Idiots

So let’s imagine you order one of my books online, and when it arrives, you discover I’ve inadvertently left six hundred, thousand-dollar bills inside (hey, it happens). Where would you rather spend that money if you wanted to buy a house, blog dog Scott asks – Edmonton or San Francisco? In fact, where is there better value?

Of course, this is hardly fair. SF has about 850,000 people, with another 6.3 million in the surrounding area. Edmonton has 785,000, with just 300,000 within two hours by SkiDoo. The average temperature in the Bay area ranges from 11 to 18 degrees. In Edmonton, it’s -12 to 17 degrees. San Francisco and area has cable cars, Alcatraz, Haight-Ashbury and the head offices of Wells Fargo, Visa, Charles Schwab, The Gap, Levi Strauss, Craigslist, Twitter, Apple, Cisco, HP, Intel, Sun Micro, Chevron, Pixar, eBay, Google, Yahoo, YouTube and Facebook. Edmonton has the Oilers, and The Brick. And a high level bridge, just like the Golden Gate, sort of.

I guess you’d expect a Bay area house to cost a lot more than one in the most northerly city in North America with a population of 1 million. And it does. But let’s compare what $600,000 gets you.

First, these few words of comparison from Scott:

As a Cross border professional my wife and I are continue to be in awe of the mentality of Canadians when it comes to real estate. Spending 1/2 my time in Edmonton and the rest in San Francisco, I can’t believe how deep we have buried our heads in the sands of fantastic debt in the great white north. Our banks, thanks to CMHC are playing fast and loose with mortgage debt in Canada.

When we go to a mortgage broker in  the US versus Canada it is like night and day. The American Banks are scared to lend you money where Canadian Banks can’t give you enough – on average the American banks will give you 20% less on your loan than you can get in Canada. This is with the same income, same amort, same 25% down low risk mortgage, plus in the US your interest is tax deductible and you can LOCK in for 30 YEARS at under 4%. Yup our lending practices are safe in Canada.

And Scott’s pretty much right. Debt’s far easier to walk into in Canada, lending regs are looser, bankers easier and loans bigger. In this country, thanks to CMHC, 95% mortgages are absolutely commonplace. Banks are allowed to give people down payments. Zero-down is everywhere. And as a consequence, Canadians now routinely take more risk, become more indebted, spend far more on housing and have created an unsustainable real estate bubble.

Remember, the average Canadian house costs $357,000. The average detached home in Edmonton sold last month for $362,897. The average American home is worth $171,500 (the lowest in eight years). The average for a SFH in Toronto in October was $751,612. The average house in San Fran is $639,000.

And here, as Scott points out, is what $599,000 buys in the two cities he shares.

In Edmonton, six hundred buys a 1950s house that four years ago so for less than $400,000. It’s a 1,400-square foot bung with all the curb appeal of a utility substation, a cheap suite downstairs and a jet tub imported from a garage sale.

In San Francisco, six hundred buys a house that was worth $866,000 at the end of 2007. It’s about the same size, and is now priced $25,000 less than it sold for in 2004. Built in 1928, it is a classic west coast villa, walking distance from Golden Gate Park. Kitchen to die for.

So, one home has risen in value by half, the other dropped by a third. One’s in a regional market dependent on volatile resource prices. The other’s in a hive tied to intellectual entrepreneurship. But in Edmonton you get a pine tree.

Americans are total idiots without a clue how to value property and opportunity.

After all, it couldn’t be us.

218 comments ↓

#1 Richard on 11.08.11 at 10:23 pm

LOL

#2 Waterloo Resident on 11.08.11 at 10:26 pm

Everyone in America is complaining that the rich are getting richer and the middle class is getting destroyed. To emphasize this point they produced this chart:

http://tinyurl.com/d84as5s

It came from this article:
http://economix.blogs.nytimes.com/2011/11/03/growing-economies-stagnant-wages/?source=patrick.net

I looked at that, and from the chart its clearly visible that Socialist economies like Finland and Denmark have citizens that have enjoyed economic prosperity while their economies have recovered.

( Darn, I’m making a mental note to myself to move to Finland or Denmark over the next 12 months ! )

Then just a little while down the chart I see that between 2000 and 2007 Canadians are the worst off of the bunch ! Our citizens didn’t enjoy ANY WAGE GROWTH AT ALL, NONE !!!!
Holly Gazola’s !

Then down at the end of the article this is what the journalist said: (( “ Of the 10 countries analyzed, Finland showed the closest relationship between the living standards of the typical worker and improvements in the overall economy. The United States was on the lower end. From 2000 to 2007, median pay increased at a quarter of the pace of output per capita. In other words, the typical American worker did not share much in the country’s growing wealth even when the economy was good.
Still, the United States was not the worst of the bunch. In Canada, median pay didn’t grow at all between 2000 and 2007.” ))

So, how come in Canada our median pay didn’t grow at all but OUR HOUSES HAVE DOUBLED OR TRIPPLED IN PRICE ????

PLEASE, TELL ME WHY ??
( Does it have something to do with DEBT ? )

#3 Eddie on 11.08.11 at 10:26 pm

First

#4 Kevin Smalchukiukchuk on 11.08.11 at 10:28 pm

Garth, I’ll tell you why Edmonton is priced hire than SFO…

1. Edmonton is the ‘City of Champions’, San Fran is not, nor can it claim to be.

http://canadabulldog.com/yahoo_site_admin/assets/images/IMG_0824.49210510_std.JPG

2. Edmonton’s economy is tied to a booming Oil and Gas industry.

3. Edmonton has one of the best malls in North America – the West Edmonton mall.

4. The North Saskatchewan river that runs through Edmonton is extremely scenic.

5. Edmonton is a World Class city that hosts numerous international events, and has a rich, multicultural population.

6. Ain’t no gays in the Chuk, unless you count the British immigrants.

At any rate,

Be careful about criticizing “The Chuck”, Garth.

They’re sensitive.

I was there in 2000 during the Commonwealth Games or something.

Some Brit journalist called Edmonton “Deadmonton” in his paper.

All hell broke lose… the Perogies went flying… and next thing you

#5 T.O. Bubble Boy on 11.08.11 at 10:28 pm

2-bedrooms vs. 3-bedrooms… TOTALLY DIFFERENT!

And, Edmonton has oil! And a giant mall! And a CFL team called the Eskimos!

#6 Aussie Roy on 11.08.11 at 10:28 pm

Aussie Update

Irrational confidence has inflated property prices so far they bear no relation to what they might rent for. A nation of speculators, their vision fixed on the gains to be seen in their rear vision mirror, have bought and bought and bought.

The rent-price ratio is a key measure valuers use in more normal times. If a property’s rent covers the mortgage, the owner is bullet proof. If she had to move away for work, renting it out would protect both her and the mortgagor.

http://www.prosper.org.au/2011/11/08/%E2%80%9Cno-visible-means-of-support%E2%80%9D/

Banks shed more jobs even as profits grow

http://www.theage.com.au/business/westpac-to-shed-jobs-as-cost-cuts-bite-20111109-1n6br.html

Retail sales drop further

http://www.theage.com.au/business/department-store-sales-in-freefall-20111108-1n5ju.html

Job market still shrinking

http://www.abc.net.au/news/2011-11-07/anz-jobs-survey/3639510

On Monday, I showed how the Victorian State Budget is likely to get hit hard from declining stamp duty receipts as house prices and transaction volumes fall.

http://www.macrobusiness.com.au/2011/11/wa-budgets-housing-black-hole/

When times get tough, agents might steal?.

REAL ESTATE franchise LJ Hooker has cut ties with the operators of its Surry Hills office after the disappearance of up to $1 million in clients’ money.

http://smh.domain.com.au/real-estate-news/lj-hooker-franchise-ended-over-lost-money-20111108-1n5gq.html

Govt seeks new revenue streams?

NEWSPAPERS, online publishers and even bloggers could be hit with a government levy to fund the Press Council in future under a reform floated yesterday by the chairman of the media inquiry, Ray Finkelstein.

http://www.theage.com.au/national/australian-media-need-parents-to-ensure-discipline-20111108-1n5lg.html#ixzz1dAeoJKRY

#7 Dave on 11.08.11 at 10:31 pm

Speaking of idiots: Those are the Occupy movement camps must be the most uninformed people I’ve ever met.

What are they protesting? Sometimes things are so obvious that one can only assume that the media tool of the wealthy elite wants to make it seem obscure and opaque so it will seem that those many thousands out on the streets enduring very uncomfortable circumstances are, instead of dedicated citizens are instead a bunch of buffoons. Forget it. Any rational person knows why they are out there.

#8 Victor on 11.08.11 at 10:33 pm

Garth two years ago I started following your blog. Since then you keep repeting yourself that prices for the real estate will go down. Since 2009 prices in the area that I’m looking to buy the house (Port Moody,BC, suburb of Vancouver) went up for at least 18%. Now I’m absolutely outpriced and can not afford to buy a house in Port Moody,BC. Is there any hope that the prices for the RE in BC will go down?

That’s not what I hear about Port Moody. Anyway, if you can’t afford to buy there, don’t. — Garth

#9 [email protected] on 11.08.11 at 10:34 pm

Look what happens when you promise investors high interest returns from 15 to 25 per cent

China property developer sentenced to death – report

http://in.reuters.com/article/2011/11/09/idINIndia-60403920111109

#10 Waterloo Resident on 11.08.11 at 10:37 pm

EVERYONE WHO IS READING THIS: Seriously ask yourself this question: If you lost your job tomorrow, and you were suddenly offered a new job in Denmark or Finland for DOUBLE your current salary, would you be able to jump at the chance to dramatically improve your life?

If you cannot because you have a mortgage then welcome to the new debt slavery. You are now a slave to your debt.

#11 TurnerNation on 11.08.11 at 10:37 pm

nothing should be worth $600k in Deadmoton/Dreadmonton.

#12 McLovin on 11.08.11 at 10:37 pm

DA #169 – I was referring to you’re complete [email protected]@HOLE response to a fellow Realtard in the last thread.

I guess he hit a raw nerve by destorying your pumping one fact at a time. Something that has been done to you by me and countless others before and after me. The difference is as a fellow Realtard in your same city it hit too close to home.

#13 Fade to Black on 11.08.11 at 10:38 pm

‘Occupy My Mortgage’ will be the next revolution for house starved Canadians. Context determines value and as far as house porn is concerned, we have collectively lost our relational moorings.

We Canuks are living in the global penthouse,partying and drinking Champagne, thinking all is just swell … thank you very much … while the Irish, Greek, Portuguese and American floors are burning below us. Th central banks are living in the basement … loaded up with diesel fuel …. ready to do their part for the biggest real estate bar-b-que in history.

We continue to have delusional prices in Urban Canada because we promote delusional values pushed by the immoral banks and their dilettantes, the fully bought and paid for political class.

Remember just a few years back when the Canukistan buck only bought 63 US imperial cents .. and the average house in Snow-land were about 200K.

We have short term memories … shackled by long term debts. Getting a serious dose of financial Alzheimer’s means we don’t reason economically anymore. The same goes for student loans.

You get the pain you deserve. Ours will be a doozy. Only a lobotomy will help with the memories. I think lobotomy’s are tax deductible, unlike mortgages.

#14 Victor on 11.08.11 at 10:38 pm

Can you tell me Garth what do you hear about Port Moody? Thank you

Crickets. — Garth

#15 Victor on 11.08.11 at 10:43 pm

Thank you very much Garth

#16 Sponge Bubble Bob on 11.08.11 at 10:44 pm

Well Scott gives it away when he states that, “the American Banks are scared to lend you money where Canadian Banks can’t give you enough – on average the American banks will give you 20% less on your loan than you can get in Canada.” The taps have been turned off in the US of A and hence the collapse in real estate prices. When the American banks were playing fast and loose, prices kept rising. The million dollar question is when are we going to see the taps turned off in Canada?

#17 Soylent Green is People on 11.08.11 at 10:45 pm

It’s certainly no small irony OccupyWallStreet originated in Canada.

“But I had no idea it would spread to hundreds of cities all around the place and become this possibility of a global mind shift.”

https://uloadr.com/u/5z7K.jpg

The Vancouver, B.C. Canada poster that started it all:

http://tinyurl.com/cre4ge9

http://www.globalpost.com/dispatch/news/regions/americas/canada/111016/occupy-wall-street-returns-canada

.

#18 Pofthek on 11.08.11 at 10:47 pm

Belgravia is near the university. I still think $600K is over priced, but you will pay a premium in this area no matter what the average value.

#19 Stupesing in Cabbagetown on 11.08.11 at 10:53 pm

#4 Kevin… The perogies…And the kolbasa!

#20 TurnerNation on 11.08.11 at 10:58 pm

The only thing in my book when it arrived was some shed Bandit fur. ;-)

(I suspect he is the ghost writer of more than a few blog entries – how else to explain all the dog pictures??).

#21 Alan on 11.08.11 at 10:58 pm

A lesson learned by many..don’t fight the tape. Garth, you been fighting the tape for a decade.

Love the blog. Just wish you would throw in the towel once in awhile.

As a side note, don’t look to Italy for a significant decline in real estate. Everytime a crisis unfolds, money heads to the hills..Tuscan hills that is. Strange but true.

#22 I'm stupid on 11.08.11 at 10:58 pm

I have a dream, that one day real estate will cost 3-4 times income in any market. That young people will realize one day they will be old. That people all over this great country wake up and begin enjoying life rather than killing themselves keeping up with their neighbors and friends. That politicians actually work for the greater good of society. That we invest in education to teach our young. That we invest in training to elevate the less fortunate rather than tear them down. That every man, woman and child are actually treated equally. I could continue but my words fall on deaf ears.

#23 Dr. WAYNE on 11.08.11 at 11:02 pm

And still given all this, home sales in the Lower Mainland increased in October by 4% over September … go figure.

#24 Boots on the Ground on 11.08.11 at 11:04 pm

Hi Garth Just got my tax bill for my Florida home today.

2012 is $2089.00 down $420.00 from this year. Assessment is $105,000.00
In 2007 they were $4898.00 Assessment was $238,000.00. Burn baby burn!

#25 Talking Cat on Banking (?) on 11.08.11 at 11:04 pm

I (bored) came across a random site on youtube, featuring a talking cat talk show discussing banking in canada (?)

http://youtu.be/6-BhFRFsyMA

wtf?

says it s from last week …….had to share

#26 bubu on 11.08.11 at 11:05 pm

I think Pofthek is right.. they sell for position value ( I also agree, it is over priced).

For $614k you can get this:

http://www.realtor.ca/propertyDetails.aspx?propertyId=10092949&PidKey=1212846841

but there are decent houses in 300-400k range which is maybe only 10% over priced but not more.

#27 CrowdedElevatorfartz on 11.08.11 at 11:09 pm

Sorry folks, BPOE is a little “busy” at the moment……..

#28 sam.i.am on 11.08.11 at 11:11 pm

The California bubble is a good example of just how badly things can go wrong. Most areas of the peninsula (jobs, prime locations) down to SJ held up ok, but the central valley really got hammered. Grittier areas in the east bay have seen massive declines. The loss of tax revenues has been devastating.

