia.

3:08 clip Fukushima, worst in history; Murder Something is wrong when a person breaks into a home, is confronted by the owner and then the owner is charged with murder when he was protecting his property; m$m ignores Day of Rage. The paid-for and controlled m$m — what is it good for? Absolutely nothing; The Philosopher’s Stone Add a few vegetarian meatheads as well; Turkey refuses US help to mediate (not surprising); 4:40 clip Libya — still up and running.

Alaska volcano “A thermal anomaly was observed in satellite data over the past day, which is consistent with continued growth of the lava dome.”; 39:36 clip Brzezinski, Rockefeller, Soros (and others) = The Smart Grid; Money Talks Best Enemy money can buy; Links in Baby dwarf star being sucked in the sun’s gravitational pull (is there a boomerang effect?).

#74 Derek R on 09.19.11 at 1:28 am

#47 The thing in the basement on 09.18.11 at 10:40 pm wrote:
5 Mad Vlad – not autumn yet!
http://www.almanac.com/content/first-day-fall-autumnal-equinox

That’s not right. Look at it this way. There are four seasons in a year. Each season is three months. Midsummer Day is June 21st or thereabouts. So summer starts 1.5 months before then and finishes 1.5 months afterwards. Six and a half weeks in fact. So summer ends on August 6th more or less.

I’m prepared to compromise on September 1st as the beginning of autumn but September 21st is far too late. The trees are well on their way to losing their leaves by then.

So it’s definitely autumn now, no matter what the astronomers might think.

#75 Kilt on 09.19.11 at 1:37 am

Good for them. They have saved up $5000 in how many years.

They have the same income as myself, but I have an entire family to feed and can save $5000 in 3 months with just a few sacrifices.

If you can’t save money living in a trailer, how can you expect to afford a house.

Kilt.

#76 Rookie57 on 09.19.11 at 1:45 am

I look at Tara’s situation and think about her response regarding the 35 yr mortgage. You got to hand it to her, at least she looked at the cost. How many others take the time to consider the cost in this day of instant gratification. She thinks before she buys! Wonderful…

Tara, good luck in your search for a home. May the upcoming correction in Canadian RE reward you. I can “hear” it coming, so be ready.

#77 BigAl (Original) on 09.19.11 at 1:53 am

#30 Smoking Man…

What the hell happened to you man?!

Your post today, although not perfect, had some coherence, some ok sentence structure. What’s going on????

I sense no inebriated haze today. Something’s wrong!

#78 Hicksville Alberta on 09.19.11 at 2:30 am

In my small Alberta town of about 1,250 residents there are 32 houses for sale and usually no more than 4 or 5 sell per year.

There are quite a few under $100K and the extreme end is about $250K on the upside for a good liveable home.

Tara’s husband with a Class One license and a good driving record likely could very easily find a local oil patch trucking job paying up to $100K or more around here, all found.

This is in Southern Alberta, the Heart of ” Next Year Country” and she would be surrounded by a great local community of long time local residents.

I live here by choice.

You can keep your big cities as it seems the more “civilized” they become the more fundamentally barbaric they are.

#79 Waterloo Resident on 09.19.11 at 3:09 am

Yeah, that was funny about that comment about a $500,000 house eventually selling for $10 Million in 6 years time, but when we look at the insanity of the prices in Vancouver then EXACTLY the same type of thing has been going on with their prices, so maybe my sentence was not all that far off from reality anyways?

WORLD’S A CRAZY PLACE ISN’T IT ?

Here’s more crazy: RON PAUL is going to be the NEXT U.S. PRESIDENT, here’s the link;

http://www.cnn.com/2011/POLITICS/09/17/california.straw.poll/index.html?source=patrick.net&hpt=hp_t2

And why is it that the Federal Reserve is NOT ACCOUNTABLE to anyone? If the Fed wanted to give away $100 Trillion dollars to some bank in Switzerland there is NOTHING that the American Government can do to stop it ! Unbelievable but true ! Read about it here:

http://theeconomiccollapseblog.com/archives/unelected-unaccountable-unrepentant-the-federal-reserve-is-using-your-money-to-bail-out-european-commercial-banks-once-again

All I can say is “thank God we don’t have something like that here in Canada or we really would be screwed!”

#80 Aussie Roy on 09.19.11 at 3:15 am

Waterloo Resident on 09.18.11 at 8:32 pm

Real Estate is “Sticky”, once prices reach a high point they don’t want to come back down.

That $500,000 house you have your eyes one will soon have bidding wars on it, and it will sell for $10 Million in about 6 years time, just wait and see.

LOL, the funniest comment ever. Why not $20M, let me guess that would just be silly.

Aussie Update

Looks like our Kiwi cousins are having a bad time of it. Could this be what awaits many in Aus and Canada?.
SSSSH, dont tell the hedge funds but guess which countries banks holds most of NZ mortgages, sssh.

Thousands of Kiwi homeowners are trapped in their houses because of negative equity created by the property bubble bursting – and they’re being told they need to hold on for a while yet.

In 2007, it was estimated about 40 per cent of first-home buyers were taking out 100 per cent loans.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10752457

THEY are scattered across Melbourne – from family houses in the ‘burbs, to flash CBD apartments, to period homes near the bay – but these properties all have one thing in common.

In the struggle to make a sale, their asking prices have been slashed by up to 30 per cent – LOL now thats sticky.

http://www.theage.com.au/victoria/the-strange-cases-of-the-good-houses-that-just-wont-sell-20110917-1kfci.html#ixzz1YNcNiXlV

But, but, but we have a shortage of houses. Yeah right.

http://smh.domain.com.au/real-estate-news/sydney-housing-supply-in-dire-trouble-20110919-1kgod.html

Australians working beyond 65 because they have no money for retirement

http://www.news.com.au/money/superannuation/older-workers-cop-graveyard-shift-working-beyond-65-because-they-have-no-money-for-retirement/story-e6frfmdi-1226140428265#ixzz1YNd5nV64

No more money in pumping RE, I think I might start a cult.

Cult experts have warned that a 47-year-old Queensland man and self-proclaimed “Jesus” is in the early stages of developing a dangerous religious sect comparable to WACO, which ended in mass-suicide, Channel 7’s Sunday Night has reported.

Former real estate developer, Alan John Miller, from Kingaroy in Queensland, is the leader of Gods Way of Love.

http://au.news.yahoo.com/sunday-night/features/article/-/10276027/inside-australias-chilling-new-cult/

#81 E on 09.19.11 at 3:32 am

No, paying $500k for a $250k house is not reasonable, and, no, living off the grid with no running water is not reasonable either. Both scenarios equal poverty.

#82 Edmontonian on 09.19.11 at 4:01 am

In Edmonton , ALberta here it’s a wonder that the Real Estate Market hasn’t had the bottom fall out yet, but it looks like it’s coming.
The Real Estate Market plunged and left huge projects bankcrupt in Edmonton in 1977, 1981, and again in 1987. People think it’s different this time beacuse the interest rates are at Historical lows. The jokes on these numb nuts that think that. Back in the 80’s Albertan’s were saving over 25% of their gross income. Today, ALbertan’s are saving 0% of their income and are the most indebt consumers in the G-20 only to be out down by the numbnuts in BC (avrg. saving rate has been -2% the last few years).
Check out this house which has been listed all summer without a buyer… It’s under $140,000 -no takers!
http://www.mls.ca/PropertyDetails.aspx?&PropertyId=10893199&PidKey=42978245

#83 Fort Mac Flatlander on 09.19.11 at 4:29 am

I’m a 30 something, single guy in the patch looking to buy some farmland back home. I understand the value of paying off non-income producing debt and saving for a purchase, but can you explain with the shrinking purchasing power of “money” why not to borrow in todays dollars and repay in future depreciated dollars (especially at current rates)?

#84 Aussie Roy on 09.19.11 at 4:42 am

Aussie Update

China risks hard landing as global woes spread

China’s carefully-managed soft landing is turning harder by the day, threatening to deflate the torrid credit bubble of the past three years.

http://www.telegraph.co.uk/finance/china-business/8766230/China-risks-hard-landing-as-global-woes-spread.html

Even some in politics are finally seeing the light

Is the minister aware of a graph in The Australian Financial Review of 27 May that plots median house prices by state over the past 30 years and suggests that the first home owner grant scheme has had an inflationary impact on house prices?

http://www.lynnmaclaren.org.au/first-homeowner-grant-scheme

Aussie Gen X heading for poverty line RaboDirect survey reveals

GENERATION X is in danger of becoming generation debt, as many Australians aged 30 to 50 are our least financially secure and are struggling under a record high level of debt.

A new survey for bank RaboDirect found about 40 per cent of Gen X say their financial situation has worsened during the past year, one-third don’t have enough emergency money to last more than two months, and one-third regularly only just manage to make it through to their next pay day.

http://www.news.com.au/money/money-matters/gen-x-living-on-the-edge/story-e6frfmd9-1226140523457#ixzz1YNymyK8O

#85 Q on 09.19.11 at 6:26 am

I think we should demand that Tara replace Flabberty as finance minister, as she seems to have a much better grasp on reality than he does….and something he and the entire government lack…COMMON SENSE…

#86 Q on 09.19.11 at 6:28 am

Bravo Tara….you and Rick will be rewarded for your uncommon insight and common sense soon enough….

