Spousenomics

Frustrated? Horny? Even lightly married? You’ve arrived at the right place. GreaterFool, providing long-distance residential hormonal treatment since 2008. Ah, and here comes another unsatisfied spouse, about to reveal all.

Okay, Garth, so $310K in the bank for a downpayment, and we have other retirement pensions and fixed assets worth about $300K. We’ve been married 10+ years, have a 5-yr old with maxed out RESP’s and we’ve also ensured we’ve maxed out each of our TFSAs. The problem is we gross $140K annually and rent a 1-bedroom apartment since we’ve been married, and my husband has been adamant for a decade that the “housing market’s going to soften”.

So Garth, while I understand that the world is going through an economic slow-down, it’s been over a decade and we can’t seem to get ourselves even an “affordable” freehold townhouse in Toronto around the $400K-range… is the Toronto market ever going to “soften” like my wonderful husband has been whispering in my ear, or will it be that I’ll just need to suck it up for another decade here in this rental? Signed, yet another frustrated wife:)

Well, FW, there’s no joy for you this week. The real estate cartel released its latest batch of numbers, and they show the herd’s still firmly in control, sort of. Sales were stronger in the third quarter than they’ve been all year (but down from last year), while average prices are ahead 5.5% nationally. In Vancouver it’s 8.5%, and Toronto 8%, where the average price is now $478,137. But this is misleading. The average SFH in 416 is closer to $725,000, while in Van it is just over $1 million.

What does this tell us?

Well, to the house-and-loan floggers, it’s endless sunshine up the wazoo. CREA says global financial turmoil over the last four months has played essentially no role in dampening real estate horniness, while BMO mortgage boss Katie Archdekin says (shamelessly): “These numbers show that Canada’s real estate market remains resilient with opportunities for prospective buyers.”

Mortgage and personal debt continue to rock on, up close to 10% this year alone, even while 71,700 people lost their jobs last month, the media’s dripping with dire headlines about Europe, thousands of occupying protestors decry capitalism and the US housing market slides to untested lows. As that happens, and the average price of all properties falls to just $758,000 in Vancouver (from just over eight large), one bank economist has the brass to say, “B.C. is looking like more of a buyers’ market.”

So, little insatiable housewife, can we conclude that prices will continue to rise, because they have been rising? Or that any decline in values from historic highs constitutes a ‘buyer’s market’? Will this thing ever go limp?

Actually your husband’s right. He may not have been five years ago, but he is now. There are no economic fundamentals, other than cheap money, supporting housing. Wages have flatlined while indebtedness has soared. More and more people have rolled the dice and shoved all of their wealth into a single asset, kinda like an army of idiots did with dot-coms, Bre-X and Nortel. The increase in valuations has now surpassed that experienced in the US or Ireland just before everything unravelled in 2006. Risks are routinely ignored.

Of course, the party can continue for a while. So long as there are enough Greater Fools willing to (as they did a few days ago), generate 16 offers for a house in mid-town Toronto, pushing the price to $146,00 over the asking of $839,000, prices will increase. And history shows us they go up faster than they fall, since homeowners are loathe to face reality. (However, in some spots they already are. Victoria is down 7.3% and the Okanagan off 5%, for example, while SW Ontario remains in a funk. And let’s not forget that, nationally, sales of existing homes are actually at 2004 levels.)

But, then it will be over. Of that there is no doubt. The only question is, can a frustrated wife quell her house lust long enough to survive?

Beats me. However, the issue may not be the lack of a mortgage in your life, but a simple desire for space. Why the hell is a couple with a kid and an income double that of the average household living in a one-bedroom space? Doesn’t this guarantee a cranky, bitchy, snarly, sniping, backbiting relationship? Why not just move into a house?

After all, you can rent perfectly fine digs immediately.

  Like this one – a two-story home in the tony Kingsway area with four bedrooms, three baths, a garage and a back yard. With actual trees. The cost is $3,500 a month, but I’m betting that’s only $1,800 more than the raunchy little apartment costs – which is exactly what your $310,000 down payment, now moulding over in the bank, could be paying you monthly, if properly invested.

Would you be throwing money away on rent? Nah, of course not. The extra monthly amount is money you’re not getting now, but could be. The benefits of moving into a proper house with room enough to stop clawing each other could be immense. He gets to wait for the correction and restore his bent manhood. You get satisfied.

See? You came to the right place.

 

171 comments ↓

#1 dodgedbullet on 11.15.11 at 9:50 pm

Are you talking being paid 1.8k per month? Or an annualized growth of 7% over the year (if you choose to cash out)?

If you’re talking payouts… are you advocating a dogs of dow style strategy?

Ben.

$310K invested @ 7% = $1,800 a month. — Garth

#2 WI BOOMER on 11.15.11 at 9:51 pm

Yes!!! Rent that suburban shit-box, but please do not buy it yet. Likely, the rent could fall, or you get to buy a foreclosed place for a discount. Here in the US where I live you can buy a nice 4 bedroom rehabbed for 100K new will cost you double plus 30% but hey, that’s what 5% fown gets on an adjustible rate after the ritz hits the fan.

I might become a land barron now that prices have fallen, interst is near nothing, and stocks look trapped in a trading range. Some good buys, but they don’t last long, I’m not the only cash buyer waiting to snap up a bargain.
Patience IS a virtue, but mover to a better rental, dear.

#3 dodgedbullet on 11.15.11 at 9:52 pm

p.s. I can wait for the book. ;)

#4 toon town boomer on 11.15.11 at 9:53 pm

$3500.00 a nonth for rent how insane is this world getting. Oh ya i forgot “were richer than we think”.