In retrospect, it couldn’t have ended any other way. The valuations were just too ridiculous. Was it Buffett who once said ‘Price is what you pay, value is what you get’. Clearly, those words were overlooked by many CA buyers. It now appears Canadian buyers are making the same mistakes.

#29 eviee1973 on 11.08.11 at 11:12 pm

Neighbourhood laugh in Calgary, the near bankrupt London at Heritage Station, partialy completed project, phase two less than 50 % sold, now has a sign up for a leasing center. Why do they not want to just sell their condos, instead of holding on to them.

#30 amazing on 11.08.11 at 11:12 pm

It is getting harder and harder be Firssstttt!

#31 Soylent Green is People on 11.08.11 at 11:14 pm

from article: A day after Ottawa offered cash to provinces to harmonize their sales taxes across the country, the few holdouts remain cool to the HST idea.

On Tuesday, Finance Minister Jim Flaherty said Ottawa was willing to offer financial support to provinces choosing to harmonize their provincial sales tax with the federal GST.

Business groups like the idea because they argue it reduces red tape and lowers the tax on investment.

***********But harmonization detractors argue it ends up costing consumers more in real terms because the GST applies to more goods and services than the provincial levy.

http://www.cbc.ca/news/story/2009/08/05/harmonization-reaction.html

#32 DaBull on 11.08.11 at 11:14 pm

Look what you can get for $650,000 in San Francisco CA.

http://www.realtor.com/realestateandhomes-detail/49-Martha-Ave_San-Francisco_CA_94131_M15469-06235

Three rules on buying real estate.
Location, Location, Location…..

#33 S on 11.08.11 at 11:20 pm

Hey, You forgot West Edmonton Mall! Now then…

#34 sam.i.am on 11.08.11 at 11:20 pm

Let’s not forget in the US there was fraud and collusion amongst mortgage brokers, realtors, and appraisers. I think most of the issues have been addressed through regulation and stricter controls. For example, appraisers must be drawn at random from some eligible pool, administered by a third party. What is the current state of affairs in Canada? Are the market makers corrupt?

#35 Eastern Canadian on 11.08.11 at 11:22 pm

Hi Garth, I know you have mentioned Victoria every now and then as a slow place for real estate activity. How about the Fraser Valley (e.g., Chilliwack). Any thoughts on that particular region? MLS shows prices are down about 1 or 2 % YoY.

Any locals care to comment?

Garth – you should also do some kind of comparison with the Aussie market. I hear they peaked in May 2010 and they’re down about 2-4% since then. That sounds typical. Places like US, Spain and Ireland fell <5% in the first year after the peak. Aussies are now debating if this is a turning point……

#36 Not 1st on 11.08.11 at 11:23 pm

Edmonton doesn’t get earthquakes and none of that tsunami junk flotilla will ever make it down the mighty north sask. Can’t say the same about SF.

#37 Anotherlowlyrenter on 11.08.11 at 11:24 pm

Slightly off topic I know, but why do the Chinese see Chinese buying as a bad thing, but the Canadians see Chinese buying as a good thing. Here’s a govt that knows what’s what:

http://www.bloomberg.com/news/2011-11-08/hong-kong-won-t-relax-housing-curbs-tsang.html

#38 taxpayer on 11.08.11 at 11:37 pm

What is the size of the lot that comes with the house in Edmonton? How much would a lot of that size cost in San Francisco?

Also, real estate in San Francisco is subject to the huge debt and pension obligations of the California and U S governments. (I don’t know the situation in Edmonton. )

#39 AA on 11.08.11 at 11:49 pm

Thanks for the blog….working on my plan….paid off my LOC ( cancelled it was 9% ..imagine that!!!)..credit cards ( cancelled …only kept one)…also finally paid off my student loans…now to get working on paying off the 178k mortgage and car….since the place costs cheaper per month than renting a similar unit didnt sell…continuing to pile up 30%-35% of household income into savings and to pay/invest in my masters degree…..if home prices continue like this and inflation continues…it actually might be time to start looking into moving out of Canada for a while..

Thanks Garth…its not easy…but i started working towards this over a year ago when i read your blog….

AA

#40 kc on 11.08.11 at 11:51 pm

I figured that you would have been talking about the present F has given the country to day? Garth, I think you have/had been warned by your old boss to lay off the attacks of the past when you wouldn’t have thought twice about telling it as it is… today you have turned into a “Harley tough guy wanna be” (hence the bike shines but you have no balls)

http://www.globalnational.com/pages/story.aspx?id=6442517234

“Warning Canada’s economic recovery is fragile and slowing, Flaherty told a business audience in Calgary he is ready to go further if conditions continue to deteriorate.”

Read it on Global News: National | Ottawa to halve EI premiums hike, miss four-year balanced budget target

And have you noticed that Christmas has been shoved down our throats even earlier this year? Not even Black Friday in the USofA and we are getting bombarded with that “go shop and spend” tune.

http://www.globalnational.com/canadians+feeling+financially+insecure+this+holiday+shopping+season/6442517094/story.html

Old news. Wrote about that earlier this week. Try to keep up. — Garth

#41 Noobs on 11.08.11 at 11:57 pm

Edmonton is a pathetic city really. I wouldn’t say that except that I have lived in Calgary, Abu Dhabi, London, Tehran, Vancouver, Fredericton, Tunis, and Dubayy.

Nowhere in the world has less planning and cognitive function been spent on arterial roadwork and planning.
They put the LRT down the middle of 111Street, when they could have simply bulldozed a trench, poured a concrete enclosure, and put it underground. I have sat up to 23 minutes waiting to cross.
This city is stupid as the the people that run it. No wonder they have the highest murder rate in the country….the mayor wants to spend all the money on another arena when he can’t even deliver the basics for a cosmopolitan environment. With the highest murder rate in the country it certainly deserves Deadmonton, and with all the impediments to movement, and the pious chastisements issued by a lame city governance, no wonder this city has more sympathy for suicide than is right.
Nothing that a few tons of C4 and one traffic planner couldn’t fix.
Tehran moves 12 million people a day without such nonsense. Maybe because Ahmadinejad has a PhD in transportation engineering and planning-traffic engineering, he learned that in the morning there are a few million people that want to get to work. If I let them, then they will get there, leaving the roads open for others.
As soon as you try to find a faster way to work in Deadmonton, these Einsteins put up another light/stop sign to stop that nonsense. This city is the worst I have been in my travels…I wish I had more positive comments, but it would probably be emotionally proactive to lower your expectations in every regard for this outpost. At least Winnipeg is only an hour from Kenora.

#42 Timing is Everything on 11.09.11 at 12:01 am

#10 Waterloo Resident

Holy crap! I was just thinkin’ that!

http://www.youtube.com/watch?v=QJ882QYzr-M

#43 Smoking Man on 11.09.11 at 12:02 am

Garth I do like your post but I wish you would drift a bit off topic once in a while.

I have a low boredom tolerance..

Perhaps you can craft words that deal with subjects like.

Hum?

How to deal with a tear jerking itchy hemorrhoid while stuck on an elevator with hot blonds.

Guy if front of you at a urinal that can’t go because he has a shy thingee.

Why woman buying purses have a need to strike different poses in front of the mirror before they buy.

Why Teachers have no comprehension of what they are really doing.

Why Drunks have erectile dysfunction and lack Vitamin B12

Come on man I’m getting board………….

#44 stealth on 11.09.11 at 12:04 am

Not much said about F and his budget miss.
Also not much about Carney and his “Global Credit Crunch Forming” message.

Maybe tomorrow night…what do you think?

#45 Junius on 11.09.11 at 12:07 am

Garth,

Your posts lately have been terrific. Really high quality stuff. Please keep it up.

#46 Timing is Everything on 11.09.11 at 12:09 am

#10 Waterloo Resident

Seriously, I would consider Denmark, Holland or Belgium.

#47 Angela on 11.09.11 at 12:10 am

If home ownership were not completely overblown and glamourized in Canada we would not all flock to this blog to read about why prices are so high and when they’re going to come down. We would look for places to live, calculate that we cannot afford to buy, settle the #$%& down and find a nice rental. Real estate will have corrected in Canada when even the people that read this blog that bemoan unaffordability are put off of buying.

#48 Wicked as it seems on 11.09.11 at 12:11 am

#13 Fade to Black on 11.08.11 at 10:3

Right on with your no BS assessment
Of the bleakness Canadian home ownership has turned into. Outside of a tourism ad this is one tough country in winter to imagine plonking down a decent lottery win for a clapboard house out on the frozen tundra anywhere.
So little vision, so much mind numbing debt!

#49 johnny5z on 11.09.11 at 12:13 am

What I can’t believe is that Canadians are doing the same stupid things that the Americans were doing a few years ago. For that matter, the Europeans too. We can see how that went. You would think the lenders would give pause. A few years ago they were saying how smart they were not to get into any of the innovative loan products. Are they carrying the loans on their own books, or is it sold to someone else? Are their put-back to the banks like their is in the US?

We have a home in Manhattan each CA with an ocean view, back yard, and temperate weather. Unbelievable that it would list at a price less than GTA or Vancouver. And it would based on appraisals we’ve received recently.

#50 NFN_NLN on 11.09.11 at 12:14 am

Edmonton is a special case. Any high school drop out with a pulse can get a high paying job as long as they’re willing to endure crappy mind numbing camp life.

#51 poco on 11.09.11 at 12:20 am

#8 Victor
Garth two years ago I started following your blog. Since then you keep repeting yourself that prices for the real estate will go down. Since 2009 prices in the area that I’m looking to buy the house (Port Moody,BC, suburb of Vancouver) went up for at least 18%. Now I’m absolutely outpriced and can not afford to buy a house in Port Moody,BC. Is there any hope that the prices for the RE in BC will go down?

That’s not what I hear about Port Moody. Anyway, if you can’t afford to buy there, don’t. — Garth
______________________________________________

18%–in your dreams—detached prices are at the same level they were in apr 09—–price movements are like a yo-yo for SFH in Pt Moody–one month up abit, the next steep decline– like October–why? very few sales —heck of a deal on some condos though
i’ld be careful about Pt Moody taxes–going higher than other cities close by and watch out for the new fire station they want to build—even though it’s needed it ‘s going to add over $100 to the average tax bill over a 10 year period
and other parts of BC have been declining for over 18 months–i thought you said you’ve been reading for over 2 years–i kind of doubt it!!!

#52 HDJ on 11.09.11 at 12:20 am

#8 Victor

Garth, I think your response to Victor was rough and disingenuous. In 2009 Victor apparently acted upon your suggestion that prices were going to fall. However, as he sat out and waited for your predicted downturn to occur, prices actually increased and now he’s unable to enter the market. “Anyway, if you can’t afford to buy there, don’t.” (Garth)

#53 City Slicker on 11.09.11 at 12:24 am

I found the video from BNN I was talking about in Garth’s previous post. These guys are saying pretty much what Garth has for a few years, in a nutshell, really:

http://watch.bnn.ca/#clip563629

Starts about the 4:40 mark.

#54 Junius on 11.09.11 at 12:27 am

#2 Waterloo Resident,

You asked, “So, how come in Canada our median pay didn’t grow at all but OUR HOUSES HAVE DOUBLED OR TRIPPLED IN PRICE ????

PLEASE, TELL ME WHY ??
( Does it have something to do with DEBT ? )”

There are no simple answers to most complex problem. However I believe the answer is more about timing than anything.

Historically Canadian house prices have followed US prices by about a 2-3 year gap in timing. There is a study on this by Merrill Lynch you can probably still find online that discusses this in depth.

When the US market began crumbling the Canadian was really just starting its ascent. However by 2008 our market began to tip and it would have fallen but for the government intervention by way of the CMHC and emergency interest rates.

The Con job of CMHC rule changes and emergency interest rates kept our bubble from popping. The massive stimulus and other factors also kept it from falling even as Canadians kept taking on more debt to pay for them. Through in our arrogance about our superior banks, never ending HAM and a host of delusion ideas on why we are different.

Suffice it to say all of these facts mean it is just a matter of time before our prices correct.

#55 Min in Mission on 11.09.11 at 12:27 am

Having visited both San Fran and Edmonton.

San Francisco, without a second thought.

#56 Van guy waiting on 11.09.11 at 1:03 am

That’s not what I hear about Port Moody. Anyway, if you can’t afford to buy there, don’t. — Garth

Since Oct 1, there were 144 sfh listed for Port moody. 21 sales. So just under 7 moi. So at 7 moi, it’s around the average for moi in the Van area.

Garth, I’m not sure where you heard what you did about Port Moody. The market is cooling, but not enough to cause panic yet.

#57 BPOE on 11.09.11 at 1:07 am

San Francisco will continue to tumble. The prices alone show it just doesn’t have the class of a city like Vancouver. I guess when unemployment is so high and jobs paying so low it was bound to happen. What an embarrasment for America. That shack in Edmonton outpricing San Francisco LOL. Of course we wouldn’t want to compare Vancouver to those poor northern Californians, they couldn’t even afford a garage in BPOE. Americans need to learn to work hard. They need to get educated and get some discipline. This is another reason foreign investors flock to Vancouver. They want to be around winners It’s not only beautiful, not only rich in money, but overflowing in an abundance of culture and world classiness.

#58 nonplused on 11.09.11 at 1:11 am

Hey Garth, speaking of idiots, did you notice gold went over $1800 again today? Not that I am going to make a pitch for gold beyond the 5-10% portion of a balanced portfolio, or GarthPlan ™ as I like to call it, but I am finding the trend increasingly worrisome.

Here’s the thing. If you take a 5 year plot of the gold price and overlay the 50 day and 200 day rolling averages, what is clear is that the 200 day trend has been in a up trend without trending down once ever since the 2008 lows. Now, it’s worrisome enough that the 200 day average has not trended down even slightly since 2008, but in fact it has continuously “curved upward”. By that I mean the uptrend continues to accelerate. You might say it’s going “parabolic”.

If that weren’t bad enough news due to what it implies, the trend in the 50 day vs. the 200 day is even worse. The 50 day has gone in surges and declines, 2 steps forward one step back. Fair enough. But it hasn’t even gotten close to breaking the 200 day trend since 2008, always staying above it. And if you don’t count the turmoil that was 2008, the 50 doesn’t go below the 200 since the start of the 5 year chart.

Even more worrisome is that the day price itself has not broken below the 200 day since 2008. And this is a line that appears to be going parabolic. It looks a lot like a dot.com, except it’s playing out a lot slower. It hasn’t gone vertical yet and is apparently a year or two from doing so.

The reason I am worried is I believe it implies that either gold is going into a bubble or the dollar is about to devalue. But if it’s a bubble, who the heck is buying? It certainly isn’t me any more and hasn’t been for years. Most people in the US and Canada are selling their gold jewellery to be melted down for cash they aren’t buying. There are videos on YouTube showing that if you take a $50 dollar stamped Canadian Maple Leaf coin (worth $1800) and try and sell it to people you run into on the street for face value ($50) they won’t buy it. Is that a bubble? Maybe the bubble is in China and India, because you won’t have trouble unloading a Maple Leaf there, and in fact you’ll probably get a small premium.