#87 SaraBeth on 09.19.11 at 7:12 am

As a former long haul driver… I am VERY proud of you Tara… Keep on using your head in this way and you WILL snag the perfect place for you…they ARE out there… keep on paying down any and all debts and keep on saving.

#88 Sky on 09.19.11 at 7:14 am

@ thing in the basement : ” not autumn yet! ”

Throw away your calendar. It won’t do you much good anymore.

Consider this :

UK, April 27, 2011

“…20-minute mini-blizzard at 5pm on Saturday afternoon left cars and roads under 3ins of snow and ice while just a mile away temperatures soared to 27.2C (81F).”

So, just a mile separating sun tanners from snow shovelers? Hmmm.

http://swns.com/snow-storm-covers-town-during-uk-heatwave-271055.html

Think it’s a one-off ?

Switzerland, August, 2011

“…tourists using the San Bernardino-Pass saw temperatures drop from 32 degrees Celsius to freezing within a few minutes.”

From 32 C down to freezing in a few minutes ? Hmmm.

http://web.orange.co.uk/article/quirkies/Freak_summer_snow_storm

I won’t keep haarping on the subject. I’ll leave you with a laugh. Lord knows laughs are in short suppy these days.

http://www.youtube.com/watch?v=GMpObwggyKI&feature=channel_video_title

#89 househornyhousewife on 09.19.11 at 7:53 am

Garth,

I am not sure that this is such a success story and that we should be tipping our hats off to Tara and Rick.

The way I see it, these two young people barely missed getting into a horrible situation our of sheer ignorance about how mortgages work.

I am not sure how much education either one of them has but if they haven’t finished high school, I think they should (either part-time or night school or whatever, just get it done). Knowing how interest rates work (ie. that an interest rate is per annum and not simply a one time payment … oh, if only …) is one of those things that you learn in school (at least MOST schools) .. along with being able to read things more clearly etc..

Long haul trucking is fine when you are young but it’s going to be extremely difficult when they get older and want to settle down. I know because both of my uncles were truck drivers (one of them a long haul driver and he worked his buns off all of his life to provide for his family, which he barely ever saw).

It should also be clear to this couple by now (I hope) that if they cannot even put a few bucks aside while living “off the grid”, how on earth are they planning to live “on the grid” AND pay their mortgage ? In addition to mortgage payments, expenses will be much higher than $300.00 a month, FOR SURE. I hope they realize now that they cannot afford ANY home at the moment and, until their situations change, they probably never will.

On the bright side, they have their youth (for now) and their life is still ahead of them. What they choose to do with it is really what is going to determine if they can eventually have children and buy a house and settle down.

And to their credit, they did NOT make that huge mistake and they got out just in time. And a BIG congrats on their wisdom in realizing that it takes money to have and to raise children. They are young and inexperienced but at least they have good heads on their shoulders. I just hope they use them to decide on what they want to do with their lives rather than trying to make a fortune long hauling for a living and wasting their time and energy thinking about buying a house at this time.

When I was their age, children and a big ball and chain house was the farthest thing from my mind (shudder). Knowledge, travel, opportunity, friends, exploration of different lifestyles … what the heck ever happened to that when one is young ??

Tara and Rick, there is plenty of time to think about buying a house later, when you are truly settled down and really know where you want to spend your down time (since you are on the road most of the time). What the heck’s the rush ??

And by the way, when you are truly ready, there are homes in the $150,000.00 range. They are not in the big cities but in rural areas and you can find huge properties at these prices there, believe it or not. Just loose the idea that you have to live in a big city … smaller cities are much better for raising kids too.

HHHW

#90 bill c on 09.19.11 at 8:23 am

Real estate North of GTA is DEAD. IT now does not make any sense. Its a total mess and collapse at any time is imminent. Cottage Country Real estate is in Crash Territory already. Nothing is moving and prices are starting to tumble. Anyone buying a cottage now will take a huge hit as prices will fall 50% within 2 years.
North of GTA especially anything over $600K has hit the wall. Nothing is moving and High end homes are dropping faster than the leaves in Autumn. GTA listings are up and this fall real estate season is about to see the tide turn. It will be the worst fall season since 2008. But this time there will be no turn around. SORRY ALL WITH A BIG MORTGAGE. YOU HAVE JUST BEEN ROBBED OUT OF A GREAT DEAL OF MONEY. Call your MP asap and ask them why? They bailed everyone else out so why not bail you out.

#91 jl on 09.19.11 at 8:41 am

i am puzzled too (taxhaven, young old fart). making $76 000 and only $5 000 in savings? that’s nothing. where is the money going? i support they are resisting house ownership when they cannot afford it. good on them. but they never will at their current savings rate! me thinks a bit of financial counselling would be helpful in really kickstarting their saving.

#92 penpal on 09.19.11 at 8:47 am

@ # 57 Utopia

Could you expand on this theme for us.
It seems an ominous warning, perhaps you could give us the benefit of your rationale for making it.
Thank you in advance.

#93 gladiator on 09.19.11 at 8:49 am

I saw a video on youtube with Larry Silverstein literally saying “it was damaged, so we had to take it down”.
Saw it with my eyes and heard it with my ears.
You don’t take down a building in the heart of Manhattan in 8 hours – you know, decide to demolish it, drill the holes in the key parts of it, install the explosives and “take it down”. So yeah…

#94 penpal on 09.19.11 at 8:50 am

@ #59 Nonplused

It’s Prada, not Pravda – that’s a Russian newspaper.

#95 gladiator on 09.19.11 at 8:52 am

that was about wtc7 btw

#96 blase on 09.19.11 at 8:54 am

Tara, it sounds like you need a financial advisor who can teach you how to hold on to your pre-tax dollars. Why aren’t you and your husband putting money into RRSP’s and TFSPs? That’s the fastest and simplest way to get your nest egg into the 5 and 6 digits. Put your money away in these before you spend it.

#97 jess on 09.19.11 at 8:58 am

Privacy contradictions

Mr. Flaherty said many Canadians have become concerned about the impact of the proposed piece of American tax legislation – the Foreign Account Tax Compliance Act, or FATCA — that would compel Canadian banks to gather information on their U.S. customers.

“The Money Laundry”,
What another Aussie achieved at a cost of £515.95 ($753)., was how easy it was to open anonymous shell companies and bank accounts

Undeclared beneficial ownership: Licence to loot | The Economist
http://www.economist.com/node/21529021 – CachedYou +1’d this publicly. Undo
2 days ago – They can hide their true identity in a maze of interlocking companies, or even use places such as the British … But a report this summer by Britain’s Financial Services Authority lambasted banks for their failure to investigate their customers’ real identity: many took the company registration at face value. …

The G20 and tax
Haven hypocrisy
Big economies are leaning on offshore tax havens. But greater abuse may be taking place at home

In addition to TD, the Canadian Bankers Association also weighed in, saying the requirements of the Foreign Account Tax Compliance Act are “highly complex” and “very difficult and costly for Canadian banks to comply with.”
====

#98 Bastiat79 on 09.19.11 at 9:00 am

@Smell the coffee

“Too many comments are self indulgent and shows an all too common cynicim about humble, but still noble and necessary work.”

I agree there is something fishy with the numbers (76k income and no savings). These numbers were presented to us as net of any expenses for truck maintenance. Before criticizing our cynicism, you should maybe re-read the hidden language in :”being young, we had to pay off some debts, we had to acquire things we needed and didn’t need”. This is the typical story of our youth, incapable of controlling spending on their addictions (legal or not).

#99 Dr.NickRiviera on 09.19.11 at 9:17 am

#35 HouseBuster

“What are you smoking? There was no controlled demolition [of Building 7]. Look at the design of the building. Maybe go to engineering school and figure out how it collapsed without a controlled demolition.”

These 1,582 individuals have attended engineering school and still question it: http://www.ae911truth.org

#100 Waterloo Resident on 09.19.11 at 9:20 am

Home prices in Vancouver and Toronto will continue to rise, perhaps even DOUBLING in price just this year ALONE !

The reason for this is that the financial markets of the world are a mess and investors see real estate as a “Safe Haven” during uncertain periods. Here’s the link to the article that explains all of this:

http://www.bloomberg.com/news/2011-09-18/london-home-prices-surge-as-investors-seek-safety-in-property.html

So, instead of condo prices and home prices in Toronto falling this year, there is all probability that we will see RECORD price increases this year, perhaps even seeing a 30% to 50% rise in home prices in Toronto this year alone !

Toronto and Vancouver are not London. You are sounding increasingly desperate. — Garth

#101 Devil's Advocate on 09.19.11 at 9:27 am

World population has increased from roughly 1 billion to 7 billion in the last 100 years. Since 1960 the world’s population has DOUBLED.

As Will Rogers said “Buy land they aren’t making any more of it”. Or was it Mark Twain?

UN sources figure by 2030 we may have spawned another 3 billion bodies on this planet.

Supply and demand… same amount of dirt – more bodies.

And you think real value is something less than these people are willing to pay?!? Be it rented, mortgaged or owned we all need a roof over our head. A home is not a right; it is a privilege, a privilege you must earn, protect and maintain. If you do not someone else will take it from you as it goes to the highest bidder. It’s just that simple.