#5 toon town boomer on 11.15.11 at 9:54 pm

I meanth $ 3500.00 month

#6 ozy - hope is low, go buy on 11.15.11 at 9:57 pm

In GTA and Canada overall, this is a controlled, cornered RE market, there is no hope
pay dearly if you need.

hope is low, go buy, thier grip on the market will just increase with time

people won’t bring gov down on this huge housing unaffordability matter, so go buy before divorce

#7 MixedBag on 11.15.11 at 9:58 pm

That’s a nice, practical analysis. Best of all, they can experience and learn what is involved in maintaining a house vs. the apt. they live in now. It’s like on-the-job training.

#8 toon town boomer on 11.15.11 at 9:58 pm

I know another typo error I push submit to quickly. Anyway that’s all for today.

#9 Mean Gene on 11.15.11 at 10:11 pm

Maybe Garth can recommend a good financial advisor, via a private email to the tired wife… or maybe you already have??

She was too frenzied to ask. — Garth

#10 Etienne on 11.15.11 at 10:18 pm

#3 dodgedbullet
me, I cannot wait for the book.. I hope it is still scheduled for the fall…

#11 Stinky the Fish on 11.15.11 at 10:33 pm

I’m not from Vancouver but it seems like tons of opportunities on Kijiji, and better than what Garth showed – http://vancouver.kijiji.ca/f-real-estate-house-rental-W0QQCatIdZ43
I may be wrong though so please correct me if I’m wrong.

You’ve waited ten years and watched house prices climb to unsustainable heights… and then you finally say in the peak that you’re going to buy a house? One question. WHY? At least wait a year and see what happens. And then wait another… And then another… I know it’s frustrating but it’ll feel so much better when it starts happening. AND it WILL happen because there are limitations to how much debt people can take, and yes, we are approaching those limits. This is a debt bubble.
http://theeconomicanalyst.com/sites/default/files/article_inside/2011/05/06/growth_in_mortgage_debt_0.jpg

You have to realize that people are not buying these homes with money like you are. They have taken out big mortgages, and even added to that with HELOC.

I really think you have to wait another year… Vancouver has the best chance for a price decline in 2012, #2 is Toronto, my city not so much…

Here’s some more reading to help convince you:

Nobody will escape economic slowdown: OECD
http://www.theglobeandmail.com/report-on-business/international-news/nobody-will-escape-economic-slowdown-oecd/article2235258/

But for B.C., house prices to climb next year, RBC says
http://www.theglobeandmail.com/report-on-business/top-business-stories/but-for-bc-house-prices-to-climb-next-year-rbc-says/article2236997/

Home-owning baby boomers should consider ‘for-sale’ signs
http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-owning-baby-boomers-should-consider-for-sale-signs/article2204164/

What is the attraction to buying a home anyhow when you know it’s going to happen? I’ve been in this house porn game for 1 year. Be thankful you can go house-to-house and rent in new places. The flexibility is the best part.

#12 Smoking Man on 11.15.11 at 10:44 pm

Coho from yesterday got me thinking.

Here we have a smart person, Coho, a moral person, who feels compelled to save the common folks…..Lets get the truth out and hope someone else does something about it.

At first My dad had it way easer than me, My kids have it harder than me. And my grandkids will have it even harder than my kids…… Well maybe not cause I’m going to help them all. Not with lots of Money, But a real education

Now Coho and many others know something is not right, and they are 100% right.

But like cattle walking the plank to the kill floor they blame the wrong people for their predicament. The few Cows that think they are smart look up at the office towers and blame the owner of the kill floor…The illuminati they say. The rest just think it’s a nice walk and notice the nice new condo’s going up next door

The cows will never blame the loving Farmer who sent them for slaughter.

After all the farmer feed them, the farmer took care of them, the framer insured they are kept safety. He put fluoride in their water to keep the bulls teeth clean. The Farmer taught them everything. They know the 16 years the Farmer had them he always had the cows best interest at heart as it was reminded to them everyday watching TV. The Farmer would showcase his best cows to the other cows as to inspire them. And showed what happened to cows that did not conform…

Back to People
The 1% get power from the obedience of the 99%
The 99% learn their obedience from ? TV, Friends, Cows, Fellow students, any guess???????

Read this again Swap out the word Farmer for Teacher and Cow for student and you have just experienced a taste of real education…

#13 JohnnyBravo on 11.15.11 at 10:47 pm

A news report on CBC radio this evening on condos in Toronto. Reports of bad designs and shoddy construction leading to maintenance problems in the years ahead, and very low life expectancies for the buildings themselves. Made even worse by the anticipated hikes in condo fees. And no land. Just glass and concrete boxes that are about as grounded as most of the buyers.

#14 Paully on 11.15.11 at 10:54 pm

We have been looking at renting in Willowdale, but the available stock of houses with reasonable rents in this neighbourhood is slim. Maybe one in ten houses offered for rent are decent, family housing. The rest no so good. Some are even worse than any student housing that I ever lived in years ago.

Sell and rent makes sense, but finding an acceptable place to rent is proving much more difficult than I thought. If home-ownership is at it’s highest level ever, where are all the nice, vacant rentals?

#15 diharv on 11.15.11 at 10:58 pm

Waiting for keeping the Faith to post. Who will be the IDIOT tonight ?

#16 vyw on 11.15.11 at 10:59 pm

You can rent a decent 2bdroom downtown or mid-town Toronto for $1800-2000. No need for a house @ $3500.

Vancouver median prices for detached houses declined last month ($885K) from the previous month (897K), about $12,000 or 1.3%. YOY prices up about 11% for detached homes in Van: http://www.rebgv.org/housing-price-index?region=all&type=all&date=2011-10-01.