But if it’s not a bubble, the implications are very dire indeed. Get out of cash and cash derivatives like bonds now. Follow Jim Rogers into commodities of all types, oil, agriculture, metals (even steel), and maybe even REIT’s but not the Canadian home market (yet). Banks might even do well because the tide will float all boats, but I’m guessing they’ll lag, so I will continue to avoid the sector.

Anyway, plot up the chart and see what you think. You don’t need to draw any lines on this one beyond the 50 and 200 day moving averages, which most sites on the internet will do no problem. Flag patterns? Forgetaboutit. The last pattern was in 2008. Elliot wave counts? One this move the A-B hasn’t even been drawn. Trend lines? Only thing clear is we’re headed to a “power up” based on the $1900 breakout and the fact we’re breaking out again without even testing the bottom of the trend. None of that stuff is relevant compared to the 50 and 200 at this point, they are ugly up. Something is amiss in the world, and somebody knows about it, and they are taking action.

#59 tkid on 11.09.11 at 1:15 am

*raises hand* Um, my book didn’t come with the promised six hundred thousand dollar bills … are they in the mail?

#60 Crash Callaway on 11.09.11 at 1:19 am

Well my uncle Nestor who lives in the Chuk and frequently drives a big rig down to San Francisco says that place is very strange. He says that when he goes to a bar down there he can never tell if the guy he is dancing with is gay until the guy kisses him!

#61 bcpaul on 11.09.11 at 1:21 am

This is why I keep coming back, gems like this:

Of course, this is hardly fair. SF has about 850,000 people, with another 6.3 million in the surrounding area. Edmonton has 785,000, with just 300,000 within two hours by SkiDoo

…It’s a 1,400-square foot bung with all the curb appeal of a utility substation, a cheap suite downstairs and a jet tub imported from a garage sale.

If I had $400,000 in cash, the last thing I would do is buy a house in Canada

#62 Chaddywack on 11.09.11 at 1:33 am

That’s a pretty nice area of SF! I was there a few summers ago and what a cool place. Vancouver is most often compared to SF as an argument that prices never drop in Vancouver.

I had a realtor tell me once in response to my worries about the US “Well most of the US dropped but SF, which is basically Vancouver of the US has only gone up!”

Thanks for the info on SF Garth, not excuse me while I ponder selling all my worldly possessions and taking the VW Van down there!

#63 DML on 11.09.11 at 2:01 am

Half of US Mortgages Are Effectively Underwater

http://www.cnbc.com//id/45209336

#64 Gandalf on 11.09.11 at 2:10 am

I would say that I have, relative to the 99% I have a damned good personal balance sheet! Unfortunately, I am a victim of the mass financial marketers who know my excellent credit score and seem to continually bombard me with all this free credit stuff! I remember how free flowing it was pre-2008 and how it dried up pretty quick by the end of 2008. The big banks pulled in their credit lines and jacked up their rates! Even to us good creditors who had no outstanding balances on our credit lines! It was bizarre! But the past couple years, as our best banks in the world began to feel better about themselves, all of a sudden they feel flush again with credit and can’t give it away.

I called to change my monthly banking package to save a few bucks and they were all over me like a bad rash! I had three phone calls from them within two days offering me their banking services and how I could save money. When they saw I had no debt and significant assets they were prostituting themselves into offering me a 0% down mortgage? They asked how much I would like to apply for and I said $1.5 million for the heck of it and they said “no problem”. I laughed and said I was joking and that I was going to short their stock in the morning! Seriously, these Canadian Banks are f**cked!

Flaherty, Carney and the CMHC are going to go down in a ball of flames! Don’t worry about the day-to-day stats that come out, think of the big picture and have some patience. Read “It’s Different This Time” by Rogoff and you’ll realize that “no one gets out alive” as Jim Morrison once said!! R.I.P.

#65 BPOE on 11.09.11 at 2:15 am

Only in BPOE. Beautiful just beautiful

http://paul.kedrosky.com/archives/2011/10/vancouver-bidding-war-house-its-being-flipped-for-78-gain.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InfectiousGreed+(Paul+Kedrosky%27s+Infectious+Greed)&utm_content=Google+Reader

#66 @@@@@@@@@@@ on 11.09.11 at 2:16 am

Only 1 ‘First’ fail today…that’s a…uh..first

#67 Nostradamus Le Mad Vlad on 11.09.11 at 2:18 am


49ers 34, Eskimos 29 (played under Aussie Rules Football).

“Americans are total idiots without a clue how to value property and opportunity.” — Vast majority of idiots are those who firmly believe that a house is a good investment, always rising in value.

They have much to learn, and is why rebirth is a part of evolution. If one royally screws up during this lifecycle, come back and try getting it right next time!
*
#7 Dave — I don’t believe they are protesting so much, just venting their fury at the multi-million dollar bonuses that some get, while there are so many homeless and in poverty.

What does the WH do? It continually starts wars costing billions, taking money from ordinary folk and developing new WMD. Somewhere, there has to be a point when their fury plus built-up rage takes over, and civil war starts again.

Thing is, someone is using all these riots and the like, profiting handsomely from them.

#10 Waterloo Resident — “You are now a slave to your debt.” — Another great reason for renting and building up a strong cash flow, all the while staying debt free.

#13 Fade to Black — “We Canuks are living in the global penthouse,partying and drinking Champagne, thinking all is just swell . . .” — Until midnight and Cinderella is excused to go to the water-closet!
*
Long John Silver a.k.a. Peoples’ money; Berkshire Hathaway The Buffett illusion; Iceland m$m does their usual crappy job; Germany colonizing Europe (The Fourth Reich); Italy Compared to the UK, they look good; The 1% are pretty good at destroying wealth, which is the removal of money from the system. Hence, the system is collapsing; Mongolia Just as Iraq and Libya were raped and hacked to pieces, Mongolia and Iran are the next in line; Restaurant owner bans six-year-olds and under, business booms.

8:08 clip Banker coup d’etat; ECB Intervention The EU is demanding it as their banks are insolvent; China the master, EU its servant; 40 States in trouble, Perfect Storm, Citigroup learns; Chomping At The Bit Derivatives continue destroying wealth; Generational shift and Time To Worry (I have better things to do than worry>0
*
Alaska Storm coming, possily 35-ft. waves. Surf’s up! 6:48 clip “An organic farm in Nevada was having a picnic and the Authorities showed up! Thank God or we may eaten some non-GMO food. Perfectly good food, and this bitch makes them destroy it, pour bleach on it so that even the pigs can’t eat it, in a nation with rampant starvation, all because their papers are not in order!” wrh.com. Dictatorship / Police state; Bolivia US authorities not welcome; 2:23 clip Early snow in Tehran, which is precisely what the nuke power plants are for — to keep people warm, like Three Mile Island; Russia and China warn US to stay out of Iran, and War Drums; Adele doing better after surgery.

11-11-11 Is it really a conspiracy theory, or the date this coming Friday? Oblast using friends to push his agenda through; Immigration Illegal or not, it’s designed to keep the military topped up; With a friend like that . . .

#68 Marco from the bestest place on the smallest part of earth on 11.09.11 at 2:23 am

Garth,

You’re bang on! I work in San Fran (the IT Valley), study in Los Angeles and live (Rent) in Vancouver (Immigration issues).

That way I have cheap rent – $2900 would not get me a family home in the Shaugnessy of San Fran and no job in IT in Vancouver would ever pay what I get paid in San Fran (the last comparable job I saw over a year ago paid 1/3 of what I make).

I buy everything in the US and use it in Van. The folks down here know something we have yet to learn up in Canada.

Incidentally, I have meant chinese immigrants who has lived in vancouver until they could leverage their newfound Canadian citizenship to then have more favourable work permit terms in the US.

The number of Chinese flights landing in Lax and SFO is approx 20:1 in terms of volumes, and HAM comes here too… The smart HAM who understands the concepts of value for money AND high prices=high risk…

We will all learn, that’s what life does to us. The smart ones learn from the mistakes of others, the dumb ones learn from their own.

I also lives in Denmark, Sweden and did a lot of business in Finland. All three of those countries have suffered RE declines. A friend in Copenhagen has not been able to shift her place in over 13 months. She is stuck there and can’t go abroad, despite a great job opp, as the rent she’d get would not cover the high leverage mortgage she took over 4 years ago…

P.s the lowest tax bracket in Denmark is 38% and upper is over 65%. HST (called MOmS) is 25%, and all cars have a 200% duty so a CDN$ 10k car would cost $30k + 25% tax.

You have to live there to see why, when my brother visits me in Vancouver (he lives there) he considers the cost of living here cheap (except for home prices).

Same stories everywhere, just the timelines differ from place to place…

#69 Morry on 11.09.11 at 2:40 am

@victor. Port Moody is getting the Evergreen line. Put 2and2 together.

#70 new-era on 11.09.11 at 2:46 am

USA slowdown, Europe, and now china is facing Real estate reality.

Can Global new pumping substain real estate prices.

http://www.chinadaily.com.cn/bizchina/2011-11/09/content_14065197.htm

#71 stage1dave on 11.09.11 at 3:24 am

That POS slab roof must be in Old Glenora, probably on St George crescent; & I would imagine the price is reflective of land value…most of the 600K homes in Edmonton are of the McMansion variety, or in older established upper-middle class areas; with YARDS!

San Fransisco’s RE has been expensive for almost 3 decades, but anyone who’s visited (or lived there) knows why…for a larger city, it has a truly unique character & is actually visually engaging; as far as a city can be. The white-collar job situation is just a bonus!

I don’t think Edmonton’s river valley can compete with Russian Hill, & the Golden Gate bridge; but I’d rather listen to BTO all day than Jefferson Airplane.

The bridges here aren’t as pretty,but I don’t have to PAY to drive over the high level bridge…or think about an Oakland on the other side of it…or gaze at a fleet of “floating chernobyls” at anchor in Alameda…

Oh yeah, we do have the Oilers up here, but I’m a Flames fan so that doesn’t count.

#72 Foggy on 11.09.11 at 3:29 am

People who defend Edmonton over San Fran have obviously never spent any time in SF. I’ve been there on 4 different occasions and grew to love the city. It’s weather is impeccable, it’s geography beautiful and the culture is varied and hip. There are crime problems as in every large city – nevertheless I would move there in a heartbeat if I could afford it. Edmonton in the same league? Ridiculous…

#73 Tim on 11.09.11 at 3:30 am

But in Edmonton you get a pine tree, and a job, decent health care, no tea party whackjobs, no guns- or a lot less than San Fran, a more equitable city. Have you ever been to the Tenderloin area in San Fran or the Mission district? The homeless outnumber those in Edmonton by a mile.
By the way this is not an accurate depiction of real estate costs in San Fran. Do a search for apartments in a nice central area and two bedroom ones are still over half a million

#74 karlhungus on 11.09.11 at 3:38 am

Wow Garth are you ever off the mark. You took the most expensive neighborhood in Edmonton and put up a picture of what $600,000 can get you. $600,000 for 90% of Edmonton will get you a mansion.

#75 Edmonton's Overpriced on 11.09.11 at 3:42 am

I live in Edmonton, have for the past 26 years. I’ve owned a few properties over the years both a house and 3 condo’s which have all been sold and now I’m just renting. Edmonton is not that bad if you have to be here for work. It’s home for now, there’s a number of good restaurants, the river valley provides recreation and the mountains are not far but let’s get real. There is NOTHING about Edmonton that justifies the current house and condo prices regardless of what part of town! After all, Belgravia is still in Deadmonton. My God, 1-8 hours by car out of Edmonton puts you where? 1-8 hours by car out of San Fran puts you where? Northern California, LA, the desert, anywhere along the beautiful ocean, etc. Edmonton house prices should be back to the mid 1990’s levels as far as I’m concerned. Whether or not they do I don’t care, I’m here for a few more years renting until I retire and then it’s off to someplace nicer to finish out my years until I’m too old to care. To also rent.

#76 Beach Girl on 11.09.11 at 4:05 am

Both of my neighbours houses have been for sale for over a year. These are truly depressed people. The fact that they are way overpriced doesn’t seem to sink in. The parents died and they inherited them. I blew all my leaves on their properties. I am not buying bags.

I need new neighbours.

I am European, have been thinking of going to live in India. I would be a zillionare over there. I think it is the weather, got up, had to let the dog out.

I never get down, but all you hear is bad news. I thank God I am not young now.

#77 wtf????? on 11.09.11 at 4:42 am

Look, everyone knows Edmonton is a special place…didn’t Ozvaldo von Jerkoff say so in his ‘real estate action’ seminars that suckered so many Vancraphole hairdressers?

I live in a condo in Bangkok that I can buy for less then $50,000 …..prime everything….makes Vanasswipe look like Whalley. Yet……an 1800 sq ft place like this ( if one could be had) in Vanpukebucket would list at over a million.

I spent the day beside the pool….what did the average cretin in Vanhemmeroid do today. Ya….I really miss paying 50% income tax….sure I do. Bwahahahahahahahahahahahaaaa !!!!! Cause……it’s special…….timberrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr…..

#78 edmonton guy here on 11.09.11 at 4:52 am

Love the article, but will admit there’s no way that house in Edmonton will sell for the asking price. Why? Beacuse I live in Edmonton and I can really see the listing prices plummeting this fall like NO other! You get get a house that nicer, but needs some work a few blocks away f under $300,000! http://www.mls.ca/PropertyDetails.aspx?PropertyID=11101338&PidKey=846260715
The market here is really starting to correct as we see prices contracting on most property areas in all of Edmonton. In some of the out skirts of Edmonton we are seeing prices go down as much at 50% from 2007 like in Fort Saskatchewan Alberta!
In Edmonton we sit at about 20% under 2007 prices on Average.

#79 Ben on 11.09.11 at 5:20 am

ASKING $64,000 – IRVING, TEXAS

http://www.zillow.com/homedetails/1825-Puritan-Dr-Irving-TX-75061/27106804_zpid/

#80 Aussie Roy on 11.09.11 at 7:13 am

Aussie Update

Bankruptcies above GFC levels

http://www.macrobusiness.com.au/2011/11/bankruptcies-jump-above-gfc/

First home buyers return to market?.

The number of home loans to buy new dwellings fell 0.7 per cent in the month and those to build new homes also slipped slightly, down 0.2 per cent.

http://www.abc.net.au/news/2011-11-09/abs-housing-finance-september/3654614

As Melbourne housing stock on market grows, the solution is?.

The blueprint details plans to redevelop train infrastructure, build new major roads, revamp town centres, build 350,000 new homes and create jobs for 400,000 people as well as building new parks and environmental reserves.

We have a shortage?.

http://www.propertyobserver.com.au/victoria/a-new-adelaide-on-melbourne-s-outskirts-baillieu-government-s-growth-corridor-plans/2011110952270

China

Inflation eases, but what about assets prices?.