Like rats in a cage my friends… like rats in a cage…

#102 george Klein on 09.19.11 at 9:27 am

Here are some interesting stats on real estate as of Today. Average Real Estate Sales for North American Cities.
Boston $145K
San Diego $315
Philadelphia $124
Miami $245
Seattle $340
Vancouver $560
Toronto $460
Regina $264**

Ladies we are in Big Trouble. Big Trouble.

#103 The American on 09.19.11 at 9:42 am

AT #79: Waterloo Resident, speaking as an American (not a North American), I can clearly say you know absolutely nothing about the U.S. or its government and politics.

The Federal Reserve is accountable to the U.S. public and the U.S. Congress BOTH. Yes, congress CAN do something about Fed policies, if/when they choose. There is accountability and checks in balances in place. In fact, its regarded as the world’s most transparent centralized bank. Thank God we have it here.

http://www.federalreserve.gov/faqs/about_12798.htm

Ron Paul will not be the next U.S. President, nor will he ever be. This is not because I do or do not agree with his policies. It is because American politics dictates he doesn’t stand a snowball’s chance in hell at making it (as always).

#104 Devil's Advocate on 09.19.11 at 9:49 am

There are people in this world who would give their right arm to live the privileged life Tara and Rick have.

We live in Disneyland. EVERYBODY wants to live in Disneyland. Make way because until the price of admission becomes too costly they will continue coming in droves. But, yes, we have plenty of land upon which to settle them?

You think Tara and Rick have a strong work ethic? There are those in other parts of the world who see vast and bountiful opportunities that lay about in this country like pebbles on a path. Opportunities we are too often above stooping to pick up.

#105 Smoking Man on 09.19.11 at 9:56 am

#77 BigAl (Original) on 09.19.11 at 1:53 am

Good observation Big Al

Not trying to get a debate on 911

Was only try to demonstrate that even when you know something to be true, going against what authority says comes with stigma and lables, hence controling people easy. Same rules applies to Real Estate buy pressure.

#106 Utopia on 09.19.11 at 9:57 am

“The historic pattern of global crises is that the region emerging strongest is often prey to its own crisis three years’ later or so, usually because it was able to respond with a blast of credit that stored up problems for the future…….

Such a rapid run-up in leverage is a sign that the incremental return on credit has declined, meaning that borrowers’ ability to repay is not keeping pace….

What is clear is that if Europe and America fall back into recession, China will not be able to buttress the global economy a second time around”.
————————————————

Ambrose Evans Pritchard’s comments on China’s evolving credit bubble should concern all of us. Indeed, there will not be a major country or region capable of pulling the West out of recession this time around.

As I have alluded before, our economies are now synchronized and this is an outcome of globalization itself. As a result, we rise together and fall together which suggests that this next period of recession will be particularly difficult and long lasting as China itself meets a hard real estate landing.

This also shows why the policy of a Yuan peg to the USD was a risky bet and poor policy. By not allowing their currency to float, the Chinese government has deprived its own people of significant buying power that might have driven domestic consumption and offset some of these credit risks.

A massive distortion was allowed to evolve in the Chinese economy as a result and it had no outlet to blow off the steam. Lets all reconsider then if command economies are really a better model to follow.

At the same time, much of the West has been paranoid about accepting investment from Asia in our own economies. We have rejected the overtures which prevented some healthy reinvestment in our own countries.

Both East and West have played this game of chicken right down to the wire and now that chicken is coming home to roost.

The outcome is as disheartening as it was inevitable. Global recession could easily morph into a long term depression as trade slows, investment falls off and pointless political bickering ensues.

It could have been so much different.

The full story here. This is about us in Canada too.
http://www.telegraph.co.uk/finance/china-business/8766230/China-risks-hard-landing-as-global-woes-spread.html

#107 blase on 09.19.11 at 10:01 am

Waterloo Resident is being sarcastic. He’s playing the part of the house pumpers and taking it up to a notch not even seen on Global TV. Well done Waterloo, I laughed at your gag the last few days.

#108 Utopia on 09.19.11 at 10:14 am

The massive ramp-up in the US dollar today should be telling you that the shit is about to hit the fan. This is a time to exercise caution. QE 3 is not coming, a Greek default is surely imminent and the system has been flooded with fresh liquidity in anticipation of a bad news story for investors who have relied upon Fed largesse to float their investment life boats. I smell a serious correction coming (and by serious, I mean a double digit crash).

This is pretty negative for Canadian Real estate prices going forward but that is pretty much a foregone conclusion. Sorry if I am understating the situation.

#109 disciple on 09.19.11 at 10:20 am

TREB mid-month report:
The average selling price in the first half of September was $454,194. (August was $451,663)
In response to strong price growth, more households chose to list their homes for sale in comparison to last August. Growth in listings is expected to continue. Increased choice will result in more sustainable rates of price growth.

disciple thinks: glut of listings + psychology + monster debtloads + contracting economy + violent reversal to the mean + conspiracies you never heard of = 80% overall decline in home prices in GTA. At least we’ll have hockey to placate the masses…Leafs HAVE to do well this year.

#110 Blacksheep on 09.19.11 at 10:27 am

Devil’s Advocate #102,

“UN sources figure by 2030 we may have spawned another 3 billion bodies on this planet.

Supply and demand… same amount of dirt – more bodies”
———————————————————
DA,

Unlimited cheap oil produced our global population explosion.
The days of CHEAP oil are gone.
I think you can most likely subtract 3 billion rather than add.
Not starvation based , just policy changes by Gov’s.

Like you point out, supply VS demand applies to all things.

take care
Blacksheep

#111 disciple on 09.19.11 at 10:40 am

Your previously “free” plastic bags never were. The cost price and profit on them were built into your overpriced retail anyway. You were always paying for them and probably more than 5 cents. So now you are paying 10 cents. You don’t make a stink about paying a 400% markup on your hardware, do you? Sheer, unadulterated, unchecked madness.

The reality is that their is a continent-sized floating city in the north Pacific made out of plastic, whirling around and around forever for the next thousand years. Don’t blame the retailers, it wasn’t their idea. It was yours. Look in the mirror once in a while, specifically at the eyes, take a good long look for a few minutes in total silence, you might remember again the forgotten outward image of the beast within.

Utopia, thanks for the info on the bags in Egypt. Real wealth is in understanding our problems (education) and fixing them (labour and technology), not in saving 5 cents. That’s my two cents.

#112 Regan on 09.19.11 at 10:46 am

It’s a great story guys. You’re 25 and don’t have debts – that’s really amazing and puts you far ahead of a lot of other people. Your rate of savings is really low, though – I think you might want to look at your real, after-expenses income from trucking. You probably spend a lot on meals and luxuries to relieve you from the stress and fatigue. I find this can really eat into your income. Saving money is all about maximizing income and minimizing expenses. And yes, there are times when even borrowing to increase your income or reduce expenses makes sense (like buying your own rig). Kids are a total money-losing venture, but money is only worthwhile when you spend it on things that make you happy.

#113 Devil's Advocate on 09.19.11 at 10:46 am

DA,

Unlimited cheap oil produced our global population explosion.
The days of CHEAP oil are gone.
I think you can most likely subtract 3 billion rather than add.
Not starvation based , just policy changes by Gov’s.

Like you point out, supply VS demand applies to all things.

take care
Blacksheep

Yes it was cheap oil which, likely, contributed most to the population explosion. “Peak Oil”? One can only hope. If not, I fear, things will soon get nasty. Hell they already have. As a teacher friend pointed out to me of his high school students “It is the rare ones who do not believe themselves a “GANGSTA” or wanna-be”.

Rats in a cage…

#114 Mr. Lahey. Trailer Park Supervisor on 09.19.11 at 10:50 am

91 bill c on 09.19.11 at 8:23 am
Real estate North of GTA is DEAD. IT now does not make any sense. Its a total mess and collapse at any time is imminent.

Billie boy as I have told Randy on many occasions, that sound you hear in the wind, those ominous sounds that keeps getting louder by the day…. Shithawks Bill, economic shithawks and they are dropping their loads all over the northern parts of the GTA and they will be coming soon to your neck of the woods in this fair land.
“Randy pour me another drink, it’s getting ugly out there.”

#115 Devil's Advocate on 09.19.11 at 10:50 am

And we will never run out of oil Blacksheep. That last barrel will just become so expensive people will kill over it. Hell they already are…

rats in a cage…

#116 disciple on 09.19.11 at 10:50 am

Moneta…interesting world you live in. Very, very far from mine. A generation’s distance, and a few industrial and economic classes removed. But it’s nice to turn back the clock and see how an outside member of the financial parasite class from last generation still thinks in the 21st century, a living museum. Like Observer, I thought maybe you were pumping your “Thornhill” swill, but I think that maybe you just do want to be contrarian for the kicks.

Did I get it about right, ma’am?

#117 Utopia on 09.19.11 at 10:52 am

#75 Kilt on 09.19.11 at 1:37 am

“Good for them. They have saved up $5000 in how many years”.
—————————–
I agree. The story makes no sense at all. Anyone who cannot save more than 5000 dollars over several years when earning 76,000 thousand annually is obviously not concentrating on their goal. Clearly, todays article was all about the days photo and an excuse of a story to make it match (or so I have been told on the QT).