#17 The Original Dave on 11.15.11 at 11:06 pm

I”m not seeing the craziness in Toronto – at least not in North York. Houses are sitting with for sale signs and very very few sold. I’m not talking Leaside, Forest Hill etc. In around Yorkdale Mall etc., houses sit. I even mentioned about the townhouse sale at 401 and Weston Road – not a lot of people there either.

So maybe different parts of the city tell a much different story. Things that are listed for $700,000 around here, DO NOT SELL.

#18 Andrew from Saskatoon on 11.15.11 at 11:07 pm

Dear god, woman. Rent something bigger. I can’t understand the narrow-mindedness of people.

#19 The thing in the basement on 11.15.11 at 11:07 pm

A different perspective – Herb please forgive me if its been posted before

http://www.youtube.com/embed/OAOrT0OcHh0?version=3&rel=1&fs=1&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent

#20 JohnnyBravo on 11.15.11 at 11:14 pm

#149 Westernman on 11.15.11 at 4:29 pm

“Until then it [gold] is an abstract concept […]”

I’m certainly no gold bug, but, sorry, that comment is ridiculous.

An abstract concept, eh? If so, then gold is perhaps the only abstract concept that is hoarded by central banks around the world and guarded by the military under the highest levels of security.

And before you say you were referring to gold as money, learn a bit of history. You’ll find that nothing has been used for money as much as gold. What we use today for currency isn’t even really money by the strictest definition; it’s debt. We are all transacting with IOUs.

#21 dmc on 11.15.11 at 11:18 pm

http://www.cbc.ca/video/#/Radio/1494238329/ID=2167201199

for some lolz at 38 minutes, Rex Murphy’s head nearly explodes when a dude tells him people are still taking out equity loans in Canada.

#22 City Slicker on 11.15.11 at 11:20 pm

#12 Smoking Man on 11.15.11 at 10:44 pm

Coho from yesterday got me thinking.
————————————————————
Another prolific post smoking man. Keep them coming.

#23 Stevenson on 11.15.11 at 11:26 pm

Your husband has been a fool for the past few years and so far he will continue to be.

3500 monthly off a 310000 principle after tax? Garth time for you to share the inside trading tips.

#24 dmc on 11.15.11 at 11:34 pm

eek #21 that should be ‘home equity loans’

#25 wes_coast on 11.15.11 at 11:42 pm

To add to what Garth said – when the S does hit the Fan you are not stuck with high rent for 35 yrs as you would a mortgage. That higher rent is a short term phenominon. Rents will fall too when all this unwinds.

#26 Herb on 11.15.11 at 11:42 pm

#16 Thing in the Basement,

if it has been posted before I hadn’t noticed. But I assure you that it hasn’t been posted 10 times. Anyway, I enjoyed it. Brilliant piece of propaganda – erect a strawman, beat the hell out of him, and sing the praises of your side. Do you really think that protesters growing up will put banksters and corporate grifters on the straight and narrow, create jobs and save the economy?

Recommend you catch one of the broadcasts of CBC Newsworld tonight or check the website tomorrow. The “Bottom Line” panel is worth watching. Jobs and the labour force are featured, and three of the four panelists expect Canada to go into recession. I don’t think that protesters growing up will fix that.

#27 justanormalguy on 11.15.11 at 11:47 pm

I can understand what her husband is thinking..With 140k income, if you are maxing out on RRSP and TFSA, you might be able to afford only 1 -bedroom room condo (1800$/month), just like us I guess. The only child going to a private school (1800$/month) though. That is with our income of 160k. We dont have big down like you though. Just have one car, one vacation/yr. Just not sure if private schooling is necessary. Probably my child might be the only one who goes to that school from a 1 -bedroom + den condo. Dont know what to say…housing is expensive, but education is also expensive. We could choose only one. Any thoughts??

#28 T.O. Bubble Boy on 11.15.11 at 11:47 pm

Toronto rentals depend on exactly how close you need to be to the subway/trendy areas.

North Toronto (Yonge & Eglinton up to Yonge & 401) near the subway and Yonge St. shops tends to have semi-detached houses in the $2500/month range and detached houses in the $3000/month range.

For example, here is a 3-bdrm/3-bath detached house near Yonge & Eglinton for $2750/month:
http://www.realtor.ca/propertyDetails.aspx?propertyId=11174604&PidKey=-703985125

Yes – renting at $2500-$3000/month seems insane for a lot of people, but it is far more sane than spending $5000/month or more on a $1M mortgage for the same home!!!

($1,000,000 @ 3.5% with 25-yr amortization is almost exactly $5000/month… without any property taxes etc. included)

#29 ClaudiusEmperor on 11.15.11 at 11:47 pm

I am sorry.
5 years ago (2006) the prices in GTA were higher or equal than in the fall of 2009. In the fall of 2009 the prices in GTA dropped by 15-20 percents in just few months. The market was dead. It was the beginning of an worse than US melt-down.
There is no way the house prices in 2006 in GTA were justified. everything was based on cheap credit.
The house prices of 2002-2003 were maybe justified. Maybe not. Don’t forget the near zero interest rate for almost 10 years. We will pay dearly for those rates.

Anything above 3-4 times the average household income is insane as a mortgage.
Anyone buying condo here is insane. /quality of the buildings, the maintenance fees/
The Property taxes in North America are insane.

“one flew over the cuckoo’s nest” has more sanity than the real estate market here.
We are different is the syndrome of the small thingie.
It helps for a while. At some point we would wake up with the fingers in the electric outlet with our behind applauding…

I highly recommend the book “Endgame: The End of the Debt SuperCycle and How It Changes Everything” by John Mauldin and Jonathan Tepper.
It is backed by data and statistics.