The cost of housing in China has started to decline after a two-year government campaign to curb speculation and limit purchases. Poly Real Estate Group Co., China’s second-largest developer by market value, said Nov. 7 its contracted sales fell 39 per cent from a year earlier last month. Barclays Capital estimates home prices may decrease by 10 per cent to 30 per cent in the next year.

“Without a doubt, the Chinese housing market is entering a difficult period,” Barclays’ Hong Kong-based economists led by Huang Yiping said in a Nov. 8 research note.

http://www.theage.com.au/business/world-business/chinese-inflation-falls-to-fivemonth-low-20111109-1n6kz.html#ixzz1dCoYoqj2

#81 San Fran Discount on 11.09.11 at 7:14 am

Garth, you forgot San Fran is discounted because of earthquakes,
To Waterloo
Not everyone cannot move for other reasons besides debt

I wonder if the Americans are as Mobile now as there were in 2007? Might be interesting research to support your theory about moving to Denmark.

#82 Newbie Investor on 11.09.11 at 7:54 am

#4, You forgot that if you move to Edmonton you can enjoy in the #1 Murder rate (per capita) in Canada. City of Champs all right!

#83 neo on 11.09.11 at 8:33 am

While Garth praises the equity markets resilency at every turn. I on the other hand point out it’s “irrational exhuberance” as demonstated by the only truth serum left in the global financial system—the credit/CDS/Bond markets. There has been a widening divergence of risk that Garth has ignored and I’ve pointed out, and now it is manifesting itself exactly where I said it would—Italy—10yr yield now over 7%…MUCH higher than the feared mendoza line of 6%. Garth wasted time talking about Greece (which was only a diversion) when he should have been focusing on Italian bonds, spreads with Germany and the CDS market as I wrote many times. He even censored my post on the yellow stuff because he thinks it isn’t revelant. I’m not a gold bug Garth. I don’t hoard it in a safe in my basement. I don’t think you should have more than 10-15% in your portfolio (the physical stuff not the paper ETF). At the same time it is a canary in a coal mine and when it makes a big move it is telling you something nasty is coming so you best take heed. That doesn’t mean you sell all your equities in a panic. It means equities are getting frothy and are overbought and to keep more cash on hand to take advantage of the volatility.

Italy will not go down. Europe will be contained. Next? — Garth

#84 Marc L on 11.09.11 at 8:47 am

#76 Beach Girl on 11.09.11 at 4:05 am

Both of my neighbours houses have been for sale for over a year. These are truly depressed people. The fact that they are way overpriced doesn’t seem to sink in. The parents died and they inherited them. I blew all my leaves on their properties. I am not buying bags.

I need new neighbours.

I am European, have been thinking of going to live in India. I would be a zillionare over there. I think it is the weather, got up, had to let the dog out.

I never get down, but all you hear is bad news. I thank God I am not young now.
______________

You make me laugh so much.
Your neighbors are depressed because they live next to you and no one wants to buy their homes to become your neighbor.

Please move to India. Canada would go up on the quality of life index.

Also, don’t forget that your dog will become a dinner for 6 to a hungry Indian family when you let it out in the morning to take its no2.

Have a great day Beach Girl.

#85 April Showers on 11.09.11 at 8:47 am

BPOE, I recommend you read post number #63. I have lived in San Francisco for work and now live in Vancouver. ZERO comparison. San Francisco jobs pay about TWO TIMES what the shitty jobs pay in Vancouver (so, you were wrong again on that point). That is even if you can find a job in Vancouver because all we care about is tourism. We have no innovation to the extent of cities like SF, Seattle, and Portland. They are far more educated by means of schooling and higher education than what statistics show for Vancouver. Also, they are much richer cities than what we are in Vancouver. You may only think we have money here but we have very little compared to them. Real money flocks to those cities, not Vancouver. Those are brain cities while we live in a rain city with no vision except for more green glass condo buildings to pepper every corner. That’s very boring and classless in itself don’t you think? San Francisco will not continue to “tumble” as you put it. This is a one-time comparison of a home vs. another home. That isn’t even a great area of SF where that home is located, although I would still prefer it to anything here. I own my home in a VERY nice area of Vancouver, but would move back if it were easier. But I have a family and family here to be concerned wtih. This was not a market to market comparison. SF is a beautiful American city with European flair, tremendous transportation, incredible innovation, stunning beauty and weather, and style we can only hope to have one day. We are conditioned to think we have it so well in Vancouver, and we do as far as the Canadian standard is concerned. But after having lived in both places I know which place I would call home and it does not start with a V. I also know this holds true for several of my friends who also have lived in both places and they would pick SF without giving it two moments of thought.

San Francisco receives far more international investors by 4:1 over rain city Vancouver.

By the way, Americans are more productive than we Canadians by all economic indicators, including GDP per capita. And Americans marginally beat out Canadians with IQ, so telling them to get educated and be disciplined is laughable. I don’t think you should be talking to anyone about work ethics when you practice in the field of real estate which by default makes you a scam artist.

Just because you write it BPOE it does not make it true. By your writing style alone I think you are an 11 year old boy struggling to come of age with puberty, or your are a grown adult with a panache for a second rate town like Vancouver and you haven’t left there in two decades to experience anything else. Your perspective of the world is obviously VERY limited to the readers of your posts. You should consider getting out more often because you really do keep embarrassing yourself.

I live in Vancouver as well but would pick San Francisco any day of the week over this place if only it were easier to establish residency there. Make no mistake this is the only reason we are so lucky to have the HAM coming here that we do because if it were any easier to establish residency in the US then they’d all bypass Vancouver so fast we would not know what happened. The truly rich HAM who are educated and want to offer up innovation go to the US whether you like it or not. You know it, I know it, and everyone knows it but we don’t like to admit it.

#86 April Showers on 11.09.11 at 8:54 am

#65 BPOE that really is amazing. It is amazing the article needed to qualify the gain on an annualized rate. What a crock of shit. There is ZERO gain realized until the house has sold, and it hasn’t yet sold nearly 20 days after being on the market. BPOE did you also notice the pretty little graph underneath the article that said Vancouver BUBBLE HOUSE? Yeah, maybe you should read your links better before you post them to the world. You didn’t help your case any with that article. So stupid. Stupid. Stupid. Stupid.

#87 April Showers on 11.09.11 at 8:56 am

BPOE read #68 from Marco from the Bestest Place on the Smallest Part of the Earth. That will help you get your head around a little reality.

#88 Keen Observer on 11.09.11 at 9:11 am

Garth, Care to comment on this story?

http://ca.news.yahoo.com/homebuyer-huge-bill-not-told-old-leak-133245414.html

#89 TurnerNation on 11.09.11 at 9:15 am

58 nonplused on 11.09.11 at 1:11 am

In the short term, markets trade on technicals and emotion. But in the longer term, fundementals trump all.

Fundementally gold is a shiny rock with some industrial uses. Period.
Witness the peak and crash in early 80s followed by years of nothingness.

Just wait, the gold nuts will begin a “Peak Gold” campaign soon.

#90 fancy_pants on 11.09.11 at 9:16 am

even if the example provided appears to be somewhat skewed, the picture you paint is none-the-less clear and accurate – Canada’s RE is overpriced based on historical, sustainable proportions and in comparison to our neighbours to the south who have gone through a correction already.

ps. one good earthquake and SF becomes a mess – they are due for one.

#91 fancy_pants on 11.09.11 at 9:17 am

touch wood on the post script… to keep Edmonton from getting the next big quake

#92 Aussie Roy on 11.09.11 at 9:21 am

BPOE on 11.09.11 at 1:07 am

This is another reason foreign investors flock to Vancouver. They want to be around winners It’s not only beautiful, not only rich in money, but overflowing in an abundance of culture and world classiness.

……………………………………………………………………..

Thanks BPOE for consistently proving how bizzare the RE delusion can get.

You poster boy, you….

#93 Rob on 11.09.11 at 9:23 am

I also call Edmonton home and I must concur that the Belgravia listing is just a pipe dream by the listing agent. I live very near to this house and our house on a huge lot and tons of renos would fetch mid 4’s at the most.
People here still try for boom prices but they are not selling for that, not even close.
FYi Belgravia is walking distance to The U Of A, one of Canada’s largest Universities including a major teaching hospital, the river valley is your backyard and you can also walk in a minute or two to the growing LRT.
Edmonton is not perfect and it sure can get cold but I grew up in T. And you could not drag me back. For a working Joe it is a fine place to call home and I have lived in much of Canada.
Those who look for their surroundings to define them instead of the other way around will never be happy no matter where they live.
I am a huge fan of this blog but this listing is not a good example for Edmonton…it is off by at least $150 000.

#94 NCYer on 11.09.11 at 9:27 am

Got my hair cut last night after work. Hairdresser asked how I was this past month and I said busy and fabulous. She was shocked because I asked her she was and she said it’s been so dead and awful. Business is so slow. And that people cannot even afford to get a $20 haircut.

I told her things will get worse.

Poor thing. At least she doesn’t own a home and lives with her mom.

#95 Hammer1 on 11.09.11 at 9:30 am

#76 Beach Girl
geez, it sounds like you’re protesting something..in your own sweet girlish sort of way..rudeness I think is your way…real neighbourly….

#96 OnlyTheBankersLaugh on 11.09.11 at 9:47 am

#81 “you forgot San Fran is discounted because of earthquakes”

Wow, you’re joking, right? So what’s the Vancouver discount? Richmond delta silt liquefication discount? YVR airport discount?

BPOE – keep your cheerleading down, it really makes you look foolish when you’re proven wrong. And, as to your comments on Americans, you don’t get out much, do you? Seems your hard work was taking no money down and investing in a government orchestrated debt orgy. Well, know when to take profits and you’ve done well and been lucky but to be arrogant about your good fortune, well, that’s a measure of character, right, little buddy?

OnlyTheBankersLaugh

#97 Sky on 11.09.11 at 9:54 am

RE idiots are one thing. Then you have the dangerous idiots that are rapidly turning the west into a police state. Idiots in spades! ( Watch the end and you’ll see what I mean.)

http://www.youtube.com/watch?v=-LIpAxjPt9U&feature=results_main&playnext=1&list=PLCCCD8CF63F009E9B

#98 Rob on 11.09.11 at 10:00 am

PS.
I do agree that too many people here are still spending too much debt on housing and houses are still too expensive.
On the other hand oh average wage to house price is among the most affordable in Canada and if you are a hard worker this city can be very good to you.

#99 refinow on 11.09.11 at 10:25 am

In response to #34 Sam I am

“For example, appraisers must be drawn at random from some eligible pool, administered by a third party.”

This illedged pool of appraisers has nothing to do with protecting the Canadian Banks by getting a random appraiser that is not in cahoots with the mortgage broker.. The lenders might view it that way….

It is about squeezing pricing on appraisal to force the price to rediculous lows so only the bottom feeding minimal experienced appraisers will pick up the deals.

They send a Georgetown appraiser to complete an Ancaster appraisal who has minimal experience of the area because they will complete the report and only charge $175.00 but the pool will still charge the bank/client $275.00…

Mean while the local experienced appraisers with 20 years in the business pass on the business as it it forcing pricing below profit margins…

So are the Bank’s really safer using these appraisal pools ???

#100 GTA Girl on 11.09.11 at 10:30 am

The one show on HGTV I did watch faithfully was the RE show, Selling NewYork. Realtors showed properties ranging from extravagant to medium.

The prices were only slightly higher than Toronto is presently. The series was filmed last year.

What was noticeable was the layouts of many apartments. Even the most small units were functional and lovely for reasonable prices, in different terrific Manhattan neighborhoods. Actual bedrooms that fit a queen size bed!

One episode showed a couple expecting their 3rd child, moving from a 2 bedroom Manhattan apt to a home 30minutes away. Their 2bedroom was 1,200sqft and listed for $1.mill in a good area…full eaten kitchen, 2/12 baths, living space, den all re-done.

They ended up looking at a fully restored architect owned 5bedroom home on a 1acre w/pond barn on long island for $2mill. The home had been featured in Architectures Digest, and was jaw dropping gorgeous.

All I kept thinking was $2mill would only get me a moldy Leaside cheaply done reno w/shared driveway and a family of raccoons in the attic, and a Ikea kitchen.

It’s NewYork people! NEW YORK!

We are being fleeced.

#101 eaglebay - Parksville on 11.09.11 at 10:41 am

There’s no pine tree in front of that house in Edmonton.
It’s called a spruce tree.
There’s a palm tree in front of my house in Parksville.
Really.

#102 Westernman on 11.09.11 at 10:42 am

Waterloo Resident,
Please,please,please do us all a favour and take yourself and all your Karl Marx books and move to Finland or denmark…if we get rid of enough communists like you maybe my taxes will go down.

You make enough to pay tax? — Garth

#103 young & foolish on 11.09.11 at 11:02 am

Angela #47

True … if you are willing yo rent, you can practically move to just about any neighbourhood you want! And is that not what really matters after all to your day to day quality of life?

nonpulsed #58

Gold will go up … period. Think about it. Uncertainty in Europe and all first world welfare nations, the likely continuation of money printing (QE 3 or call it whatever you want), declining corporate earnings (soon to come).

Gold is down today on European uncertainty, while the US dollar increases. Corporate earnings are near record levels. I think you need to widen your reading material. — Garth

#104 T.O. Bubble Boy on 11.09.11 at 11:03 am

OMG – PLEASE stop trying to justify Edmonton vs. SF already!

These are not comparable in any way/shape/form.

Apple alone has more cash on its books (nearing $100B)than every company in Edmonton put together.

I’ve never heard of a famous Tony Bennett song “I left my heart in Edmonton” either.

#105 Westernman on 11.09.11 at 11:04 am

I’m Stupid-

DELETED

#106 neo on 11.09.11 at 11:10 am

#83neo on 11.09.11 at 8:33 am
While Garth praises the equity markets resilency at every turn. I on the other hand point out it’s “irrational exhuberance” as demonstated by the only truth serum left in the global financial system—the credit/CDS/Bond markets. There has been a widening divergence of risk that Garth has ignored and I’ve pointed out, and now it is manifesting itself exactly where I said it would—Italy—10yr yield now over 7%…MUCH higher than the feared mendoza line of 6%. Garth wasted time talking about Greece (which was only a diversion) when he should have been focusing on Italian bonds, spreads with Germany and the CDS market as I wrote many times. He even censored my post on the yellow stuff because he thinks it isn’t revelant. I’m not a gold bug Garth. I don’t hoard it in a safe in my basement. I don’t think you should have more than 10-15% in your portfolio (the physical stuff not the paper ETF). At the same time it is a canary in a coal mine and when it makes a big move it is telling you something nasty is coming so you best take heed. That doesn’t mean you sell all your equities in a panic. It means equities are getting frothy and are overbought and to keep more cash on hand to take advantage of the volatility.