Even big boats have small leaks. This one gushes.

Many independent long-haul truckers own and finance their rigs and must keep them in operating condition. These trucks cost about the same as bungalows in Regina. I assumed this was the back story. Could you not see that? As for me trying to find a story to match the picture, you have no idea how amusing that is. The last thing on my mind when I sit to create content for this pathetic blog is the visual. The words demand hours. The pic, minutes. — Garth

#118 Mr. Lahey. Trailer Park Supervisor on 09.19.11 at 10:53 am

Hey Smoking Man. I read the article about your gambling buddy turned bank robber yesterday. His answer as to why he robbed his own bank was that he needed the friggin money. Willie Sutton, famed bank robber in the USA had a similar response and made it the title of his book. His answer as to why he robbed banks was simply, “because that was where the money was”.

#119 Hans on 09.19.11 at 11:03 am

The Greek government’s new real estate tax, a desperate bid to meet its budget goals and secure fresh foreign aid, will hit the population hard. Greeks have almost their entire wealth invested in property — and are more worried about the tax than about the prospect of a national insolvency or leaving the euro.

I hear 13% of Greek citizens are income tax evaders. Hence a property tax. — Garth

#120 NWO on 09.19.11 at 11:11 am

Household debt reaches record high

I finally figured out how rocket scientist young canadians will pay off their mortages by 55.

Yeah they are going to borrow more to pay off their existing debt. Keep the party going Carney. You are the captain of a sinking ship!!

http://www.reuters.com/article/2011/09/13/canada-economy-debt-idUSS1E78C0DM20110913

http://business.financialpost.com/2011/09/19/rising-household-debt-a-threat-for-canadian-banks-moodys/

#121 Utopia on 09.19.11 at 11:11 am

#93 Penpal to # 57 Utopia

“Could you expand on this theme for us”
————————————–

Extremely sharp rise in USD today. Euro dropping.
Financials falling off a cliff. Everywhere.
Bearish technical patterns emerging in exchanges.
Corn, wheat and sugar in sharp decline.
China news negative. Bubble bursting high probability.
Greek default assured. Euro banks at risk.
Steady commodity economies of Canada and Australia on verge of recession despite low stimulants.
FOMC meeting may be getting priced in already.
US employment, consumption numbers dismal.
Bonds rising. Gold falling. The market knows why.

So much more to say. Why bother. It is a shit storm coming.

Be careful out there.

#122 timo on 09.19.11 at 11:28 am

http://www.cnbc.com/id/44567363

The millionaires’ rate would affect only 0.3 percent of taxpayers, they said. That would be fewer than 450,000; 144 million returns were filed for 2010.

http://www.cnbc.com/id/44578708

The core of the president’s plan totals just more than “$2 trillion in deficit reduction over 10 years. It combines the new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare.”

“The administration also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan. ”

This is a joke right? Be prepared Canada, when our time comes there will be a token tax on the rich and then a rollback on social safety net programs. Welcome to serfdom.

#123 refinow on 09.19.11 at 11:35 am

I like the fact that when there is a possiblity of losses in the housing market it all of a sudden becomes the big bad banks, the realtors, and mortgage brokers faults for giving people so much rope to hang themselves. However during the last 20 years when people’s homes were making money then it was their own good financial decisions that led them to that new found wealth.

It is really tough watching people shopping for their dream homes today, or considering that first investment property.. Who is ultimately responsible for the decision to buy.

The Bank’s are lending, based on the same guidelines they did 10 years ago, when people were making money buying homes. The realtors are providing the same services they did 10 years ago, and the same with the mortgage brokers….

But funny how perception changes with the potential changes in housing prices…..

How does anybody predict the future.

But of course we all live in the “It’s not my fault” society.

#124 Susan from London area on 09.19.11 at 11:38 am

I’m not understanding something seems off here. No kids,
no mortgage, living below the average in cost of living expences, making $76,000. in income no house and only $5000. in savings? Real estate has gone up significantly in the past 9 years, seems to me a few good oppourtunities have passed them by. Good time to look at the economic cycles learn from the past and don’t let fear hold you back from grabbing ahold of the future. Have patience with eyes wide open.

#125 Moneta on 09.19.11 at 11:43 am

disciple on 09.19.11 at 10:50 am
———
When I was a kid, a teacher told my Mom I was bad at math and great at languages and arts. I was insulted and decided nobody would decide what I’m good at.

Since a kid, not many have ever liked my ideas. I’ve gotten used to it and it has served me well. When everyone tries to climb a wall, I just walk around it. LOL!

In my early teens, I quickly got sick of being marked on a subjective basis and realized that if I wanted to get somewhere, I’d need to get top marks in something objective so I focused 100% on sciences. The most precise of all, math.

Then I went into finance and got the opportunity to follow every single sector that bubbled and burst since the early 90s. To say I’m cynical would be an understatement. I got the pleasure of working with finance people who are great at applying formulas but have no friggin idea where they come from.

My view is that over the next decade, houses are going to tank, pensions are going to get written down. Savers will be pissed off at the borrowers. Boomers will try to get the young to pay….

Lots of unproductive anger coming. I’m trying to tone it down.

#126 refinow on 09.19.11 at 11:44 am

Garth, you are just proving a point, that the homeless, not being in debt, may soon be the future homebuyers.

We are praising this couple for being such smart “investors”, they have been living in their truck and no running water for the last 20 years…

Wow…. And they are the smart ones….!!!!

#127 jess on 09.19.11 at 11:51 am

Little david has given the shirt off his back his shoes shared his food putting him at risk for malnutrition but his pants that would be the final indigity.

New York Mayor Michael Bloomberg warned Congress Friday, saying members should expect riots if the nation’s rate of unemployment remains above 9 percent.

“We have a lot of kids graduating college, can’t find jobs,” Mr. Bloomberg said on his weekly radio show. “That’s what happened in Cairo. That’s what happened in Madrid. You don’t want those kinds of riots here.”
=
the occupiers of wall street
http://www.truth-out.org/occupy-wall-street-thousands-march-nyc-financial-district-set-protest-encampment/1316446947

#128 45north on 09.19.11 at 11:58 am

disciple: 80% overall decline in home prices in GTA. At least we’ll have hockey to placate the masses…Leafs HAVE to do well this year.

go leafs go!

#129 T.J. BONES on 09.19.11 at 12:09 pm

Sir Garth Could you please write a book for people who are starting over lets say after a Divorce or death. Trying to get back on their feet again. The basics for existing from 0 to financial at least balance. Real basic profit /loss life for the future? I would buy that book as I have bought your others. Thank You for your time.

#130 Devil's Advocate on 09.19.11 at 12:29 pm

#130 jess on 09.19.11 at 11:51 am

#128 Moneta on 09.19.11 at 11:43 am

#124 timo on 09.19.11 at 11:28 am

#123 Utopia on 09.19.11 at 11:11 am

and so many others…

“Rats in a Cage”…

Rising real estate values are not the problem they are but a symptom.

#131 vreaa on 09.19.11 at 12:35 pm

UBC Staff And Faculty Housing Demand Study – “Inability to settle in Vancouver may lead me to leave UBC, despite being ranked as top faculty both in terms of teaching and research”

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

Is the cost of housing in Vancouver having a detrimental effect on the quality of research and teaching at institutions like UBC?

“There is NOT ONE public academic voice in Vancouver pointing out that there is a massive speculative RE bubble in this town.”

#132 Victoria on 09.19.11 at 12:35 pm

One of my kids goes to a private school in Victoria. He is on a soccer scholardship. Anyway I just assumed that everyone was wealthy sending their kids to this school. Also the parents are not young parents.

Anyway, for this soccer programme everyone has to fork about about $1,300 for travel to Ontario and somewhere else etc. My husband said most people were wondering how they would be able to do that …. makes you think.

#133 Cookie Monster on 09.19.11 at 12:37 pm

Nice to see a pair of junkies more fiscally responsible than half our population. Nothing like living the high life in a rotten car, shack, or mobile trailer home. The good life is only a needle prick away…. ahhh, Beverly Hills, I’m back.

I knew a truck driver junkie once too, he never owned a house either, but he’s dead now.

#134 Devore on 09.19.11 at 12:51 pm

#83 Fort Mac Flatlander

but can you explain with the shrinking purchasing power of “money” why not to borrow in todays dollars and repay in future depreciated dollars (especially at current rates)?

How far away is this future, and how depreciated do you expect the currency to be? This only works if you’re going to have more of this depreciating currency in the future than you do today. In other words, will your income beat the currency depreciation you’re expecting.

#135 Cookie Monster on 09.19.11 at 12:53 pm

Moneta
Lots of unproductive anger coming. I’m trying to tone it down.
—–
It’s not good to suppress so much anger, it’s much better to identify the people responsible for the crimes and lynch them, then everyone can feel better.

#136 Devore on 09.19.11 at 1:01 pm

#54 Dark Man

Devore: I’m assuming Tara wants children since she mentioned that they were holding off on having them until the housing market was better, and nobody ever feels 100% ready for children, you just have to take the plunge!