#30 Angela on 11.15.11 at 11:49 pm

Garth, how can you really compare buying a house to dot com stocks? Other than the speculative aspect of it at the end of the day people that bought dot coms were investing into thin air where at least people investing in a house can live in it, at the very least. The house can’t disappear into thin air like company stock can.

#31 Aussie Roy on 11.15.11 at 11:55 pm

Aussie Update

Property buying losing appeal even as prices retreat

Australians are still hesitant to buy residential property due to expectations of falling housing prices, a survey finds.

http://www.theage.com.au/business/property-buying-losing-appeal-even-as-prices-retreat-20111115-1ngwk.html#ixzz1dpwjTHfD

Renting, money or RE?.

“The giant mortgages needed to buy in this market mean people are exchanging renting a house for renting money. And such large mortgages cannot be easily paid down – at these multiples of income it takes years of sacrifice to make the slightest difference,”

http://www.prosper.org.au/2011/11/16/a-nation-renting/

NZ

Australia has worse affordability than we do, and they have a capital gains tax. The United States and Canada both have nation-wide capital gains taxes, yet have also had some of the most pernicious housing bubbles, especially in urban housing markets where the availability of land has been tightly constrained.

http://www.voxy.co.nz/politics/speech-housing-next-generation-don-brash/5/107507

#32 Timing is Everything on 11.16.11 at 12:08 am

#12 Smoking Man

They [cows] know the 16 years the Farmer had them [cows] he always had the cows best interest at heart as it was reminded to them everyday watching TV….

http://tinyurl.com/75e5wkd

Soma sno-cones are on me tonight SM.

“All the advantages of Christianity and alcohol; none of their defects.” – BNW

#33 Disciple's replacement poster for this coming week while he's on vacation on 11.16.11 at 12:17 am

#12 Smoking Man
Bravo , smoking man, love the cow analogy.

#34 Nostradamus Le Mad Vlad on 11.16.11 at 12:30 am


“What does this tell us? Beats me. But, it’s endless sunshine up the wazoo then it will be over. See? You came to the right place. Of that there is no doubt..” — Good description of TREBs and CREAs all over!

“Spousalnomonics. Wages have flatlined while indebtedness has soared.” — Add that jobs are disappearing, and the clear answer is rent a home for as long as possible, and continue topping up all the investments mentioned earlier.

RE is akin to a mammoth choking a person — there is only going to be one winner.
*
#178 OttawaMike, #184 Smoking Man, #187 Onemorething and #195 Timing is Everything — It’s nice to spice this pathetic blog up sometimes — Keep the rib, SM and thanks!
*
Kanaduh’s new plastic $100 note can be put in water. Is this moneylaundry?
*
Canada What if China buys oil from Iran instead? 1:19 clip BoA — funny clip; Hyperinflation in the EU Got a suitcase? IMF – China Just as China’s economy dips, along comes the IMF with a warning. Methinx TPTB want a nice piece of the pie; Bloodless Coup, Globalisation doesn’t seem to be working, but Hu says it does; Cameron Like Blair, he cannot be trusted.

Webster Tarpley wrong, Ron Paul right; Sovereign Debt, ZEW Economics, Farmland Bubble, CFTC Rule Change.
*
42:19 clip “Start at 35:15. Obama says Hawaii is part of Asia!” wrh.com; “Quake and Shake Cascadia — nine months pregnant and ready to go; 5:48 clip Waterboarding — what it’s like (torture used by the US and others); 3:46 clip – Libya The UK is starting with the rebuilding of the country it just bombed — guess who profits? Militarizing the Police 9-11, the drug war and other events have led to the current head-bashing, helmet-covered police bashing the public; Merck vs. Monsanto And the winner is . . .; Libya Why has a media blackout been imposed? TPTB wanted Libya’s gold-backed dinar removed, the UK only wanted the oil and everything else has been dispensed with, so why the blackout? Germany, France united on one thing; Twitter The CIA and FBI are cracking down on the ‘net, too.

4:50 clip Journalist on Fukushima tour not allowed to film, and Plutonium found TEPCO says not caused by meltdowns (the vicious Easter rabbit did it); Gobi Desert Canoe Club and Another view What and why is China building in the Gobi desert? Possible nuke attacks in Beijing and Shanghai, or to house refugees from Japan? Ron Paul still leading; Mongolia Permanent winter?

#35 Golden Stu on 11.16.11 at 12:40 am

“Westernman on 11.15.11 at 4:29 pm
Re: Gold,
I don’t agree with our host on a good many issues but on gold he is right. When you can leave your house and go shopping with a pocket full of gold dust that will be the day gold is money and not before. Until then it is an abstract concept for economist wanna-be’s to shill for.”

If you live in canada you cant buy anything with USD, GBP, EUR either. You have to exchange it for CAN$. There is no difference. http://www.goldmoney.com/

Funny thing today Gman, I was in CIBC taking Bonds, their man with a plan said “their treasury dept was in this week talking about gold” He said they thought they were setting up a new gold fund.

Anyway praise time, the blog is still a fabulous read, keep up the great work.

#36 Excellent on 11.16.11 at 12:41 am

#12 Smoking Man

So let me get this right….

The farmer feeds his cattle,
The farmer cares for his herd
The farmer medicates sick animals and nurtures them.
The farmer shelters his livestock and offers warmth.
So he is the good guy for all the animals on the farm.

Then he sends them to slaughter and makes a buck.

You, my friend are pure genius. You got it so right.