Italy will not go down. Europe will be contained. Next? — Garth

Who said anything about Italy going down? The point is the ECB will have to print trillions with a T to avoid “contagion” which will force the Fed to print trillions because as you well know this market has been trading risk on risk off for 3 plus years now. ie. USD up…stocks down…USD down..Stocks up…Printing fiat dollars isn’t “containing” anything as far as the credit markets are concerned and you know this to be true Garth. Gold traders knows this so it has been climbing again. Debt on top of debt solves nothing. Your main thesis on housing should galvanize that point. True risk has never left regardless of the head fake equities pulled in October. Manipulating markets doesn’t work in the long run. You can’t neuter CDS hedges by not allowing a credit event to take place. All that will do is induce forced/willing selling of bonds to the very nations you are trying to protect since they can’t be properly issured. We know the fund managers are desparate to rally the end of the year to make their bonuses so anything can happen but the credit markets/CDS and bond spreads cannot and will not be ignored in the final analysis. By the way, let’s see what happens when France gets downgraded before the end of the year.

#107 Waiting in Chilliwack on 11.09.11 at 11:17 am

#35 Eastern Canadian on 11.08.11 at 11:22 pm
Hi Garth, I know you have mentioned Victoria every now and then as a slow place for real estate activity. How about the Fraser Valley (e.g., Chilliwack). Any thoughts on that particular region? MLS shows prices are down about 1 or 2 % YoY.

Any locals care to comment?

Our newer areas , people moved from their $350000 homes to these 2 areas of $525000 homes but want out at a $200000 mark up.

.http://www.realtor.ca/map.aspx?&vs=VEResidential&beds=0-0&baths=0-0&minp=0&maxp=0&area=sardis&trt=2#acr:false;ac:false;baths:0-0;beds:0-0;fp:false;gar:false;pmin:0;pmax:0;rmin:0;rmax:0;openh:false;pool:false;stories:0-0;buildingstyle:;buildingtypeid:;viewtypeid:;waterfront:false;forsale:true;forrent:false;orderBy:A;sortBy:1;LisStartDate:;mapZ:15;page:3;mapC:49.09857127576118, -121.9915008544922;curView:0;curStyle:r;chkSchl:false;chkTran:false;chkPol:false;chkMed:false;chkWrk:false;chkFire:false;chkAll:false
http://www.realtor.ca/map.aspx?&vs=VEResidential&beds=0-0&baths=0-0&minp=0&maxp=0&area=sardis&trt=2#acr:false;ac:false;baths:0-0;beds:0-0;fp:false;gar:false;pmin:0;pmax:0;rmin:0;rmax:0;openh:false;pool:false;stories:0-0;buildingstyle:;buildingtypeid:;viewtypeid:;waterfront:false;forsale:true;forrent:false;orderBy:A;sortBy:1;LisStartDate:;mapZ:17;page:1;mapC:49.09427190641754, -121.96670114994052;curView:0;curStyle:r;chkSchl:false;chkTran:false;chkPol:false;chkMed:false;chkWrk:false;chkFire:false;chkAll:false

#108 Timing is Everything on 11.09.11 at 11:21 am

#105 Westernman said “I’m Stupid”

Haaa! Garth, you slay me.

#109 Kilby on 11.09.11 at 11:21 am

#25. Talking Cat.

Unusual format but pretty interesting information of the origins and connections of Mr. Carney’s new position. Conspiracy theories get started from info like this…..

#110 AACI-Okanagan on 11.09.11 at 11:28 am

Italy will not go down. Europe will be contained. Next? — Garth

lets hope you are right and they get their act together as they are too big to bail out.

We should worry more about our own finances than Italy’s. At least we can do something. — Garth

#111 Westernman on 11.09.11 at 11:30 am

Garth,
You do realize that you are taking all the fun out of this for me – don’t you?
That last post was a masterpiece of literary construction…hard-hitting,succinct,salient and to the point. It just doesn’t get any better than that.
Perhaps it was the Christ-on-a-carasel reference you took umbridge with. Anyway, try to loosen up a little.
By the way, in response to the “you make enough to pay tax” comment, remember that it is not how much you make but how much you can keep that counts.

#112 sam.i.am on 11.09.11 at 11:32 am

#99, good points. I have had two appraisals done one year apart, and both times the appraiser was very experienced (US-based). The situation may be different elsewhere.

There’s a good synopsis of the US housing crisis in Ferguson’s ‘The Ascent of Money’ Chapter 5. I’m going to re-read it tonight.

#113 Timing is Everything on 11.09.11 at 11:32 am

#41 Noobs Re: Edmonchuck: Nowhere in the world has less planning and cognitive function been spent on arterial roadwork and planning.

…Except Calgary.

#114 young & foolish on 11.09.11 at 11:33 am

I stand corrected ….

gold is down ….. today
and corporate earnings are at record levels … for now

But gold is an emotional investment (like houses), and when attention returns to US finances it will shoot back up (intrinsic value or not).

And corporate earnings are up mostly due to cutbacks, off shoring, and increased selling to now slowing emerging markets. If personal debt levels are at all time highs in most developed economies, then who is going to buy?

Earnings are earnings, dude. Figure it out. — Garth

#115 Tim on 11.09.11 at 11:37 am

Re 85
so why don’t you leave and move to San Fran? We won’t miss you…The best thing about San Fran is that it is unlike most other cities in America. 45 million Americans on food stamps and a much more polarized society.The quality of life in Canada is unquestionably better. Why else would most of us choose to stay- even if we can buy a house with cash in most American cities?

‘The quality of life in Canada is unquestionably better.’ It’s embarrassing how we keep embarrassing ourselves. — Garth

#116 arctodus on 11.09.11 at 11:56 am

Tsk Tsk Tsk….now the “smart ones” (Garth this means you to) are predicting a decade of no growth economics…..so funny how things are never really seen except in the rearview mirror.

That philosophy was appropriate for 2005-2010 time frame (and yes the factors that stopped the Alberta boom were in place in 2005)…..

World oil production flat lined in 2004-2005……the lifeblood of growth economics…..and it ain’t never coming back……so no surprise that the world economy had a severe cardiac arrythymia and flat lined back then…

Now however we are not flat lined any more….world oil production is starting DOWN the Hubbert curve…..and that spells DOOM (thats DOOM pilgrim)….

We are not in a “slow growth phase” today we are in a increasing crash phase now……and yes Canucks we are on the bobsled with everyone else.

Watch how fast things go to shit in a handbasket now boys and girls……no government official, economic guru or religious zealot will help us now (and there will be plenty of pretenders though).

#117 IMF talk about LOST DECADE on 11.09.11 at 11:57 am

How can the Canadian governent allow reckless borrowing from deadbeats when the world faces a “lost decade”? CHMC is the ONLY reason why the housing ponzi has done so well. Everyone knows it but allows the biggest housing bubble in history? How can we maintain an economy of 20% on housing? The bigger the bubble the harder the crash. Canada is in for a monster crash.

IMF chief warns world economy risks ‘lost decade’

http://www.theglobeandmail.com/report-on-business/economy/imf-chief-warns-world-economy-risks-lost-decade/article2230321/

#118 Realitybytes on 11.09.11 at 12:02 pm

#10 Waterloo Resident on 11.08.11 at 10:37 pm
EVERYONE WHO IS READING THIS: Seriously ask yourself this question: If you lost your job tomorrow, and you were suddenly offered a new job in Denmark or Finland for DOUBLE your current salary, would you be able to jump at the chance to dramatically improve your life?

If you cannot because you have a mortgage then welcome to the new debt slavery. You are now a slave to your debt.
======================
For the love of pete.

If NASA suddenly offered me a job as an astronaut on the 1st manned mission to Mars, but My wife makes me say no, does that make me her LOVE-SLAVE?

Sure. But so what? Silliness.

#119 Form Man on 11.09.11 at 12:12 pm

good post Garth……….accurate, and disturbing……

#34 sam.i.am
I can assure you, in Canada there is collusion between mortgage brokers and realtors (and home inspectors). Appraisers I am not so sure about, but I would not be surprised.

#113 timing is everything
while it is a much smaller city, Kelowna surely must rank in the top tier for unbelievably idiotic development and traffic planning…….

#120 Echo on 11.09.11 at 12:13 pm

#57 BPOE:

Wow, you’re twisted – and so ignorant.

The intellect (walking down the street alone) in a place like San Fran would zap you like a taser. (as would the class, the arts, the retail, the food, the infrastructure dance, the beauty, and the pulse). However, the weather leaves a lot to be desired for many months but then you can just drive in any direction for a few minutes to get away from the water. NorCal is fantastic that way. Sunny and warm most of the time and of course gorgeous scenery everywhere with people who love life. In Vancouver, lol, driving anywhere in cold damp weather just gets you more of it, oh, and there’s none of the above in parenthesis either.

Man, I sure hope you’re invested to the hilt in that hole. I’m not into seeing someone get wiped out but I am interested in an ego like yours, in a city as awful as Vancouver, get taken down a few thousand notches.

#121 Canadian RE House of Cards on 11.09.11 at 12:14 pm

Talk to any honest realtor (friend or family) and they will tell NOT to touch RE. In fact many Realtors from what i was told have sold their investments/flips with no plans of buying . They all know its a bubble that would be brought down with only 1% interest rate increases….Yup 1%. Who are these dummies buying into this bubble with NO MONEY?

Small rate move would spell mortgage trouble for some Canadians

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/small-rate-move-would-spell-mortgage-trouble-for-some-canadians/article2230455/

#122 Groovin123 on 11.09.11 at 12:15 pm

@ #106 Neo brilliant post, hit the nail on the head. So my question is, when does the bond market turn it’s guns on the US T-Bill? Interest rates are going to have to rise to appease bond buyers, regardless of the consequences to the economy. Further intervention will simply lead to more price inflation. Gold is at a crucial juncture here. Guess where my bets are placed?

@ Victor, I live in Port Moody and have been “eyeballing” the SFH market since 2009 for a place. Sales were brisk back then with flat prices – now they are stagnant with flat prices. Guess what comes next? Can you “afford” to wait? I can.

Garth, love this pythetic blog.

#123 wtf????? on 11.09.11 at 12:21 pm

The pigs in the union movement are supporting the ‘Occupy’ loons? Politics make strange bedfellows. If we look at the outrageous compensation packages of the unions that rape every cent out of entire ministries who then have to turn to issuing bonds to keep hospitals open because the union pigs have stolen all the money is a circular joke from hell.

And now the unions want to screw the investors who loan the money to build the hospitals and schools? Pray tell union bosses…where do YOU think the money comes from? Having already stolen 100% of the revenue collected from taxation….from a citizen who can’t afford to feed his family……you want higher taxes to make up for the losses from issuance businesses you want to shut down due to their being ‘ugly capitalists’?

Howz about we make unions illegal…jail the union bosses…..clap the civil service pigs in irons and return some fiscal sense into the taxation system? Since when do firemen, teachers, police and garbage men need to make six figure incomes? How can anyone justify paying civic service pigs seven figure pensions?

Message to Occupy Loons………you’re fighting the wrong enemy……………it’s the civic service pigs and the loons that have robbed the country of its collective compteativeness that has resulted in your poverty…..do the math…..looooooooooooooons.

Civil service pigs like cops, soldiers, firefighters, doctors and teachers? Please clarify. — Garth

#124 Echo on 11.09.11 at 12:23 pm

#65 BPOE:

That’s hilarious, thanks. I watched these conversations, and hobbed nobbed, head tilted to the side, for years. The Chinese are human beings so are as herd-like, and as capable of being ignorant, as anyone else. Could that be it? ; )

And wow, that house is ugly. Vancouverites and rabid investors from elsewhere are so conditioned to bad design in that city.

They are right about the number 4 vs. 8 and what either does to value. At least they know SOMETHING.

#125 jess on 11.09.11 at 12:27 pm

Decadence that went GLOBAL is now a lost GLOBAL decade according to the IMF.

Regarding the word “rich”replace that term and in it’s place put the financially sophisticated.
Someone educate me here on how does one go around a “rule” of 3%?.

In “Vultures Pinic “a book by Greg Palast he said that “In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.”

Is this not the same fiancial vehicle that :

Then In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a “net short” position against these securities. That is, Goldman was betting their financial “products” (Vultures Pinic)

Next I read this that the US bank Goldman Sachs has agreed to pay $550m (£356m) to settle civil fraud charges of misleading investors.(BBC)

Is is correct to replace the word “with greek “savers” who are called oligarchs?
9 Apr 2010 – Wealthy Greeks flood the prime London property market.

FT.com / Property & Mortgages – Foreign interest boosts prime …www.ft.com/cms/s/2/28911354-43f1-11df-9235-00144feab49a.htmlYou +1’d this publicly. Undo

Misha Glenny Discusses McMafia – YouTube

http://www.youtube.com/watch?v=N65h0N6L-bw
19 Mar 2008 – 2 min – Uploaded by rhgweb
A riveting, original and comprehensive account of international crime and a brilliant critique of globalisation’s dark side …

#126 oslec on 11.09.11 at 12:28 pm

#57 BPOE

HAHAHAHAHAHAHA!!!!!!

Webster’s definition of HUBRIS=BPOE

#127 Echo on 11.09.11 at 12:32 pm

#85/86 – APRIL SHOWERS:

Wow! Welcome! : ) You go!

Lookout BPOE, you’ve got 2 truth tellers with intellects (gasp) and on the ground experience, lots of it, to contend with.

#128 Canadian RE House of Cards on 11.09.11 at 12:33 pm

Good find City Slicker
found the video from BNN I was talking about in Garth’s previous post. These guys are saying pretty much what Garth has for a few years, in a nutshell, really:

http://watch.bnn.ca/#clip563629

Starts about the 4:40 mark.

#129 Van guy waiting on 11.09.11 at 12:42 pm

“it’s definitely different here”

They say “gay”, we say “eh”
They say “soda”, we say “pop”
They say “skull cap”, we say “toque”

They say drop interest rates, we follow. What’s the result for both RE markets? Not a good comparison.

#130 Peakoilist on 11.09.11 at 12:45 pm

#102 Westernman
I think you have this fantasy about living in the wild west..can you imagine a society without government and taxes…wow…I’ll show you a place that has no order and civility.
Remember, our founding fathers wrote in our Constitution that we will maintain Peace, Order and Good Government. well, good government unfortunately requires money.. Canada has been and hopefully will remain the envy of the world because we have good government. Can we all of a sudden do it on the cheap. Maybe so, but In a few years we will gaze around and be staring at a slum..and then saying, what the hell, we pissed it away. You have to pay to have quality..applies to clothing, autos and excellent nations.