Sure, but they’re basically nomads right now, barely making enough to pay housing expenses of $300 a month, maybe they figure “taking the plunge” and having kids is not in the cards just yet. I don’t get the sense they’re waiting for the housing market to get better, they’re waiting for their situation to get better, of which housing is one part. It doesn’t sound like they’re in a position to take on a $1000+ mortgage plus all the house expenses.

#137 Just Ed on 09.19.11 at 1:08 pm

I wonder were all their money is going…

I have 2 kids, a 200k mortgage and am able to sock away funds every month. Our household income is less than 76k.

#138 Don on 09.19.11 at 1:08 pm

Don’t worry Tara, you are on the right track and building a reasonable house sounds right up your alley. You both seem to be prudent individuals. Building your own home is easy if you are willing to wait and do most of the work yourself. Consider building a timber frame – get a company to set up the shell for your home warrantly and you the your husband can spend your time filling it in. Build – what you need now and add on later. But wait till the lots come down in price. Good luck and I am waiting just as you are. Patience is a virtue. Peer pressure is a bitch – especially when they tell you to jump off a cliff – misery loves company.

I do not feel sorry for you – I am happy to share my world with folks such as you.

#139 jess on 09.19.11 at 1:09 pm

Who needs manhattan ?

Awesome photos of n. korea
I couldn’t help wondering about the colourful plastic (Li Ka shing) flowers and the Bud (rice beer)
Mt Kumgang a beautiful vista , casinos etc why would the chinese go to banff?
http://www.boston.com/bigpicture/2011/09/north_korea.html
====================
dead fish /solar panel company

19 September 2011
China solar panel factory shut after protests
Riot police were brought in to remove protesters from outside the solar panel factory in Haining City

http://www.bbc.co.uk/news/world-asia-pacific-14968605
This is the latest example of Chinese citizens being spurred to action over environmental worries. Last week, Shanghai halted production at two factories over worries about lead poisoning.

#140 Aussie Roy on 09.19.11 at 1:20 pm

Aussie Update

No new China stimulus – former deputy central banker

Chinese policymakers should be “extremely wary” about the risk of government debt, said Wu, who is now a senior lawmaker.

China is trying to clean up the roughly 10.7 trillion yuan ($1.68 trillion) in local debt — a hangover from a 4 trillion yuan economic stimulus package unveiled by Beijing in late 2008 to counter the global financial crisis.

China faces more economic challenges in the fourth quarter of this year and 2012, Wu said, adding that slower economic growth next year would be highly likely.

Weak global demand, government tightening steps to target the property sector and a slowdown in investment for highways and high-speed railways as could weigh on China’s growth, she added.

http://www.reuters.com/article/2011/09/19/us-china-economy-growth-idUSTRE78I05N20110919

#141 bill on 09.19.11 at 1:35 pm

Tara have you considered getting your class A?

#142 Nostradamus Le Mad Vlad on 09.19.11 at 1:36 pm

#53 Led — “maybe you should buy a modular home . . .” — A good friend bought a 3-bdrm. modular home in Parksville a few years ago, and loves it.

Bought second hand, so it was well maintained, in great shape, easy to maintain and not that expensive. Buying a used one also means a lot of other costs have already been covered.

#64 Dan in Victoria — “Was over at his house this afternoon for whitetail roast, potatoes, beets from their garden and fresh blackberry pie.”

Mmmm, blackberry pie with french vanilla ice cream . . . you and yours can indulge in the wine, I’ll enjoy health food at its’ finest!

Let me know if / when you head through K-Town!

#79 Waterloo Resident — “Here’s more crazy: RON PAUL is going to be the NEXT U.S. PRESIDENT . . .”

Depends on whom TPTB want. Bush 1 and everyone since have been the elite’s choice, which is why dubya won two, 9-11 and all the subsequent wars have happened, when Gore and / or Kerry should have been there.

If TPTB want hyperinflation and chaos, Ron Paul is not necessarily the best choice.

#88 Sky — Quick! Phone The God Goremeister and let him know the sun has packed up and gone on a nice, long vacation, appointing HAARP to handle all the wildfires, blizzards, quake-o-canoes and hurricanes in its place!

Gore will understand. We won’t, but that doesn’t matter!

#102 Devil’s Advocate — “Supply and demand… same amount of dirt – more bodies.” — Forgot WW3. That should take care of (roughly) 67% of us.

#105 Devil’s Advocate — “We live in Disneyland.” — Is that line ever true, except it’s a mishmash of “A Clockwork Orange” and “Disneyland”, leaving us to separate fact from fiction.

#143 dddd on 09.19.11 at 1:52 pm

disciple –
yes there is garbage in the ocean

the other 99.99% of rona bags are safely landfilled causing no harm to anyone

just because ppl in the dtes or in india take a crap in the streets is not a reason to ban crapping.

don’t be an idiot – stop littering and the ocean and land won’t have crap in it.

many countries in asia put their garbage on the beach and let the tide take it away

as someone who spends hundreds of hours on the water on this side of the pacific each year i can tell you the bags are not coming from bc.

gore is a fraud – agw is a fraud and wasting trillions
plenty of nat gas and oilsands to keep the planet growing for 300-500yrs and if we run out we build nuke plants or go dark – period. energy will always be cheap relative to most other things , even 300bbl oil won’t get me to stop running my truck/motorcycle/boat/tools/gen/atv etc. (ok maybe the rv goes!)

yesterday i was checking out at home depot and got all tense as i was finishing (subconsiously expecting a bag charge) , but was pleased to find none! i will avoid rona too.

oh and re wtc7 – everyting i learned in engineering school says it was deliberate demo.

#144 Nemesis on 09.19.11 at 1:53 pm

“The words demand hours. The pic, minutes.” — Hon. GT

Hmmm… made any pix from scratch lately, GT? ;)

I would so convoy with Rick&Tara.

Cab over or conventional?

#145 Aimhigher on 09.19.11 at 2:00 pm

Are you folks on crack? Calling this story “normal” or uplifting is just following Garth’s lead. How about having your own opinion?
Lets see: So we live in Canada which is land of opportunity and Grade A living standards (as compared to the wide majority of the world). And we seem to be applauding these losers who can’t even muster running water and HEAT in cold Alberta winters? This is progress? Folks is Somalia might be better off.

I am an immigrant who came to this wonderful country 18years ago and own a house outright and have a wonderful job and a degree in business & live well within my means. But to go to the other end of the scale and make heroes of people who have $5K in savings and bath in a pond and eat tree leaves is a joke.

#146 Snowboid on 09.19.11 at 2:22 pm

#65 penpal on 09.18.11 at 11:57 pm

Okay, wink, wink – understood.

But I will include BPOE, DA on the list, the posts are increasing delusional – like I get when I’m off my meds!

(Just kidding)

#147 detalumis on 09.19.11 at 2:34 pm

I guess I’m the only one that would notice that it is almost impossible to have little kids and be a long-haul trucker mom. Who would babysit these kids while mom is away hauling the loads? I assume she would have kids and stay home at that point and then become 100% dependent on her spouse.

I would suggest Tara goes back to school, takes up nursing or something so that she can live in all sorts of towns and locations across the country and work part-time while the kids are little. The odds of a relationship that starts at age 16 and 19 actually lasting a lifetime these days is very, very slim.

#148 dddd on 09.19.11 at 2:37 pm

junkies? really? not any other expensive vice? missed that one.

stock mkts lookling weak – i feel a big late day slide coming

#149 Nemesis on 09.19.11 at 2:38 pm

Further to my prior (#147)…

When the ‘scribes’ have finished dipping their quills… the lenses’ work begins…

Check this out.

http://tinyurl.com/4nczl8z

PS – ‘lenses’ and their accoutrements are much heavier.

#150 pjwlk on 09.19.11 at 2:51 pm

My RE agent friend just sold a Don Mills (ON) house for $133k over asking! The place is said to be a dump and has to be completely gutted. The house was listed for a week and had no bites. It was then taken off the market for a week. One week after that they re-listed for $100k less than they previously asked and got a final offer that was more ($33k) than the original asking. Go figure…

#151 Harlee on 09.19.11 at 3:03 pm

Hicksville, Alberta @ #78. I really liked your post,especially the comments about big cities. I was born in a small town of around 1,700 and lived there until I was 8,when we moved to Saskatoon . That was in the early 1960s. In that time the town’s population has pretty well stayed the same,while the city’s population has doubled. We have more entertainment, amenities,fancy hotels and restaurants,and advanced technology in Saskatoon, but also more homelessness,crime,higher house prices and more young people pissed off at the rising cost of university education. Oh yes, this is what city hall and the government calls “progress”….I’m not too sure.
I was in Vancouver for the last two weeks helping my mother who is retired there. The old house that she sold was boiught by a young couple,who aren’t married yet.They fixed it up and are renting it to an American couple. My mom is pleased that the old house,that my father also did some work on when they bought it, is still standing. They built those old houses “solid”.
I generally can’t stand the very large cities too much,so find ways to distract or amuse myself. The “Pawn Stars” were appearing at Hastings Park,so I took a bag of Saskatchewan potash with me and tried to sell it to Corey (Big Hoss). I told him and the MC on stage that potash is quite valuable on the stock market,but eventually Big Hoss declined in buying it . I figured he would ,but it was still a hoot to see their reaction . Some of the crowd there found it amusing anyway. I’m just a Saskatchewan eccentric,that’s all……

#152 bigrider on 09.19.11 at 3:12 pm

$450,000 for a 400sq foot condo at Avenue and Yorkville for the soon to be renovated/converted Four Seasons hotel.