#37 The American on 11.16.11 at 1:13 am

#11: Stinky the Fish, I appreciate your comment. However, I have to ask are you inferring you think the buys will be here as early as 2012 in Vancouver? Or, are you thinking the price declines will ensue at that time? I hope you are feeling the latter. This will be a slow and painful drop over many years time, much like what has been experienced in the U.S., Europe, and now Australia. Canada and China are next. This is NOT something that happens in a matter of a few months or even a year. This is a very long process. I must admit I’ve witnessed Canadian mentality in general being rather overly optimistic and Polly-Anna-esque with respect to how long a real estate collapse takes to reach the bottom. If I were you, I’d not even consider buying a damn thing for at least five years from today. Mark these words. Otherwise, you’ll be paying too much.

#38 Devil's Advocate on 11.16.11 at 1:30 am

If any of you have the means you really ought to watch the latest GLOBAL BCTV advertisement for their News. WOW!

#39 Country Bumpkin on 11.16.11 at 1:32 am

Hi Garth,

Been following your blog for quite some time. Sold most of my houses and have some cash in the bank. I am wondering how you are able to find 7% these days as per your lastest post?
Best regards and keep up the good work!

#40 Cowboy Pete on 11.16.11 at 1:37 am

Understated facts that we have inflated an already stressed balloon even further is supposed to be good news?

Can I have some of what the CREA is smoking?

#41 Thankful on 11.16.11 at 1:46 am

If you have a mortgage, I have something to say to you:

THANK YOU!

You see, just like the person who emailed Garth, my family has been fortunate and we’ve managed to save up some money over the years. It’s invested conservatively but profitably. We rent a nice place. Unlike Mrs. Yuppie’s arrangement, we’ve even got a bedroom and a bathroom to spare. We don’t mention this to relatives.

BTW, Mrs. Yuppie’s very likely keeping her husband in that 1-bedroom apartment to try and force him into buying something. I could be wrong, but I’ve seen it before.

Anyhow, with the money my family has saved, and the fact that we’re only paying around half what it costs to carry the property we live in at today’s rates, taxes, maintenance costs, etc., it turns out that we’re now creditors to several banks.

You people with 20-35 years to go on your mortgages, well, you’re debtors to those same banks.

We get paid by the banks. You pay the banks. See where this is going?

In short, by not purchasing property we’ve arranged it so YOU are paying our rent to our nice landlord. He bought our place for a song years ago and just loves that fact that we help out with maintenance when the mood suits us.

In short, everyone in our arrangement wins.

And every month, every time you pay that interest charge, you lose.

If you have a mortgage, you’re paying my rent. Your bank, my landlord and my family have only this to say:

THANK YOU!

#42 Makaya on 11.16.11 at 1:53 am

Did you know that Peter Schiff is actually renting? Guess why?

The presentation he gave (link below) is dead on. The way he explains why he is renting is actually hilarious (his landlord told him he doesn’t understand how real estate works!).

The whole interview is worth to see, but if you want to only see the part where he talks about him renting, it starts at around 10:00 on the video:

http://youtu.be/EgMclXX5msc

#43 Contrarian on 11.16.11 at 1:54 am

She’ll never go for it. If a couple making 140K/year with a kid are willing to live in a 1 bedroom, they’re likely too cheap to be willing to “throw away” $3500/month.

#44 Smell The Coffee on 11.16.11 at 2:15 am

In the early 1900’s there were many huge palatial homes built for small, wealthy, families in the Eastern US and Canadian cities who took the 1920’s agricultural and manufacturing boom as the ‘new normal.’ Kind of like the world did from 2001 through 2008 if you think about it.

Many of these were built as mercantile luxury palaces for $20.000 to $40,000, an enormous sum equivalent to over a million dollars today.

They were sold, less than a decade later … at tax and distressed realty auctions often for $2,000.00 or less.

These mansions were then turned into rooming houses or broken into apartments with often six or more rentable suites .

It is likely that our modern cracker-box and particle-board Mc mansions will go the same route during the next Second Great Depression starting in 2012.

The 2008 crash was equal to the 1929 crash… which was a recession for the first three years and a depression by 1933. Our next big economic depression is in 2012 and it will be officially recognition point by then just like the public became resigned to being in an enduring depression by 1933.

Canada and the US didn’t go back to measurable civilian and middle class growth until 1953.

Hard money became so scarce and jobs so rare that many families were forced to double up and even triple up in cities, just to get by.

There were no social safety nets then. Now with the exhaustion of the welfare state, our cherished social networks have become frayed, and will not survive the next financial onslaught in their current form.

Taxes will skyrocket for the remaining solvent taxpayers and debt financing will collapse on itself like the old Soviet Empire, completely spent.

As we have consumed our “seed corn” in the last three years there are no ‘reserves’ in the system other than debt doubling-down on more debt. It like the plan when you party that somehow you will drink yourself straight eventually to avoid the inevitable hang over. But at some point either your wallet is empty, or your liver gives out.

Flaherty knows this, and the great reckoning will be soon be upon us. I suspect no later than June of 2012.

Greece is just a “movie trailer’ for the coming horror story and social dislocation of this drama soon to wash on Canadian shores.

We are so globally interconnected that we cannot outrun this tidal wave of debt repudiation. It has happened to every over-extended empire, and is inevitable here.

The western entire banking system is merely a digital accounting system with electronic book keeping entries.
There is no real money anymore , only perpetual agreements cover previous debt agreements. That is why a paper ‘bank note” is not called money anymore, but a unit of debt accounting called a ‘note’ as in an I.O.U. note.

For the majority of salaried persons expecting to make more or the same amount of ‘money’ over the next 25 years equal to the last 25 years to pay off any long term adjustable mortgage is a colossal delusion.

Any mortgages that have made this assumption of multi decades financial sustainability for the average ‘Canadian shlub’ are doomed.