#131 Peakoilist on 11.09.11 at 12:49 pm

#118 Realitybytes
Waterloo resident is totally correct on this one. Garth has been talking about folks becoming tied to homes they won’t be able to sell for ages now..are you not paying attention to Garth? We have a refresher course coming up that I don’t think you should miss..:)

#132 Timing is Everything on 11.09.11 at 12:49 pm

About 12 per cent of Canadian mortgage holders would be challenged if their rate went up by less than one percentage point, a report from the Canadian Association of Accredited Mortgage Professionals – CBC

http://tinyurl.com/cagj5ke

More than enough to sink the market. — Garth

#133 Westernman on 11.09.11 at 12:51 pm

Arctodus,
You have it right, this is truly what is behind the “slowdown”
Energy (cheap energy) thats oil kids… is getting harder and harder to find and extract. Our economy and way of life is built on ever-increasing supplies of cheap,abundant energy (thats OIL kids). When that starts to go then the center will not hold…so to speak.
The Walt Disney mentality will laugh and call people who realize this reality names but in ten years time check back and see who called the future correctly.

#134 Westernman on 11.09.11 at 12:57 pm

Peakoilist,
Since you enjoy being financially raped by socialist do-gooders so much why don’t you pay my share too? I’ll keep my money and spend it my way and you can trust some scumbag in a government office to spend it in your best interest and we’ll see who comes out ahead.
Don’t like that idea much do you? Don’t blame you-I’ll be far better off in 5 years time than you will.
Keep trusting the sociopaths in Ottawa chump – you will get your reward in the end…

#135 jess on 11.09.11 at 1:04 pm

Doesn’t stuff like this make interst rates go up and provincial tax bills to fight these “wolves”

Cybercrime: is it out of control?

Fidelity National Information Services Database Hacked: $13 million …www.teamshatter.com/…/database…/fidelity-national-information-ser…Cached
You +1’d this publicly. Undo
30 Aug 2011 – FIS admitted that there had been a breach in May 5, but security researcher … In the database they found each debit card customer’s balances. …

FIS is one of the biggest providers of technology and card services to the banking industry worldwide. Unsurprisingly, cyber security is among its top priorities.

DarkMarket: CyberThieves, CyberCops and You
by Misha Glenny
I referred to a recent cybercrime case in Calgary, in Alberta, Canada, in which a cyber gang had hacked into the computer system of a company that provides pre-paid debit cards. These are familiar overseas and also offered by some British banks, aimed at young people and those who can’t get credit through the normal channels.

However, Wired got its hands on an affidavit submitted with the Canadian court handling the hacker’s case, signed by Darren Hafner, a detective with the Calgary police. The document reflects the extent of Tenebaum’s cybercriminal activities and names several U.S. financial institutions targeted by him.

The U.S. secret service has linked the Israeli hacker to data breaches that occurred during January 2008 at OmniAmerican Credit Union of Fort Worth, Texas, and the other against Global Cash Card in Irvine, California. Other two similar incidents dated May 2008 that affected Symmetrex, a Florida-based transaction processor, and 1st Source Bank in Indiana were also attributed to him.

According to the authorities, these attacks were part of a larger global operation. Tenebaum was hacking into the networks obtaining unauthorized access to their ATM databases, from where he extracted credit card information and made changes to bank accounts. The details were then passed on to accomplices in foreign countries that created fake cards that were subsequently used by “money mules” to withdraw cash from ATMs….
The affidavit mentions a total of $10 million in losses, but the damages reported by the affected U.S. financial institutions only add up to about $4 million. It’s not clear where the rest come from, but in another IM session the hacker allegedly told one of his foreign accomplices that he had earned between “350 – 400” (thousands of dollars or euros) in less than 24 hours from the Symmetrex hack.

If found guilty of all charges, Tenebaum risks a very lengthy prison sentence, but he is not the most proficient fraudster out there. A November 2008 data breach at the RBS WorldPay payment processor revealed probably the most complex credit card fraud operation ever instrumented – $9 million were cashed out from 130 ATMs, located in 49 cities across the globe, during a 30-minute window, using only 100 compromised cards that had their limit raised by the hackers.
http://news.softpedia.com/news/RBS-WorldPay-Security-Breach-Earns-Fraudsters-9-Million-103719.shtml

http://www.heartlandpaymentsystems.com/

Heartland Payment Systems, a payment processing provider based in Princeton, N.J., has disclosed that the security of its network has been compromised by unknown attackers. During a recent audit malicious applications intercepting and stealing transaction data have been found installed on the company’s systems.

The company is considered to be the sixth-largest payment processor in the U.S., and handles an estimated 100 million transactions every month. The provider is processing payments for over 250,000 mostly small and mid-size businesses and merchants across the country.

#136 Ron on 11.09.11 at 1:08 pm

Garth, following your theme of idiocy, “……Paul Krugman weighing in in his New York Times blog:

“I believe that the [European Central Bank] rate hike earlier this year will go down in history as a classic example of policy idiocy. We would probably still be in this mess even if the ECB hadn’t raised rates, but the sheer stupidity of obsessing over inflation when the euro was obviously at risk boggles the mind. “

#137 bee foot on 11.09.11 at 1:11 pm

Perhaps US banks are afraid of the lock in 30 years type of mortgages while the mortgage interest rate risk of canadian banks is typically in the 5 years mark?

#138 Tamsen on 11.09.11 at 1:16 pm

Re: Not 1st on 11.08.11 at 11:23 pm “Edmonton doesn’t get earthquakes and none of that tsunami junk flotilla will ever make it down the mighty north sask. Can’t say the same about SF.”

Actually, Edmonton does get earthquakes.

http://www.epl.ca/infofile-detail?subject_detail=Edmonton%20-%20Earthquake

#139 stage1dave on 11.09.11 at 1:19 pm

After reading the above comments, & looking for an excuse to NOT go to the shop this morning; I offer the following: (in no particular order)

1) Edmonton has the WORST traffic flow I’ve seen in a major city…because all the traffic engineers have moved here from Saskatoon? (Where nobody is in a hurry to get anywhere; there’s a reason why ‘toon has more restaurants-per-capita than anywhere else in NA)

2) Much more “blue collar” than Calgary (corporate) & a better working environment for tradesmen. Btw, once you get those “trails” figured out in cowtown it ain’t so bad…just confusing as hell to out-of-towners. At least there isn’t a “stoplight” or “60 km” speed-trap-fishing-hole every half mile!

3) Which may figure into this point: this is the ANGRIEST city I’ve ever lived in…what is everyone so PO’d about? Bad traffic management? High insurance rates? Photo radar? 400K working-man’s bungalows? Atco gas surcharges? The weather? That the Oilers missed out on Iginla? JHC, they didn’t take Messier till the third round!

(I’m immune from this rush-hour lunacy btw; after taking out all of my frustrations beating up on old cars during the day, I’m enjoying a relaxing cigarette on the way home watching people with a death-grip on their steering wheels & murderous intent in their eyes)

4) Edmonton has the BEST car scene of any city I’ve ever lived in. Varied clubs, many knowledgable people & collectors, several WORLD CLASS restoration & rod shops, lots of parts & enthusiasm. Big plus…

5) West Ed mall is far enuff away that I don’t have to deal with it…went once to see Airborne, & ran into the lead singer…he couldn’t find the bloody bar either…& he was playing there! Nothing but a multi-dimensional WalMart, but at least the customers are wearing something other than NASCAR apparel…

6) There’s like ONE serious sportcard shop in this town…WTF? I’ve been reduced to trying to complete my childhood OPC collections over the internet. There’s more action in Saskatoon, for cryin’ out loud…TG for ebay!

#140 Ronaldo on 11.09.11 at 1:30 pm

http://www.openhousevernon.com/detail.php?id=6215

A house like this one back in summer of 2008 would have been asking between $390,000 to $420,000. Now, $279,000. In 2005, about $150,000. Housing, except for 2009 for a bit, has been on a downward slide and has a lot further to go before it becomes affordable again. Welcome to the world of real estate.

#141 TaxHaven on 11.09.11 at 1:37 pm

The globe interviews…a real estate agent! And comes to the conclusion that THE CANADIAN ECONOMY IS STRONG and HOUSES ARE NOT OVERVALUED! And “new home building hasn’t been explosive, says the talking suit…

Some surprise. Pump pump pump pump

http://www.theglobeandmail.com/report-on-business/video/video-canadian-real-estate-overvalued-or-quality-driven/article2228955/?from=2230455

#142 Blacksheep on 11.09.11 at 1:37 pm

Nonplused # 58,

Started with,

“Hey Garth, speaking of idiots, did you notice gold went over $1800 again today? Not that I am going to make a pitch for gold beyond the 5-10% portion of a balanced portfolio, or GarthPlan ™ as I like to call it, but I am finding the trend increasingly worrisome.”

Ended with,

“None of that stuff is relevant compared to the 50 and 200 at this point, they are ugly up. Something is amiss in the world, and somebody knows about it, and they are taking action.”

Whatever you do, make sure you have a minimum 90-95 % in anything else.

After your excellent analysis, does this plan still sound reasonable?

take care,
Blacksheep

#143 Dave on 11.09.11 at 1:47 pm

Ok, so Canda is delusional. The real estate market is so far overvalued that the slightest tip will send us tumbling. Yes, I know Garth said that it will be a slow burn.
My question is: what will happen to CMHC when claims swamp assets. Is the CMHC a bottomless pit? Does it have a limited supply of reserves? Is the federal government on the hook for any shortfalls? Will we all pay the price at the end of the day?

#144 bill on 11.09.11 at 1:52 pm

#113 Timing is Everything on 11.09.11 at 11:32 am

#41 Noobs Re: Edmonchuck: Nowhere in the world has less planning and cognitive function been spent on arterial roadwork and planning.

…Except Calgary.
or Vancouver…
the axing of the Fraser Valley’s two track interurban passenger train in the late fifties must be some kind of record for myopia.
imagine from downtown Vancouver at Howe and Davie you could be in Chilliwack in about an hour and forty minutes .

#145 Ronaldo on 11.09.11 at 1:59 pm

#50 NFN_NLN – “Edmonton is a special case. Any high school drop out with a pulse can get a high paying job as long as they’re willing to endure crappy mind numbing camp life”

You will also find those same high school dropouts with a pulse working alongside men/women with University degrees working in those same camps knowing that in a few years and a bit of sacrifice (not that much), they can earn more than they could have with that piece of paper that they weren’t able to find work with.

I personally know of individuals with Masters in Economics working as Operators in the coal mining industry and driving those monstrous pieces of equipment and “lovin it” and making well over $100m per year. I say, good for them.

#146 Blacksheep on 11.09.11 at 2:05 pm

TurnerNation # 89

“Witness the peak and crash in early 80s followed by years of nothingness”

I agree 100%,
as soon as Bernanke turns into Volcker,
and raises rates 1%,
until then, let her ride.

take care,
Blacksheep

#147 r on 11.09.11 at 2:13 pm

“That is even if you can find a job in Vancouver because all we care about is tourism.”

that’s funny. i was under the impression all we care about is real estate. unless of course you are referring to HAM real estate tourists being air dropped.

#148 Ronaldo on 11.09.11 at 2:15 pm

#58 nonpulsed – gold will continue its slow upward trend until such time as paper money ceases to be created. I don’t expect that to happen anytime soon. However, I would choose silver over gold simply because its an industrial metal and it gets used up. With the increased demand for the stuff in places like India and China, there will come a day when there will not be any physical silver to be had. (as what happened in 2008) There will, however, be plenty of paper silver out there to purchase but when companies who use silver in manufacturing suddenly realize that they can no longer get the stuff, prices will rise dramatically. The physical supply will be what determines the final price, not the paper supply. Just my thoughts.

No commodity, including precious metals in any form, will ever replace existing currency. — Garth

#149 Devil's Advocate on 11.09.11 at 2:32 pm

I can assure you, in Canada there is collusion between mortgage brokers and realtors (and home inspectors). Appraisers I am not so sure about, but I would not be surprised. – #119Form Man on 11.09.11 at 12:12 pm

Really? Are you quite sure? Do you have evidence of such collusion and if so have you, done as you should and, reported it to the authorities? If not I encourage you to do so…. implore you to do so as it is just such practice which gives our industries a bad name.

We are self-policing to a large degree but rely upon the public to report violations against their interest so that we may deal with and expel if necessary those less scrupulous from our ranks. If you are not a part of the solution you are a part of the problem. If you are so sure and have evidence report it. Otherwise you are merely slandering the reputation of an industry not unlike your own.

Or was it that you saw such “collusion” committed to your benefit and chose to turn a blind eye if not encourage and participate in it? Just asking for if you indeed are so sure you must have proof you can provide and if that is so I have to wonder why you are not doing something about it.

Do you have proof Form Man? Or is it nothing more than a bare-faced slanderous remark?

#150 Naveed on 11.09.11 at 2:44 pm

A house is worth what the buyer can pay. I lived in Edmonton and people can really afford with cheap intrest rates. Edmonton is much much better than SF.

#151 hehehe on 11.09.11 at 2:51 pm

to #84 Marc L on 11.09.11 at 8:47 am

re your comments on Beach Girl….thx for the laugh….was thinking the same thing :)

#152 Watchtower Willie on 11.09.11 at 2:51 pm

Update on Europe folks. From today’s Globe and Mail. Here what Christine Lagarde, the former French finance minister had to say on the situation in Europe,

“The continent is in deep trouble, and it could be pulling the world down into a long depression with it, if drastic measures aren’t taken.

And, perhaps symbolically, she had to go halfway around the world to say it.

“The global economy has entered a dangerous and uncertain phase,” she told a Beijing audience in a major speech. Adverse feedback loops between the real economy and the financial sector have become prominent. And unemployment in the advanced economies remains unacceptably high.”

She concluded: “If we do not act, and act together, we could enter a downward spiral of uncertainty, financial instability, and a collapse in global demand. Ultimately, we could face a lost decade of low growth and high unemployment.”

Buckle up fellow bloggers, these be interesting times we all live in…

http://www.theglobeandmail.com/news/world/worldview/as-europes-leaders-keep-mum-the-unelected-speak-up/article2230709/

Relax. Her audience is (surprisingly) not this blog, but policy-makers in Italy. Hyperbole and exaggeration are weapons. — Garth

#153 Van guy waiting on 11.09.11 at 2:55 pm

Garth,

I’m looking to buy in North Delta in the near future. In the last 10 years, sfh has gone up 110% here. That’s less than many other surrounding cities and burbs. No HAM here and no condos to flip. Currently sfh is sitting at 5 moi. Since there hasn’t been crazy gains here, could this be a safer place to buy a home?

No. — Garth

#154 disciple on 11.09.11 at 3:14 pm

I didn’t know Beach Girl could play six-string:)

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

#155 Robert Dudek on 11.09.11 at 3:17 pm

So, how come in Canada our median pay didn’t grow at all but OUR HOUSES HAVE DOUBLED OR TRIPPLED IN PRICE ????

The dominance of neo-liberal economics.

What does that mean? — Garth

#156 McLovin on 11.09.11 at 3:23 pm

Hey DA,

Spin this:

From Royal Lepage – Kelowna area stats

Median Home price decline from peak -11.4%
Peak April 2008
Time since peak apprx. 42 months
Return per month since peak -0.27%

Median Condo price decline from peak -15.3%
Peak Jan 2008
Time since peak apprx. 46 months
Return per month since peak -0.33%

Wow this is a healthly market that is misunderstood and “not as bad as everyone thinks”

I am waiting breathlessly for your reply.