Arguing with a couple of friends at the Lettieri’s on Yorkville yesterday did no good. They have the marketing brochures and are convinced they are good investments.

How may you buying Garth?

How many square feet in an acre? — Garth

#153 bigrider on 09.19.11 at 3:32 pm

Devils Advocate- ” Real estate’s rising prices a symptom not a problem ”

Real estate prices have fallen and are continuing to fall in the parts of the world that counts. Still rising in Canada for a host of riduculous reasons but nonetheless, on balance ,have declined and are continuing to decline globally.

So much for limited land argument and population growth.

#154 bigrider on 09.19.11 at 3:35 pm

Every suit on any business program(BNN) recommending safety by allocating to dividend paying stocks. Cauton ,caution ,caution, risk off people.

Let’s all rush like lemmings into dividend payers.

#155 allister on 09.19.11 at 3:38 pm

Tara – you $5000 cash. That make you richer than the bank debtors. Enjoy.

#156 Smoking Man on 09.19.11 at 3:41 pm

With every passing day Garths Peecock feathers will get brighter.

Chech this one out

http://business.financialpost.com/2011/09/19/rising-household-debt-a-threat-for-canadian-banks-moodys/

#157 Greg on 09.19.11 at 3:43 pm

Chinese investors:

http://email.angelnexus.com/hostedemail/email.htm?h=f6fc2d988eebc92e5fec4054b8e982ac&CID=9856859874&ch=FDBBA826576B8A883B588CEE231D8BD8

#158 Beach Girl on 09.19.11 at 3:47 pm

Sad day, weather is shitty. Feel sorry for the trailer park kids. They are probably doing there best. But that is not going to cut it.

Who is actually making money in Canada? Please answer this one.

#159 Beach Girl on 09.19.11 at 3:54 pm

My dear departed father told me in 1988, that this country is not making jobs. He was a tool & die guy. He said sitting behind a computer is not actually making anything. Was he wrong?

He worked for GE and was in charge of 400 people. At the GE Plant on Eglinton Avenue. He died that year. Was MENSA quality. In my mind any way.

#160 disciple on 09.19.11 at 4:07 pm

#146 dddd…I agree with everything you wrote. I don’t pay for bags either, even though I am paying for the bags, get it? It’s already priced in. Yes, Gore is a fraud, he spends more on power in one day than 50 villages in East Timor. Kind of like Suzuki, hunkering down in a jet, releasing a year’s worth of thousands of automobile carbon emissions flying around the globe to “talk” about lowering carbon emissions. Ha!

#161 Victoria Tea Party on 09.19.11 at 4:32 pm

“PROPERTY” ROLE MODELS FOR THE PRESENT AND FUTURE TIMES IN WHICH WE “EXIST”

This young couple should be heartily congratulated by one and all for doing the right thing.

They will win their “property campaign” for certain because they CARE about their own outcomes a healthy attitude especially when ample caution is ALSO applied to their financial thought processes.

A very few years from now when the detritis of this non-stop financial calamity we are all rattling through (never mind what might happen soon in the Middle East!)
finally ends with a final giant shudder, shucking off the remainding real estate victims everywhere, it will be time for Tara and hubby to pick up a nice property.

They will be able to name their own price, because they will be the NEW VULTURES of Canadian real estate. Lots of flesh and bones out there! There will be so much choice for so little loot.

Financial bullet-proofing is what this couple is doing and a lot of other young people who have not yet enslaved themselves to the banking/real estate cartels, would do well to emulate the actions of this couple.

This is very positive news indeed. Good luck.

#162 Off-Gridder on 09.19.11 at 4:44 pm

This is from Tara:

To those asking where the money went. In my story I was discussing the 5 days we spent lusting for a house and considering buying one. We are in fact very conservative spenders after hard lessons learned. When I was 18 and Rick 21, we ventured into the 1 ton Owner Operator business borrowing $15,000 from my Dad for a truck and borrowing the remaining $35,000 at 7% I believe. It was suppose to make an amazing $9000 a month. After over $20,000 in fuel, 8 months of no time off and living in the back a quad cab of a 1 ton dually diesel truck with 2 malamutes, over $11,000 in repairs, and$750 a month truck payments we made the decision to get out before the hole got bigger. It left us with -$5000 earning for 2004 tax year, $17,000 of borrowed money from family, and $5,000 in maxed out credit cards that were overdue and demanding payments. So as you can see, long story short, the first 2 years of excellent earnings trucking with Class 1 licenses went to living expenses and paying off that debt in its entirety.

The second part to that is that the first 2 years of trucking was during very good economic times. Although our company has done very well to keep work flowing, I know that it has struggled to maintain the old wages. Being very eager to impress during that time, we even overworked ourselves and were considered to be the top earners at that point as work gets done quicker with two drivers equalling higher than average earnings. And yes we have a strong work ethic! We did our best to eat out little and prepare food on the road. But it cannot always be avoided when you have several long hour days and less and less sleep by the day. Any trucker will understand the true hours worked that are not reported. Stupidly, after declining to buy a house we opted for a new Ford Ranger. It is nearly paid off, is our only debt, is for sale currently, and services our needs (hauling dogs, firewood, fuel efficiency, 4×4 to go up the mountain). It does, however, add a $550 expense monthly plus insurance and fuel.

The whole story of ours has not been reported. The 3rd year of trucking we both became injured to the point of having to leave for a year to recover. We only made about $32,000 before tax during which time we continued to pay health care, as our previous years income determined subsidy. We also opted to pay $75 a month for Blue Cross since we required additional medical coverage. During that time, although low income, other health circumstances had us move into the trailer we call home now. We managed to save enough money to buy the trailer, set up the power, pay lot rent, and maintain perfect payments status on our truck. Our only vice, $500 a year on internet as we have no tv, and our 3 malamutes whom we feed grain-free food ($3500-$4500/yr). Extras we bought for enjoyment purposes include backcountry skis, bikes, a canoe, and camping gear for our yearly vacation. We are Alcohol and drug tested for our career, so there no time for that sort of play, even at our age. We can, as you can see, account for every penny. In fact, we have saved monthy budgets on our computer accounting for our money.

And lastly, other expenses that ate up earnings… Sure we could have put this into a house but we chose not to. Off-grid living comes at an expense that pays off over time. We built a small 16×16 cabin on my Dad’s property ($5000) to live in for 4 years which has no amenities unless you consider the wood stove. It is a 7km trek into the bush to get to, with 11 switchbacks, and a 2500ft elevation gain from town. Living up there meant survival. With 13ft annual snowfall every year, plowing the road is fiscally impossible. It made far more sense to have adequate winter transportation to bring up supplies such as dog food, human food, water, fuel etc. We chose to purchase a quad with tracks. We paid, you guessed it, cash ($18,500). It continues to serve us. No power up there so we bought solar panels, batteries, charge controller ($3000 ish), chainsaw, generators (should have just bought a honda). We even have $500 in emergency food rations and a 1 year supply of dog food. Recently, we bought a 5 in 1 wood tool, but will be selling products soon to recover its cost. And in the near future we are considering a sawmill. We plan to move back up “the mountain” next year finishing off the cabin first ($3000 upcoming cost). We are selling the trailer ($12,000), power pole ($500), and hopefully truck ($15,900 – $6000 debt). All extra moneys are being invested. We own 3 gold claims equalling 56 hectares, which we pan ourselves, on a well known gold creek. Luck had us find them for cheap. We own 1-10oz silver bar physical silver. We watch the prices and have earned $150 thus far. But mostly it is just fun to own an hold.

Being long haul truck drivers is what almost drove us to buy a house initially. We longed for a place to kick back. We looked at what we were missing out on and almost got sucked in. I did graduate, my partner is going to finish this winter because it is never to late to learn. I am part time trucking and part time group fitness instructor currently. We intend to leave trucking asap. It is wrecking our bodies and wasting our minds. We have learnt that our shiny first year income was not necessarily stable, and fluctuated enough to have made any mortgage payment unstable, let alone a truck payment and the rest of the bills. That is my main point in the end. And as far as returning to the mountain and not moving elsewhere. I like my current rural area, we have goals for self sufficiency, and my 71yr old father is alone and going blind due to glaucoma and will rely on us more and more ultimately. I am happy to be there for him. A house can indeed wait. We have not thought about it since Dec. 2006. Sure we made a mistake about the interest. We got too excited and that is when we made two rules. The “24 hour waiting to make a final decision rule”, and the “if one of us disagrees its a no go” rule. I was naive, we both were. I worked it out with that 5 day ordeal. So I am not stupid and high school vaguely teaches you little about the reality of finances. We have learnt far more from experience.

I want to thank-you for ALL the wonderful supportive comments and even the questions and skepticism. I hope I have helped to clarify. We have nothing to hide. (P.S. Kids can wait until I live in more than 304 sqft of space).