The future will not be a gentile repeat of the past. Fasten your seat belts. Storm clouds and lighting ahead. Oh and did I mention we are low on fuel.

#45 Makaya on 11.16.11 at 2:57 am

As I’ve said before, be safe with your investments and don’t take everything that is said on this blog as the voice of god…

The painful economic times are just getting started, after Greece and Italy, now are coming France and…. China!
http://www.theepochtimes.com/n2/china-news/chinese-tv-host-says-regime-nearly-bankrupt-141214.html

#46 Bailing in BC on 11.16.11 at 3:15 am

The problem is she is stuck on the idea that paying rent is throwing money away. That is why they are renting a one bedroom with a five year old kid. She feels that when she is paying a mortgage she will be building equity (which she may or may not be depending on how the market goes) but dollars to donuts she will be paying my quarterly dividends.

#47 Suede on 11.16.11 at 3:42 am

Here’s one for the conspiracy buffs…

Full Article (In French):

http://www.lemonde.fr/europe/article/2011/11/14/goldman-sachs-le-trait-d-union-entre-mario-draghi-mario-monti-et-lucas-papademos_1603675_3214.html#ens_id=1603680

Excerpt with auto translation :

“London correspondent – have in common Mario Draghi, Mario Monti, and Lucas Papademos? The new president of the European Central Bank, the Chairman of the Board appointed the new Italian and Greek Prime Minister belong to varying degrees to the “Government Sachs” European. The U.S. investment bank has indeed woven in Europe a unique network of influence for ages sedimented through a dense network, such as underground public.
In any contest, you need a hierarchy. The first prize went to Mario Draghi, of course, vice- chairman of Goldman Sachs in Europe between 2002 and 2005. Named a partner, he is responsible “companies and sovereign.” As such, one of the missions is to sell the financial product “swap” to conceal part of sovereign debt, which helped disguise the Greek accounts. Then Mario Monti, the international advisor since 2005. Came third Lucas Papademos, who has been appointed Prime Minister of Greece, who was Governor of the Central Bank Hellenic between 1994 and 2002, who participated in this respect to the operation of faking accounts perpetrated by GS. The manager of the Greek debt is also a Petros Christodoulos, a former trader for the firm.

Two other trucks take the upper hand in the defenestration of the euro, Otmar Issing, former president of the Bundesbank and Jim O’Neill, the inventor of the concept of BRICS, the acronym for emerging markets with high potential growth (Brazil, Russia, India, China and South Africa). Former president of Goldman Sachs International where he remained a director, Irishman Peter Sutherland has played a key role in the rescue of Ireland. Finally, Paul Deighton, who spent 22 years at Goldman Sachs, is executive director of the organizing committee of the London Olympics in 2012.

#48 Aussie Roy on 11.16.11 at 4:45 am

Aussie Update

A key gauge of future demand for workers slumped for the seventh consecutive month in October, suggesting a patchy appetite for new workers by employers, while wage growth slowed in the September quarter.

http://www.theage.com.au/business/signs-of-labour-market-weakness-as-job-ads-slump-20111116-1ni5n.html#ixzz1dr8PewAL

The proportion of people planning to buy a property in the next year is at its lowest since the start of the global financial crisis, a national survey has found.

http://www.abc.net.au/news/2011-11-16/real-estate-apartments/3674600

What a SURPRISE ?.

Homeowners looking to refinance their mortgage to secure a better deal could struggle to find a new lender because house prices have fallen and the loan could be more than the home’s value.

RateCity, a financial comparison website, said this could be a real concern for borrowers and investors with properties in suburbs where real estate values have plummeted.

http://news.ninemsn.com.au/article.aspx?id=8374865

#49 Dorothy on 11.16.11 at 4:56 am

For those who consider housing a form of investment, right now is definitely a bad time to buy. It would be like catching a falling knife.
But for those who consider housing a home, a place to raise a family and make memories, it’s a different story.
This couple have been living in a tiny apartment for 10 years, and have a 5 year old child. Where’s the pleasure, or the quality of life in that? Life is far too short to put yourself through that sort of deprivation when you don’t have to. Money sitting in the bank isn’t doing anyone any good. And you certainly can’t take it with you when you die.
While I don’t advocate people buying homes when they can’t afford it, or buying homes that are more expensive than they can afford, I see nothing wrong with buying a home when you CAN afford it. And this couple clearly can.
The whole point of earning and saving money is to be able to SPEND it on things you need, and use whatever is left to buy things you want. If this family continues to live the way they are currently doing for another decade, their child will have grown up and left home and they won’t need a bigger place to live any more.
My advice would be for them to shop around, do their homework, make a few lowball offers, and try to get a modest home for as decent a price as the current market in their area will allow. Then move in and ENJOY what your years of sacrifice have allowed you to be able to afford.

#50 Ben on 11.16.11 at 5:51 am

“The cost is $3,500 a month”

That is absolutely insane, i can’t get my mind or wallet around that figure to pay for a place?
You could live in the HILTON cheaper then that on a monthly basis and she could have roses on her pillow every night.
Canada your absolutely fu&*#d !!

#51 Steven Rowlandson on 11.16.11 at 7:39 am

“Wages have flatlined while indebtedness has soared.”
It has generally been that way since the late 1960s except for government employees and other elite workers. Most tradesmen and labourers have been left in the financial dust and told to accept 10 to 20 bucks an hour or go find another job that pays about the same. These are the ones that live with out living and for the most part can not safely buy their first home or start a family. If they save, the banks pay them nothing, if they buy stocks they get ripped off by the market and if they buy gold or silver they make money but are called foolish and lumped in with the wild eyed conspiracy theorists. It is just as if men can’t be allowed to live like men in this world untill the world comes to an end. Kind of extreme but that’t what it looks like.