PS – Don’t try to deflect it by saying “Oh the actual peak was in Dec not Jan” Focus on the message.

#157 Van guy waiting on 11.09.11 at 3:26 pm

#150 Naveed on 11.09.11 at 2:44 pm
A house is worth what the buyer can pay. I lived in Edmonton and people can really afford with cheap intrest rates. Edmonton is much much better than SF.

And Interest rates in SF is even lower than Edm. Thus, nobody buying in SF.

A total of 6,749 new and resale houses and condos sold in the Bay Area in September. That was almost six times the 1,170 sales in Edmonton. So much for ‘nobody buying in SF.’ — Garth

#158 Devore on 11.09.11 at 3:26 pm

#88 Keen Observer

This story is repeated across Canada every single day, and the comments section is a veritable cornucopia of the joys of bubble home ownership.

#159 Grimbot on 11.09.11 at 3:27 pm

Acknowledgement by a group representing mortgage providers that many Canadians are at risk with their mortgages:

http://finance.sympatico.ca/home/sizable_minority_of_homeowners_face_mortgage_risk/9001f5eb

#160 Marc L on 11.09.11 at 3:30 pm

#151 hehehe on 11.09.11 at 2:51 pm

to #84 Marc L on 11.09.11 at 8:47 am

re your comments on Beach Girl….thx for the laugh….was thinking the same thing :)

________________

You are welcome.

Stay tuned for a tongue lashing.

#161 rana on 11.09.11 at 3:38 pm

#123 wtf

Have to respond to your crazy rant.
If you think that cops and other civil servants make six figures- your completely wrong. They do once they have to put in ++ over time that most don’t want to work anyway.
And if you are complaining about how much money they make then your obviously are not making as much- if you were smart enough to either do the job or do the work needed to become a civil servant you would have and not be complaining about how much money they make.
If you want to make that kinda money- then slap a gun on your belt, have everyone call you a pig and get sh*t on by everyone from the media, their superiors and even you who will eventually need to call 911- then tell me they don’t earn their living.

#162 Form Man on 11.09.11 at 3:45 pm

#149 Devil’s Advocate

No proof. Heresay only. No, we don’t directly benefit from mortgage brokers because our clients are retired cash buyers (I have already mentioned this many times, check your comprehension meter….you are suffering gaps again ). Great to see you back in the land of delusion again !

#163 Van guy waiting on 11.09.11 at 3:45 pm

http://m.cnbc.com/id/45215937

Free BMW with purchase of a condo.
In 2009, polygon was giving a Mercedes with a purchase of a townhome in Richmond.

#164 sam.i.am on 11.09.11 at 3:49 pm

Ascent of Money Video
http://video.pbs.org/video/1174144492#

Around 9 mins in, substitute ‘granite countertops’ for ‘built in ironing board’ …hilarious.

#165 Devil's Advocate on 11.09.11 at 3:50 pm

“If someone is going down the wrong road, he doesn’t need motivation to speed him up. He needs education to turn him around.” – Jim Rohen

#166 Beach Girl on 11.09.11 at 3:56 pm

Well looks like the OCCUPIERS are going to have to go back to Mommies basement. I understand they are upset. But that did not accomplish much. I bet they are relieved they have an excuse for not sleeping in the snow.

And Marc, I am very nice person. But it is true that all of my neighbours have moved away or trying to. I just thought they ran out of money.

#167 Van guy waiting on 11.09.11 at 3:59 pm

A total of 6,749 new and resale houses and condos sold in the Bay Area in September. That was almost six times the 1,170 sales in Edmonton. So much for ‘nobody buying in SF.’ — Garth

Its still a slow market in SF. Average sales for Oct since 1988 is 8644 units. Population is 8-9 times Edm.

So what? Your statement is still bunk. — Garth

#168 Ron on 11.09.11 at 4:01 pm

Relax. Her audience is (surprisingly) not this blog, but policy-makers in Italy. Hyperbole and exaggeration are weapons. — Garth

Perhaps also a warning to China of the consequences if they don’t participate in the EU bailout.

#169 Peakoilist on 11.09.11 at 4:05 pm

#134 Westernman
ok, I’ll take the bait and be the civilized one.
I agree with you that we don’t want the taxation of Scandinavia, but there has to be a happy medium in order to live in a country such as we have. that was really my only point. Infrastructure and systems do have to be maintained and it costs money, so who will pay?
As far as communism goes, I don’t think you have a clue what it’s really like. I suggest that you take a leave from your job and live in Cuba for a few months.
Living under totalitarian control, where neighbours squeal to the authorities about the misdeeds of their neighbour. Having your food and toiletries supplied by the government. (1/2 bar of soap, 1 lb of rice and beans per month).no right to own private property and no access to internet or foreign reading material of any kind. I know this because I have Cuban friends who escaped this tyrrany. They are also not allowed to leave their country without government approval.
So, is Canada even remotely close to that reality?
Light years away, not even close.

#170 Echo on 11.09.11 at 4:07 pm

#132 Timing:

You may want to take a couple of things into account:

1) The observation is based on supposition due to the fact that there are no facts to back up supposition – because it’s a supposition.

*This one is especially entertaining:
“their financial capacity will have increased and the amount of mortgage debt will be reduced.”
What? They stopped borrowing, using their credit cards, and generally living a life of keeping up with the Jones’? Wow! lol Oh, and they also had a principal that just loved to move lovingly downward with those payments, but of course! ; )
And btw, the Bankruptcy, Banking, 3rd Party Collection, and Debt Restructuring industries are already starting to bust at the seams. Gee, that’s a head scratcher. What? You didn’t hear that in the media? (it’s a “gasp” kind of day, lol)

2) The CAAMP is FOS. (Scroogle FOS if you’re out of touch) I think one could possibly call it a conflict of interest?

If you’re going to be this naive darlin’ you should do something about that, like, get your head out of the sheep’s a** in front of you and break from the pack.

***I’ve saved the best for last. : )

The “vast majority” of American homeowners didn’t stop making their payments so didn’t go into foreclosure. Hmmm….. I guess Canada will be just fine then. ; )

#171 613 Happy where I am on 11.09.11 at 4:07 pm

My great aunt, who was born in Boston, taught school in Edmonton before she got married. After the death of her second husband, she moved to Frisco just after WW II, and met her third husband… While she was still in Edmonton, she and her husband (not sure which one) were forced to sleep in a tent through the cold winter because of a TB outbreak.

Once she moved to Frisco, she had no intention of moving back… the weather was a primary factor…

If I had to choose, I would pick Frisco over Edmonton anytime! I love the city and the location… only negative is that the ground shakes once in a while…

#172 Peakoilist on 11.09.11 at 4:08 pm

#134 Westernman
I also wanted to assure you also that Cubans pay 0 taxes and own nothing. Their country is a run down slum in the towns and cities. All of the once gorgeous architecture is crumbling.
The resort areas and beaches that Canadians see are beautiful, not representative of the reality.

#173 Form Man on 11.09.11 at 4:09 pm

#165 Devil’s Advocate

good quotation. it exactly pertains to you, and it is the purpose of this blog to educate the deluded bubble deniers such as yourself. well said ! , and good luck getting yourself turned around !

#174 Peakoilist on 11.09.11 at 4:17 pm

#133 Westernman
Right on !..but do you think Big Oil should be taxed their fair share?

#175 echo on 11.09.11 at 4:21 pm

This is what a “vast minority” looks like:

http://www.fdic.gov/about/comein/files/foreclosure_statistics.pdf

#176 Johnny on 11.09.11 at 4:29 pm

I am investing 400.00 a month into TD Cdn Index, TD US Index and TD INTL Index.

I would like to put some money into bonds/preferred and real estate Reit’s. Any suggestion for an Index fund of ETF for bonds and preferred shares. Should these be outside my main trading account.

#177 bigrider on 11.09.11 at 4:30 pm

All the Italian builders that build condos and houses here in the GTA gotta move back to Italy and start a condo/ RE boom there.

The Chinese will arrive in Rome by the hordes, much like here and save Italy from it’s fiscal problems through there obsessive house humping

#178 Westernman on 11.09.11 at 4:47 pm

Peakoillist,
No, I don’t think any encumberances should be placed on organizations that are finding,recovering and refining the lifeblood of modern society. That would be like cutting off ones nose to spite ones face.

#179 Stevenson on 11.09.11 at 4:49 pm

We keep on talking about topics of how the Canadian RE won’t hold up since 2-3 years ago. Well guess what whoever listened has been missing out = fact. Whoever keeps on choosing to see what they want to and believing that it’s all coming to an end soon = speculative. Who’s the gambler again?

#180 Renting in Sherwood Park (Sold in Edmonton) on 11.09.11 at 4:49 pm

Well i’ve lived in Edmonton for most of my life so here is my two cents.

1. Someone had mentioned that prices here are 20% below the 2007 average. I’ve been keping my own stats and i would say it is only 10%.

2. Someone compared Edmonton to Calgary and mentioned how bad the traffic is in Edmonton. Edmonton is an older City than Calgary and more of it is based on the old grid system. The planners here have not done a good job fixing traffic congestion but Edmonton cannot solve everything by freeways and overpasses like Calgary can.

3. Crime is everywhere. There are “crime ridden” neighbourhoods in Edmonton, Calgary, Vancouver and San Francisco. Don’t see the point in these comparisons.

4. It is too cold in the winter which is too long here but the constant sunshine helps. Anyone who says it doesn’t is lying.

5. This city doesn’t and will never have as much to offer as San Francisco. But to say Calgary, Saskatoon, Winnipeg or Hamilton has anything more interesting is a pipe dream. Edmonton is in a bad geographical location. Calgary is 1 hr from the mountains and we are 4 hours away but are the cities really that much different? You’re not going to see the New York Philharmonic in either city.

6. Yes the mall sucks i agree. People here value a mall over the river valley.

7. The thinking here is definitely slow and cautious and everyone has the “not in my backyard” attitude, the worst deterrent possible to anything that would help this city.

8. Yes Kelowna is more beautiful in terms lakes, scenery and weather but what does the City of Kelowna really offer? It is all location and not the City itself.

I once knew a young engineering student that wanted to move to Vancouver. It would basically be a transfer from the main office of a major engineering firm in Edmonton to the Vancouver office. The first words out of the Vancouver office were “don’t expect the same kind of pay you’re getting in Edmonton”. The wage cut is significant moving to BC.

I also knew a soon to be retired engineering professional that always travelled to Kelowna and i asked why doesn’t he simply move there. He told me that it would be too expensive to live there and the health care was subpar to what he was receiving in Alberta adn would never move there.

Too many cons to move to BC from Edmonton.

From my many trips to Europe, i flew back to Edmonton via Calgary and sat next to a Finnish oil company employee. He had mentioned that he has travelled to many North American cities. I told him that sounded like fun visiting all these different cities with different things to explore. He said that it was all the same to him and very boring. Every place was packed together little homes and skyscrapers. I agree with him.

Just sayin.

#181 Westernman on 11.09.11 at 4:49 pm

Just a general note on the edmonton/San Fran debate…I’ve been to both cities and anyone who would rather live in Edmonton over San Fran is certifiably insane…period.

#182 Tony on 11.09.11 at 4:52 pm

From what i’ve seen on mls about 300 large will get you the house in the picture in Edmonton. In the northeast part of Edmonton it’s very rare to see any house listed above the $500,000 mark. The selling price on a listed half a million dollar home today would be about $400,000 or less unless you wanted to wait the rest of your life to sell it.

#183 Timing is Everything on 11.09.11 at 4:56 pm

Echo said – “…get your head out of the sheep’s a** in front of you and break from the pack.”

Echo, what’s the matter? Your rubber boots and Velcro are still in the barn, right where left them.

Garth, is this a fetish site?

You just figured that out? — Garth

#184 jess on 11.09.11 at 5:00 pm

westernman

If socialists are “do gooders” than how come it took so long for rape to be seen as a crime against humanity?

Fish market Occupiers
If you read about the brave women of Liberia Socialism was the last thing on their minds more like fedupism.

http://www.allgov.com/US_and_the_World/ViewNews/10_of_12_Supercommittee_Members_Received_Contributions_from_Foreign_Lobbyists_111109

#185 dibbsy on 11.09.11 at 5:04 pm

Heaps more places in Brisbane, Australia when you run out of stock in Toronto guys!

Just check out this beauty;
http://www.realestate.com.au/property-house-qld-gordon+park-107792051

It’s even made of wood, and we all know that stuff doesn’t grow on trees any more!

#186 Tony on 11.09.11 at 5:06 pm

#26 bubu on 11.08.11 at 11:05 pm

The people in Edmonton pay a fortune for a newer house for some unknown reason beknowst to the rest of the country. Older houses are much better built that the newer ones yet people have some sort of a mental block when it comes to buying an older house. Some sort of unknown taboo.

#187 Westernman on 11.09.11 at 5:10 pm

Jess,
The very last thing I would want to read about or have the slightest interest in would be ” the brave women of Liberia ”
Perhaps you were trying an attempt at humour?

#188 Devil's Advocate on 11.09.11 at 5:17 pm

#162Form Man on 11.09.11 at 3:45 pm

#149 Devil’s Advocate:

No proof. Heresay only. No, we don’t directly benefit from mortgage brokers because our clients are retired cash buyers (I have already mentioned this many times, check your comprehension meter….you are suffering gaps again ). Great to see you back in the land of delusion again !

Nice deflect Form Man!

But… the question, as clearly as I can ask it so you might better understand it, is;

“Do you have unequivocal proof that REALTORS, Home Inspectors and maybe Appraisers collude”?

Please just say yes or no.

#173Form Man on 11.09.11 at 4:09 pm

#165 Devil’s Advocate

good quotation. it exactly pertains to you, and it is the purpose of this blog to educate the deluded bubble deniers such as yourself. well said ! , and good luck getting yourself turned around !

Indeed it could Form Man and I can well imagine from your perspective how you might think so. You must please grant me the minimal intelligence and foresight to have seen that one coming. What I did not anticipate was that you might stoop to such childish schoolyard antics as to respond by saying such as “I know you are but what am I.” (paraphrase maximus)

#189 Kits on 11.09.11 at 5:18 pm

Oct 30 post
Hi Garth,

Wow, that is all I can muster to describe your post today. I generally agree with you. Your views are usually well reasoned and balanced but not today. I suggest a quick read of the following person and some of his posts

http://seekingalpha.com/author/james-a-kostohryz

There are still material risks because of what is happening in Europe. It does not mean that there won’t be short term market gains but the mid-term performance is far from assured. You make it seem like we are fully in the clear, which is not necessarily the case. Your sheep may get slaughtered if they run blindly to invest in the market. Two senior Wall Street derivatives traders i know are 60% cash.