I want to thank Garth Turner! I never would have expected to have been published on your site! I was shaking with excitement :D It is a great honor, as I am a huge fan, and I have been following this blog and recommending it since its inception! To no avail however. Two friends took the plunge anyways and a third was offended. You quoted my words exactly and that is true journalism. Thank-you for your continued honesty and words of wisdom. I must go to bed now. I have done 3 night shifts in a row and in two months we will have well over $10,000 now that we have reached the point where we can save ridiculously. I will get my house within the decade and on my terms. Cash.

TARA & RICK :D

#163 Off-Gridder on 09.19.11 at 5:02 pm

From Tara:

#140 Just Ed

You may be socking away some money, but you are also hugely in debt. After interest that house will have cost far more and sell for far less. Best of luck.

#144 bill

Rick got his class 1 2006. I followed in 2007. Super-B flatdeck drivers. Currently convoy team driving nightshift. I took last year off learning and becoming a group fitness instructor. Low wage but healthiest career choice out there.

#148 Aimhigher
I have merely taken 5 years to gain life experience mistakes included. Don’t forget you took 18 years to get where you are and had a ridiculously cheap mortgage compared to today I expect. Imagine, with my low cost living (expenses soon to be $1200 per month total and earnings fluctuating between $3000 and $6000 depending on how hard we feel like working) over 18 years. That equals endless opportunity for me. Kudos to you though. P.S. I have a shower now and I am very humble thank-you kindly. I have far more than those in Somalia have and I am very grateful. I even donated $250 recently (tax receipt included). How much did you donate?

My wood stove never lets me down in winter. My trailer is a 2000 Tahoe with a slide. Very nice inside. Why do people make shelter more complicated than it needs to be? Food, shelter, water it is simple. I plan to switch careers at some point. Doing some upgrading this winter on the side. But not nursing. I am too natural. I am striving for self sufficiency ultimately. Thanks all thanks for the comments. I never thought I would be so controversial! :D

#164 City Slicker on 09.19.11 at 5:16 pm

In Edmonton , ALberta here it’s a wonder that the Real Estate Market hasn’t had the bottom fall out yet, but it looks like it’s coming.
The Real Estate Market plunged and left huge projects bankcrupt in Edmonton in 1977, 1981, and again in 1987. People think it’s different this time beacuse the interest rates are at Historical lows. The jokes on these numb nuts that think that. Back in the 80′s Albertan’s were saving over 25% of their gross income. Today, ALbertan’s are saving 0% of their income and are the most indebt consumers in the G-20 only to be out down by the numbnuts in BC (avrg. saving rate has been -2% the last few years).
Check out this house which has been listed all summer without a buyer… It’s under $140,000 -no takers!
http://www.mls.ca/PropertyDetails.aspx?&PropertyId=10893199&PidKey=42978245
——————————————————–
Nice! That would be a $1.2 million home in Raincouver.

#165 Blacksheep on 09.19.11 at 5:21 pm

Devil’s Advocate #117,

“And we will never run out of oil Blacksheep. That last barrel will just become so expensive people will kill over it. Hell they already are…

rats in a cage…”
———————————————————-
DA,

I don’t like the term “Peak Oil”.
How many barrels of oil are consumed to extract new barrels?
1930–1 barrel in/100 out
1970–1 barrel in/25 out
2011–1 barrel in/3 out (Tar sands)

So what happens if the ERoEI or energy returned on energy invested reaches 1 barrel in/1 out?
Oil extraction stops due to a zero gain, on energy input.

At this point, it no longer maters how MUCH a barrel of oil costs.

Many people don’t recognize the fact, that until cheap oil came along, the living standards of many, sucked.

Due to the miracle of CHEAP oil, society was able to share some of the wealth. Farm production dramatically increased. Take away CHEAP oil and guess what happens?

Lets just hope “Abiotic Oil” is more than a theory.

take care
Blacksheep

#166 Henry Thoreau on 09.19.11 at 6:10 pm

#148 Aim Higher

What is it with you high brow types who think us folk living in a cabin are such losers?

For Garth, there are 40,000 square feet in an acre. Smoking Man told me.

#167 Q on 09.19.11 at 6:12 pm

A friend of mine has spent the past week in Vancouver. In the summertime, there’s not a better city in the world to spend time in. The rest of the year, however, steady rain and ever-present clouds make it one of the most depressing places to be. Right now, British Columbia — along with the rest of Canada — is in the midst of a major real estate bubble. It’s ridiculous. There have been reports of 100% profits in as few as four months on some of the most sought-after real estate. It’s worse than the U.S. real estate bubble, and it will end just as badly.

He’s been staying in an apartment in one of the newest buildings in the city, the Fairmont Pacific Rim hotel. A room here will set you back at least $500 a night during the peak summer season (if one is even available). He is staying in the residential part of the hotel. And it’s the epitome of a real estate bubble.
The place is a two-bedroom, 2,000 square foot condominium.
Don’t get me wrong, it’s nice. The shower has seven heads, the blinds go up and down via remote control and the view is tremendous…BUT
….it’s not as nice as the numbers make it out to be.
You see, this condo was originally bought for $3.2 million. The mortgage on that would be about $18,000 a month at current interest rates. And it’s a condo, so there are all kinds of other fees and costs on top of that. The monthly fees exceed $1,500. The taxes are another thousand dollars a month.
All in all, the cost of owning it is over $20,000 a month in what real estate analysts call Owner’s Equivalent Rent (OER).

The rent, meanwhile, is a relatively small $5,000 a month. So the price-to-rent ratio — a key indicator of real estate values — is an astonishing four to one.
In other words, the cost to own is four times higher than the cost to rent. At the top of the U.S. real estate bubble, the average price-to-rent ratio peaked at about 1.65 to one. The long-term sustainable price-to-rent ratios usually hang around one to one or slightly above or below.

Canada is in a real estate bubble. It’s widely known.

Vancouver real estate has one major buyer who’s largely insensitive to price, location, interest rates, schools, neighborhood, and all other factors which greatly affect real estate prices: the Chinese.

The Chinese are buying up international property largely because it’s the only way they can get money out of the country. There are so many rules governing Chinese citizens and their money. They can’t have money in foreign bank accounts… They can only leave the country with a limited amount of cash… In short, they have very few options by which to shield their money from the Chinese government. The only reasonable way for most wealthy people in China to get money out of the country is to buy property.
And it’s why they are willing to pay absolutely absurd prices. They may pay $3 million for a place that’s really worth $1 million because the real value is not in making money on the property or having a stable income from renters; it’s in having money out of China, the modern equivalent of an insurance policy on their own financial freedom.
The Chinese government may take their factories, homes, bank accounts, and everything they own on a bureaucrat’s whim. And they can do it for the “greater good” or any other sudden and unexpected reason. But the government can’t take their international property holdings.
The Chinese aren’t just buying a summer home. They’re buying a ticket to freedom if they ever need to exercise it. And that’s why the Chinese are seeing a value at any price.

Today we see the extremes people are willing to go through to avoid the final part of financial repression, currency controls. After all, the purpose of currency controls is to make the financial repression inescapable.

The Vancouver real estate bubble is a perfect example. If it weren’t for the Chinese trying to get one foot out of their own country, the prices would likely be half of what they are today. Financial repression creates massive dislocations in markets around the world.

You copied that word-for-word from here. Shame on you. — Garth

#168 Westernman on 09.19.11 at 6:12 pm

One thing stands out clearly in the story of the two dumb-a$$ truck drivers…. they are so attached to two lousy dogs that they will build their entire living arrangements around them…absolutely amazing!
I have one piece of advice that will increase their standard of living immensely, and it’s amazingly obvious if one would just use logic and common sense.
Ready? Here it is – GET RID OF THE DAMM DOGS!

Would you say the same of kids? — Garth

#169 BrianT on 09.19.11 at 6:23 pm

#168Black-Even the proponents of abiotic oil concede that it would never be cheap oil. The theory rests upon the ability to drill deeper beneath the surface of the earth. A lot of the debate about abiotic oil is simply a theoretical discussion about the origins of the world’s large oil deposits, not proposed necessarily as any sort of viable solution for oil depletion.

#170 Josh L on 09.19.11 at 6:28 pm

Off Gridder (Tara),
Thanks for the honest and revealing update. It’s all too common on these blogs to only get a part of the story and that’s when speculation runs wild amongst us all. Sounds like you’re on a well thought out and very fulfilling life path. That’s all that really matters. Best of luck!

#171 BrianT on 09.19.11 at 6:31 pm

#165Tara-You sound like hard workers. IMO getting out of trucking is a sound decision-that industry is the most vulnerable to oil depletion of any-a lot of the volume will move back to rail and shipping down the road. The other aspect is that any small business activity with a high gross income and low net income is to be avoided as we move into a slow/no growth economic model. Lean and mean is the ideal.

#172 Derek R on 09.19.11 at 7:07 pm

#165 Off-Gridder on 09.19.11 at 4:44 pm wrote:
To those asking where the money went.

You’ve done well, given the circumstances. I’ve got kids your age and they’ve done okay so far. But if you were my daughter I’d be proud of you. Keep up the good work!

#173 Nostradamus Le Mad Vlad on 09.19.11 at 7:37 pm


‘OLD’ IS WHEN . . .

Your sweetie says, ‘Let’s go upstairs and make love,’ and you answer, ‘Choose one; I can’t do both!’