#52 David B on 11.16.11 at 7:48 am

Perhaps the only truth about the FW is the one bedroom apartment they are living in …. it would seem renting new digs at the cost of owning would be an easy way to predict what paying for ownership would be. But complaining cost nothing as savings grows and grows …poor poor child.

#53 bigrider on 11.16.11 at 8:01 am

Love the advice overall but your 310k ,molding over in the bank ,would not have made you $1800 a month this year unfortunately.

Seriously Garth, your rose coloured glasses need a wiping.

No, your portfolio does. — Garth

#54 T.O. Bubble Boy on 11.16.11 at 8:45 am

No $400k freehold townhomes in Toronto?

There are some Attached/Semi-Detached houses, if you move out of the prime areas.

For example, $399,900 for a semi in ‘trendy’ Leslieville:
http://www.realtor.ca/propertyDetails.aspx?propertyId=11307104&PidKey=1981519772

#55 bigrider on 11.16.11 at 8:54 am

“And history shows us they go up faster than they fall as homeowners are loathe to face reality”

Very true statement which only fuels the religion of real estate.

My conversation with a house humper the other day went along those lines. He told me that when things slowed down in 2008/9 people just removed their homes from the market thus limiting supply and supporting prices. He said that in a declining price environment, people will just take there homes off the market and coupled with large influx of immigrants yearly, that action alone will support prices.

I have to give him a point for that observation I guess. Again ,the love affair with real estate is a force on to itself here in T.O.

“Of course the party can continue for a while” .

This is what I am afraid of. The party continues, like, to 2020. By then, global problems are fixed and then we see the real price increases..UGH!

#56 Darlene on 11.16.11 at 9:00 am

#12 Smoking Man

Nice analagy but sometimes the cow wins. One was smart enough to stay out of harms way.

http://www.spiegel.de/international/zeitgeist/0,1518,783107,00.html

#57 bigrider on 11.16.11 at 9:03 am

#53 Garth to Bigrider -“No, your porfolio does”.

I got to stop by the bunker one day with the bike and pick up some of the stuff off your property you’re smoking….

#58 Pr on 11.16.11 at 9:13 am

A decade of house owner that makes a fortune by simply owning a house! And the people don’t see a problem their, like its normal. No its not normal. A house, in a country were the government and the people take care of each other, don’t allow a house the be part of a casino game. Because of the Pain and suffering when the casino game stop. A 2% higher interest rate and the game is over, you will see the reality of this illusion. Minister Jim Flaherty you know whats cumming… and its not fun. I am not going to be part of your casino game. From now on I rent! Until some one in charge more competent clean up this mess.

#59 JohnnyBravo on 11.16.11 at 9:14 am

#42 Makaya on 11.16.11 at 1:53 am

Yeah, but Peter Schiff also bought a house recently (either this year or last, I forget). He was always very proud of the fact that, as a very wealthy man, he rented his primary residence because it made better financial sense than buying. In a televised interview, he explained his recent home purchase with little more than a shrug. Maybe he just got a really good deal.

#60 Gerardo on 11.16.11 at 9:31 am

#39 Country Bumpkin

Below are few high dividend paying ETFs

FIE, Banks,~7.4%
CBO, bonds, ~4.6%
XPF, Preffered, ~5%
ZWU, Covered calls utilities, ~9%
ZWB, Covered calls banks, ~9%
ZEF, Emerging market bonds, ~5%
CYH, ~4.3%
Do your own research, diversify and you could add some gain on top of that dividend.

#61 Hammer1 on 11.16.11 at 9:37 am

#36 Excellent
BUT sometimes, this is how the farmer treats his herd
http://www.mercyforanimals.org/ohdairy/
enjoy your milk and cream this morning !

#62 Ward Cleaver on 11.16.11 at 9:38 am

WI Boomer #2

That is not a suburban shit box cowboy. It is in the Kingsway district of Etobicoke which is and has always been a very pricey area a mere stone’s throw from the subway. The day the Kingsway reaches the depravity of some of your American cities is the day Garth becomes the president of Remax Canada.

#63 Chuckles the Clown on 11.16.11 at 9:40 am

Hey stand in for Disciple. I need my daily dose of belly laughter. Please post Disciple’s daily message. You are one witty person, better than Mr. Disciple himself. I am waiting…

#64 Jesse Livermore on 11.16.11 at 9:41 am

#53 Big Rider

Are you questioning the investment abilities of our fearless leader Big Rider?

#65 In Garth We Trust on 11.16.11 at 9:42 am

Hey Garth, when are you going to start your own hedge fund?

No, but I’m considering a shrub fund. — Garth

#66 Builder Bob on 11.16.11 at 10:05 am

#13 Johny Bravo

No surprise there Johny. I know people in the construction trades and you get jobs by low balling and then cutting corners and making money on extras. The quality of wormanship has plummeted in the past decade.

#67 Aussie Roy on 11.16.11 at 10:07 am

The American on 11.16.11 at 1:13 am

#11: Stinky the Fish, I appreciate your comment.

This will be a slow and painful drop over many years time, much like what has been experienced in the U.S., Europe, and now Australia. Canada and China are next. This is NOT something that happens in a matter of a few months or even a year. This is a very long process.

………………………………………………………………………

And I would add even when it’s (falling house prices) been going on around you for many months, most people still don’t see it. Just ask an Aussie in the street, still no bubble here and houses never go down, much.

I love the way many here have now added “much”.

It’s the blind faith we could never have a housing bubble here, (like Canada?) that I just can’t understand.