Where did I ever tell people to ‘blindly invest in the market’? How many times do I need to write about a carefully balanced portfolio of government, corporate bonds and real return bonds, trusts, preferreds, sector and index exchange-traded funds? Why do so many people on this blog think in black-and-white? A balanced portfolio (40 fixed, 60 growth) from 2008-10, through the greatest crisis in a generation, returned 5% annually . And this is no 2008. — Garth
—————————
I am not a doomer. That being said, Europe has the potential to cause the markets to materially trade down in the near term. I can’t say definitively that “this is no 2008”

We sure scare easy around here, no? — Garth

#190 Smoking Man on 11.09.11 at 5:24 pm

Bears win ahhh back in the green

#191 Devil's Advocate on 11.09.11 at 5:35 pm

Form Man

“If someone is going down the wrong road, he doesn’t need motivation to speed him up. He needs education to turn him around.” – Jim Rohen

It was intended, and I hoped most that you of all people might offer some agreement that it was, simply good food for thought on all accounts. We should all consider that it is entirely possible that we each might be headed down the “wrong road”. That is, in part, why I frequent this “pathetic blog”.

Who knows where or when they might pick up that little bit of information that proves them misinformed or even causes them to question what they believe prompting them to investigate if only to reaffirm their beliefs. It could be here that I find some most useful knowledge someday. I am always looking.

Really, don’t you think you should too?

#192 bigrider on 11.09.11 at 5:38 pm

Sheryl King says Bank of Canada to cut rates to stave off pressure from Euro crisis and possible recession. Rate cuts to start into 2012.

So much for the real estate correction. Get ready for higher RE prices and lower stock prices.

I am beyond frustrated and have thrown in the towel.

I’m going to the next Brad Lamb condo humpfest conference.

Garth ,give it up already. RE bears are toast.

No rate cut. Tell Brad. — Garth

#193 Devil's Advocate on 11.09.11 at 5:42 pm

Snowboid and McLovin

As much as I annoy you, as angry as you get with me, as relentless as I am in prodding and provoking you, you still fail to provide any compelling argument that might make me question my beliefs and the road I am headed down.

Signed
The Devil’s Advocate… look it up.

#194 Norton72 on 11.09.11 at 5:42 pm

#161 – Rana

Right on.

Else where – “Bank of Canada may let inflation stray from targetBy Louise Egan and Randall Palmer

OTTAWA (Reuters) – The Bank of Canada says its renewed inflation-fighting mandate will allow it, under exceptional circumstances, to let inflation stray longer from its 2 percent target in order to combat financial instability.

The bank said on Wednesday that such unusual circumstances could INCLUDE AN ASSET BUBBLE THREATENING THE ECONOMY or a situation of such instability in financial markets that they are unable to cope with higher interest rates.”

If they want to mind#$%& us on everything else at least be in our corner on this and deliver a serious warning to Canadians to keep(get) their ship in order.

Obviously it can’t be a dressing down, but, come on Carney (seriously bad vibe on Flaherty), show some berries and insist on some forms of household debt austerity.

So November 11th is Friday. We are a great nation. I would buy in Edmonton on principle alone.
I feel, right now, they feel they can limp us along, and scrape us by until all this shit passes us.

Is it possible economy returns to reason and housing at least only stagnates so our households don’t get screwed? I think of my sister much. She and her own are near the top of the walking financially blind.

#195 JRH on 11.09.11 at 6:08 pm

#83-I think NEO might be correct !

#196 jas on 11.09.11 at 6:22 pm

Is today the day to load up on financials and insurance Cos?

In your case, Depends and suckers. — Garth

#197 Devil's Advocate on 11.09.11 at 6:35 pm

#156McLovin on 11.09.11 at 3:23 pm
Hey DA,

Spin this:

From Royal Lepage – Kelowna area stats

Median Home price decline from peak -11.4%
Peak April 2008
Time since peak apprx. 42 months
Return per month since peak -0.27%

Median Condo price decline from peak -15.3%
Peak Jan 2008
Time since peak apprx. 46 months
Return per month since peak -0.33%

Wow this is a healthly market that is misunderstood and “not as bad as everyone thinks”

I am waiting breathlessly for your reply.

PS – Don’t try to deflect it by saying “Oh the actual peak was in Dec not Jan” Focus on the message.

My reply? Quite Frankly I thought the numbers were worse than that. The “Peak” was indeed Jan 2008 if you consider prices and volume.

I’ve said it before the real story follows volume. Volumes for your information are down about a third from those highs they achieve in 2007 (Again, try keep up here, price “follows” volume). Since then volume and subsequently prices have held quite consistently (you must see where I am headed with this) Do you think we are headed for a double dip?

I think after three years consistency in the market it is reasonably safe to say the worst is behind us. This three year lull has afforded us the opportunity to get our financial affairs in order – at least in better order than they were three years ago. You may not agree with that last statement but I think most would have to see the logic in it. People just aren’t that stupid. We know what happened. While we don’t know for sure what might happen we do know we don’t want that to happen again. It will some day but not for the same reasons. That, in itself, is a moving forward improvement.

So really in short, my reply is simply you have convinced me of nothing that might cause me to change the road I choose to head down based on all the information I have before me thus far including that which you provided.

#198 David B on 11.09.11 at 6:36 pm

So you think all is well and housing will continue to rise in price here in Canada …. A country of only 33 million on planet of 7 billion all living the good life no matter what. Cool

Interesting read just to let you know there other views

Wall Street Ignoring Europe

http://economistsview.typepad.com/timduy/2011/11/wall-street-ignoring-europe.html

#199 Peakoilist on 11.09.11 at 6:42 pm

#178 Westernman

oil companies are organizations? wrong ! they are PERSONS and deserve to pay their fair share. They certainly aren’t producing that “lifeblood of modern society” for the love of it..it’s to make money. If Exxon one day decided
that they didn’t like that game anymore, we can be certain another player would move in and take the business, because it’s so profitable.
And besides, the way that you describe the product, can be assigned to many products that are essential for our society.

#200 Form Man on 11.09.11 at 6:54 pm

#188 DA

you are persistent, but again, not so good apparently with your reading comprehension. when I say ‘no proof’ that would also mean ‘no unequivable proof”, which amazingly, can also mean “no”…………( grade school grammer, not unlike the grade school math required to understand the demand/supply equation you were struggling with last week)

#191 DA

if ever I find myself on a wrong road, I shall remember your quotation with warm regard….

#201 I'm stupid on 11.09.11 at 7:06 pm

Garth, I’m a big boy you can let 105 Westernman’s comment threw. I don’t mind. I’m actually curious to read what he wrote.

#202 bigrider on 11.09.11 at 7:24 pm

#192 Garth to Bigrider-” no rate cut..tell Brad”

I have recorded time and date of your comment above.

When the cuts in interest rates come in the first and second quarter of next year, I will re-post.

At what point are you going to re-examine your position on RE bubble ? Are you that stubborn ? Is there any chance you are wrong in your assessment of RE prices in Canada? Any chance at all???

What is it going to take for you to admit that you might , just might be wrong?

Not tired of crying wolf yet?

#203 bigrider on 11.09.11 at 7:27 pm

G-damn it, here we go again. A falling equity market, coupled with more interest rate reductions and ,of course, a further escalation of RE prices to fuel the m-f-ers in the housing industry.

Just what we need..fk

#204 VICTORIA TEA PARTY on 11.09.11 at 7:34 pm

#121 Canadian RE…

This is no time to be larding on debt, unless it’s some kind of emergency. As it stands, current debtors are facing “interesting times” ahead. Low interest rates are a trap, not an advantage. DO NOT FORGET THAT!!

Why? Because…

The economic news out of Italy is simply terrible, with 10-year bond rates at 7.4 per cent. ALSO, Italy’s whackjob PM won’t step down, I believe. Note that on Tuesday the Italian government said Berlusconi would resign AFTER an austerity plan had been approved, in the next month or so. Today, that austerity plan is apparently going to be brought forward to this week. Like Hell! The PM has no intention of quitting now. Too many perks and old habits that refuse to die!

And Greece continues to simmer as PM Papandreou clings to power, even though he “resigned” this morning during a TV appearance. No one in the governing party can find his replacemnt even though one was chosen just days ago. Papa stays!

DENOUEMENT IN SPADES

What we’re watching is what happens when countries, whose citizens have been protected from “real Life” by endless government hand-outs, finally hit the economic wall. The Grim Reaper from the “Land of Payback” has has rolled into Dodge.

Europe’s periphery economies are definitive toast; a tally to date: Spain, Portugal, Italy, Greece, Ireland.

Next up is France, then Germany and the “dutchies”.

After that, the deutchmark makes its no-surprise-to-anybody reappareance, and the continent “reverts to mean”, that is back to the post 1945-era, sans the “Eastern Bloc” and the Marshall Plan.

What does THAT mean? Well, the disintegration of the world’s largest trading bloc, a fractured consumer market for China and what’s left of the USA’s tattered economy means years of agonizing economic hopelessness.

The “good news,” is that chance of war in Europe is probably non-existent.

HOWEVER, look for Russia, China and various Middle Eastern “interests” to move in and start carving up the remnants of a failed-from-the-start Euro empire.

Next economic disaster? Non-resolution of the US debt ceiling, promised on November 23 by that Congressional “super committee.” Remember that canard from the summer, after the US debt downgrade? Hmmm?

I think the Western industrial “elites” have lost it — new territory and no compass — just giant egos and the attendant hubris and the resultant Greek tragedies for one and all.

#205 Devil's Advocate on 11.09.11 at 7:36 pm

I find it extremely perplexing that some would believe I come here to try SPINNING the facts and somehow influence the market toward higher prices.

Look it is real simple, volumes have dropped a third since their peak in 2007. That means fewer are buying. It is they who have a more discretionary motivation to buy who have left the market. There are still a core level of motivated buyers and sellers. It is just that one third who have left.

If prices fall enough it will most certainly provide enough incentive for that one third who left the market to return. Can you see now why I don’t care if prices fall and I have no motivation to stop them from doing so if that is what they might do.

I just don’t see prices falling that much more if at all.

This is a return to norm not a departure from it. These new volumes are as they were before the bubble. If prices fall so dramatically as some here seem to believe they should, believe me, it will cause another bubble. We don’t want that do we? Bubbles are selling opportunities not buying opportunities. Bubbles are typified by irrational exuberance. On the other hand recessions and depressions are typified by irrational apathy.

#206 Devil's Advocate on 11.09.11 at 7:54 pm

#200Form Man on 11.09.11 at 6:54 pm

Just to be clear then, why did you say;

“I can assure you, in Canada there is collusion between mortgage brokers and realtors (and home inspectors). Appraisers I am not so sure about, but I would not be surprised.” #119 Form Man on 11.09.11 at 12:12 pm

I’m sorry, but the conviction you demonstrated in that accusation did remain to overshadow your subsequent admission at your post #162 today at 3:45 pm that it was indeed “hearsay” and no worthy evidence at all.

In the circles I travel such accusation is a serious defamation of character.

#207 CalgaryRocks on 11.09.11 at 7:59 pm

I’m going to the next Brad Lamb condo humpfest conference.

Garth ,give it up already. RE bears are toast.

No rate cut. Tell Brad. — Garth

Hey Garth,

Your buddy Brad Lamb is in Calgary tonight, giving a speech on why he’s investing in Calgary.

Any message you want me to give him? ;)

#208 Devil's Advocate on 11.09.11 at 8:07 pm

When considering if Canadian prices will fall so much as they in the United States you must also consider than Canadian mortgages, generally being recourse mortgages, do not afford those in default and under water the option of walking away or negotiating a “short sale” with the bank. There is great incentive for those Canadians facing foreclosure to muster together the where-with-all to hold on and little incentive for them to drop their price so far below that which they paid as you might expect them to.

#209 Westernman on 11.09.11 at 8:09 pm

Peakoilist,
What is it about Canadians that the first thing they want to do with EVERYTHING they see is tax it?
Brainwashed since birth by the matriarchal socialist nanny state they live in I guess.
Money goes where it is treated best…which goes to explain why most productive enterprises have left Canada and the west to go to the Asian sub-continent. Just keep up this lets tax and regulate eveything to within an inch of it’s life Canadians and we’ll all make a good living selling timbits to each other and wondering why we are all so poor.

#210 Westernman on 11.09.11 at 8:10 pm

Garth,
See? I’m Stupid wants to hear my comment… let him have it – he’s got it coming…

#211 Devil's Advocate on 11.09.11 at 8:15 pm

Before anyone makes a smart-assed comment about it let me set the record straight. No the market is not as brisk as it was in 2007, on that I believe we can all agree. Nor though is it so slow.

That I have time to post numerous times today is not because I have nothing to do real estate wise. Today is my day off – a day on which I can get personal chores done and out of the way. You know stuff most do on… Sunday. I generally work on Sunday.

Everybody deserves a day off don’t you think?

#212 Echo on 11.09.11 at 8:24 pm

#183 Timing:

Nice deflection.
Brilliant.

#213 Form Man on 11.09.11 at 8:54 pm

#206 DA

I find your fascination with my assertion a bit alarming. Perhaps I am a little closer to the truth than you would like ? Canada has a population of some 34 million people. I can assure you, somewhere in all that population there has been collusion between a realtor and a broker. My comment then is valid, legal, and rather meaningless. The comment has, however, succeeded in consuming a good part of what could have been a productive day off for you………

#214 sales have stopped on 11.09.11 at 9:05 pm

Wow look at all the worried realtors on this blog posting all day since they are showing empty open houses and very little is selling. Read an article in the globe how 1% increase in interest rates and the house of cards would come crashing down.

#215 The thing in the basement on 11.09.11 at 9:26 pm

162 Form Man – you still benefit greatly from the “wealth effect” from the abundance of credit, so you might not want to be too critical of the mortgage brokers etc.

#216 Devil's Advocate on 11.09.11 at 10:44 pm

#213Form Man on 11.09.11 at 8:54 pm

Seriously?!? That is the best you can do. “Canada has a population of some 34 million people. I can assure you, somewhere in all that population there has been collusion between a realtor and a broker”

Seriously? That is your best defence of such a slanderous remark, dismissing it by saying effectively “somewhere there must have been such collusion.” Again I paraphrase.

Seriously?!?

Call me a fool but even I can see the lack of defence in that one.

And waste a day… not at all. I accomplished much. It was largely a productive relaxing day.

#217 disciple on 11.09.11 at 10:53 pm

#209 Westernman…. taxation doesn’t cause poverty, it forces a society to alleviate it, at least in theory. The problem is that the wealth derived from that taxation via equal and/or fair distribution, is being sucked off by central bankers to pay interest on nothing and for nothing in return, so that less and less can be taxed. Your whole political stance and perhaps chosen reason for existence is futile, powerless, cowardly, and without merit. Arrogant ignorance, or perhaps ignorant arrogance, pick one, and let’s tango.

#218 Steven Rowlandson on 11.10.11 at 8:09 pm

Two million in the bank. Not bad, better than being broke of course but to generate a half decent income flow you need a 10% rate of income from dividends or interest to satisfy the tax man and have a middle class income more or less. On the other hand one would have to be on guard against currency restructuring due to hyperinflation and or debt problems. Getting a princely sum to support your life style is one thing, keeping it is a far greater challenge.