Your friends compliment you on your new alligator shoes and you’re barefoot.

Going bra-less pulls all the wrinkles out of your face.

You don’t care where your spouse goes, just as long as you don’t have to go along.

You are cautioned to slow down by the doctor instead of by the police.

‘Getting a little action’ means you don’t need to take a laxative today.

‘Getting lucky’ means you find your car in the parking lot.

An ‘all nighter’ means not getting up to use the bathroom.

You’re not sure if these are facts or jokes.

(I sent this in large type so you can read it)
*
Prosperity during crises; BoA Grow baby, grow. Morph into Minnie Mouse! Poverty In The USA It’s tough growing up these days; Central banks can’t win for losing; Fort Tungsten or what could have been done differently; Greece Rebound to hell; 1:29 clip ECB’s Trichet hands Geithner a lesson in bitchiness; US Fed A criminal syndicate, but taxpayers are not responsible for paying off govt. debts; New SEC Rule Banning banks from doing naughty things.

Brzezinski As well as all the glowing tributes, he is also ripe for depop., NWO, etc. Never Mind The Bollocks; 5:09 clip Ron Paul takes California; Yemen CIal Queda is very busy these days; Too Big To Fail? No country, central bank or bank is too big to fail. Nothing is immune — just remove the money and there is nothing left; Turkey wants to form alliance with Egypt; 1:34 clip Remember when Gordon Campbell stood proudly at the old toll booths on the Coke? That was free money to the province. Then he tore up the nurses contract, went to a Build-A-Burger meeting in ’09, brought in the HST, quit and is in the process of being made a little tin god. Watch them bring back the tolls again; 11:19 clip Kiss goodbye to privacy; Ireland Now they have more to be angry about.

#174 blase on 09.19.11 at 7:49 pm

Hey Garth,

Kindly write about or comment on the earlier post that talked about new oil and gas trusts that pay 10%.

Why, do you have too much money? — Garth

#175 Westernman on 09.19.11 at 7:52 pm

Garth – Allow me to point something out which is very important – dogs are not kids. Kids ( children ) are small human beings… dogs are ANIMALS.
I hope that clears things up a little bit.

Animal companions are of equal emotional importance to many people. If they want to build their lives around them, you are no judge. — Garth

#176 Cookie Monster on 09.19.11 at 8:03 pm

#165 Off-Gridder on 09.19.11 at 4:44 pm
Tara, I hope my post was totally wrong and that you just laughed at me. The $5k savings was the red flag. Sorry, no offense.

It’s true though, i did know a guy like that who’s gone now.
Don’t buy, just keep saving and investing.

#177 Dan in Victoria on 09.19.11 at 8:18 pm

Tara @ 165
Good to hear the whole story.
you’ll do just fine over time.
Good work ethic, critical thinking, and a little luck…..
You never know where life will take you.
Nice to hear from someone in the trenches.
Good Luck, I mean it.

#178 sales and prices down again on 09.19.11 at 8:35 pm

A buddy realtor says sales in the GTA are down along with average priced . This is all across the (416) and (905) . Many worried realtors continue to post on greaterfool as sales are down. The housing market is getting worse each month now. Grab the popcorn this is getting fun.

#179 R on 09.19.11 at 8:46 pm

Tara is living where few people are right now… in reality. I have friends who make the same money they do but own a near $400k mortgage, credit card debt, big box store debt, no savings and no discipline. They constantly tell me I need to buy…then proceed to argue about money.

I keep on renting and living in the real world like Tara.

#180 MM on 09.19.11 at 8:58 pm

Good story about interesting people – picking your own path is more rewarding than the approval of “the neighbours”

#181 r on 09.19.11 at 9:09 pm

“He said sitting behind a computer is not actually making anything. Was he wrong?”

William H. Gates III would beg to disagree, along with a whole bunch of other people with a shitload of money.

#182 Devil's Advocate on 09.19.11 at 9:21 pm

Okanagan Mainline Real Estate Board (OMREB) sales all types this month to date for the Central Division (Kelowna from Peachland to Oyama) vs. last year same period

Sept 2011 MTD @ the 19th
Unit Sales 172, Ave. Price $410,548 Ave. DOM 111

Sept 2010
Unit Sales 117, Ave Price $410,883, Ave DOM 100

Ya real estate is tanking all right… the horror.

Price follows volume. Add to that, inventory levels are down. I’m thinkin’ we are headed to some price increases… believe it or not.

#183 Devil's Advocate on 09.19.11 at 9:27 pm

And…

Single family residential…

Average price last Sept… $492,252

this September… $549,297

#184 Timing is Everything on 09.19.11 at 9:43 pm

“I will get my house within the decade and on my terms. Cash.”

I still say, “OK.”…..and ‘What Doesn’t Kill You Makes You Weaker’

http://tinyurl.com/24rxfg3

——————————————————-
#182 – Grab the popcorn this is getting fun.

Doesn’t anybody like sno-cones anymore?

http://tinyurl.com/3ho2a3w

#185 45north on 09.19.11 at 9:46 pm

Beach Girl: He said sitting behind a computer is not actually making anything. Was he wrong?

Yes he was. computers are the way we talk to each other. Ergo our presence here.

#186 Herb on 09.19.11 at 9:46 pm

Tara,

nice retort. Well done!

#187 The thing in the basement on 09.19.11 at 9:49 pm

“Animal companions are of equal emotional importance
to many people. If they want to build their lives around
them, you are no judge. — Garth”

Hmmm. Can we replace “Animal companions” with “houses”?

#188 45north on 09.19.11 at 10:05 pm

sales and prices are down: A buddy realtor says sales in the GTA are down along with average priced .

devil’s advocate: Okanagan Mainline Real Estate Board (OMREB) sales

Sept 2011 MTD @ the 19th
Unit Sales 172, Ave. Price $410,548 Ave. DOM 111

Sept 2010
Unit Sales 117, Ave Price $410,883, Ave DOM 100

well DA assuming that this is a peaches to peaches comparison

I’m thinking the GTA (Greater Toronto Area) pulls the whole darn Canadian market

#189 terces on 09.20.11 at 12:08 am

Tara – heartfelt and emotional honest writing. It sounds like a whole lot of people are cheering for you.

It seems crazy, these financial times we are are in – getting jerked from one calamity to the next.

But some people know what is going on. It has been a repeat performance for centuries. And these people are the wealthy and they are about to get a whole lot more wealthy because they know how to prepare and behave in these times.

It is called a secular bear. You see the world goes from eras of prosperity to eras of stagnation. And when you are in an era of stagnation, the financial and economic worlds are very volitile – crazy extremes, both up and mostly down. Think back – what was it like from 1982 to 2000?? Calm right, that was our last era of prosperity.

And the secular bear, the era of stagnation we are in started in about 2000 – and they last about 20 years, give or take. The weird thing about this one is the ridiculous overvaluation of real estate.

If you type “era of stagnation” or “era of prosperity” into your paid off computer you will get lots of great reading material.

The bottom line, the moral of the story, is hang on and keep doing what you are doing. Your time will come, and you will be solid in your character and in your commitment and in your lack of debt.

#190 Linda on 09.20.11 at 4:32 am

I really enjoy reading this blog, but today’s slew of comments rankled. What is with all the ankle biters?

Whether or not you agree with Tara’s life choices does not give you the right to say her relationship will falter because she is young and accuse her of being a junkie.

Telling someone to get rid of their pets is equally offensive. Responsible pet owners commit to caring for them over their lifetime. To suggest otherwise is really immature and reeks of callousness.

As someone who has volunteered at animal shelters, let me say that those of you who view animals as disposable commodities are despicable. Just as single parents have to get on with it and survive, people with pets should, too. Getting rid of a cat to slash the budget should not be viewed in the same light as cancelling one’s cable.

#191 betamax on 09.20.11 at 5:35 am

#171 Westernman: “they are so attached to two lousy dogs that they will build their entire living arrangements around them…absolutely amazing!”

Nothing amazing about it. I’ve known people who bought a house & property (at great expense) just to have dogs.

“I have one piece of advice that will increase their standard of living immensely”

If they love dogs, then their quality of life declines without them. I wouldn’t trade my dog for any amount of money. He enriches my life in ways that money cannot. He may be an animal, but I’m a better human being for having him.

#192 Q on 09.20.11 at 7:01 am

Sorry Garth, you’re right and I should have (meant to)given credit for the blurb. Just seemed to sum up the Funcouver market rather well and I didn’t have the time to resum in my own words. The only thing that I would add is the fact that a large percentage of these purchasers are borderline criminals (which wasn’t in the blurb) who wish to get their money out of China for “less than honorable reasons”. I have a business in China and the corruption is unbelievable….rats (bureaucrats) are trying to jump ship (with everything that isn’t nailed down) before the next revolution finds them mimicking Mussolini. Once again Garth, my apologies and no more short cuts.

#193 spaceman on 09.20.11 at 2:59 pm

Your time will come, markets ebb and flow, you gotto know when to hold em, and when to dumb em.

Just got off the phone with a friend, 76, moved to a supported care facility, loves it, but her 3BR house in Esquimalt, has been sitting empty for 4 months… not 1 offer has come in… Whats wrong, she asks….

If she had a computer, I would send her here….