Yep agree, it’s going to be slow death over several years, maybe even a decade plus, if the bubble takes as long to deflate as it did to inflate here in Australia.

#68 husband of happy wife on 11.16.11 at 10:15 am

Garth,

What’s your favourite sector when picking ETF’s?

#69 JohnnyBravo on 11.16.11 at 10:22 am

#66 Builder Bob on 11.16.11 at 10:05 am

Absolutely.

#70 JohnnyBravo on 11.16.11 at 10:27 am

#49 Dorothy on 11.16.11 at 4:56 am

Good post.

#71 canadarocks69 on 11.16.11 at 10:30 am

#61 Hammer1: could only watch about 2 mins of this video, what the hell is so %$#@ up with some people to cause them to do this. be a human or animal no living thing deserves to be treated like this.Its times like this that makes me sad to part of the human race.

#72 Living in AB on 11.16.11 at 10:41 am

#39 Country Bumpkin,

Linn Energy (Line): 7%+ dividend yield
Enbridge Income Fund (EIF): 7%+ Dividend Yield

Just a couple examples. Go talk to a credible advisor and they can build you a nice portfolio paying you 7% + on a monthly basis (Cash not speculative growth).

#73 Canadian Watchdog on 11.16.11 at 10:44 am

First post here…

Long-term investment advice requires long term analysis. The chart below shows how GTA prices have decoupled from housing starts, indicating average prices are being driven by more bidding or resales (flipping) relative to new condo/housing starts. Other TREB stats indicate that detached homes is the main contributor to median house prices.

With no doubt, cheap money is and has been the primary factor in supporting rising prices, however, in recent years, new trends in foreign investments (capital flight) and residential REITS are offsetting the decline of domestic/local home buyers.

http://i42.tinypic.com/symae1.png

Great blog and I look forward to sharing some charts of interest.

#74 NoName on 11.16.11 at 11:03 am

“They call them CONDOMiniums because the developer gets to screw the buyer without incurring risk.”
1980s Toronto joke, source unknown.

if this is not catalyst for RE prices in Toronto, nothing is… paper written by
Ted Kesik, Ph.D., P.Eng.
Professor of Building Science
University of Toronto

http://www.cbc.ca/toronto/features/condos/pdf/condo_conundrum.pdf

“Real Estate Industry
Consumer education is not a hallmark of Canada’s real estate industry. Purchasers are commonly warned that
insisting on a home inspection may jeopardize their offer, and there is little, if any, formal training in building
technology required to become a real estate agent. Explaining the potential pitfalls of a glass condo tower
building may be in the best interest of the buyer, but not the agent. How much should real estate agents know
about buildings, and how much of this should they divulge to prospective buyers? One way to approach an
answer to this question is to compare what real estate agents charge for their services compared to the
architects who design the buildings. Typically, real estate agents receive a 5% commission on their sales,
whereas architects receive on average approximately 8% of the value of the building as their total fee, which is
shared with their engineering consultants. Architects are obliged to know everything about the buildings they
design and are professionally liable for errors and omissions. They must also provide expert opinions to their
clients for all aspects of the buildings they design. Why should real estate agents not be required to possess a
competent knowledge about the buildings they are selling? Buyer beware would not be considered an ethical
position for architects and engineers serving the public. Compared to all of the work involved in designing and
specifying the various components, assemblies and systems that make for a modern building, it is not
unreasonable to expect real estate agents to be forthcoming with vital information about the durability and
operating costs of the buildings they are selling. Explaining the potential problems associated with glass condo
towers that have been identified by technical experts to their prospective buyers, would be no different than a
general practitioner explaining the risks associated with certain medications and procedures to their patients.
The real estate industry has not taken a proactive approach to such issues yet it is usually the first point of
contact for consumers of real estate.”

#75 bigrider on 11.16.11 at 11:18 am

#64 Jesselivermore to bigrider. -“are you questioning the investment abilities of our fearless leader”

No, just maybe his primary math skills .

#76 refinow on 11.16.11 at 11:21 am

Why prices go up faster then they go down…

Resale homes

The answer is easy…. People who are buying today are not normally turning around and selling, so the record high price remains just that…

The people who are actually selling are usually ones who have owned for at at least 3 years or significantly longer. So as prices come down, these reductions in house prices are undetectible.. 82 year old widow sells the house she paid $35,000 for $500,000. If she sold it 6 months ago, maybe she could have got $575,000. But that loss is transparent, she still made $465,000.

What i think is funny is the how it is getting more difficult to show positive market trends, so they keep changing the comparible data. If last month does show favorable, then they look at 1 year ago, if that doesnt show favorable they compare it with something else.

Lately they are trying to sell us on how much the value of homes went up compared to 10 years ago…. Sure that will be a possitive trend for quite some time….

IF you want to know how the market is really doing…

Talk to the lawyers who are not nearly as busy, the home inspector who normally does 10 – 15 inspections in a week, who has only done 1 this week. The moving companies, who are not getting nearly as many new bookings… Realtors with absolutley no traffic in their openhouses…

We always hear about the one house that went into competition and sold for $100K over list with 13 offers… Who was to say that the vendor and realtor purposly undervalued the listing to get the bidding war going, and that was actually what the real price should have been ….

Realtors are avoiding price reductions on the MLS by removing it from the data base, and re-entering it as a new listing… Now it is at a lower price but the system is not tracking it as a price reduction…

#77 Canadian Watchdog on 11.16.11 at 11:23 am

Sorry all. I had my excel columns mixed up. Here is the revised historical TREB chart http://i42.tinypic.com/symae1.png and another with GTA average prices http://i41.tinypic.com/2whphg8.png

#78 JohnnyBravo on 11.16.11 at 11:30 am

OK. I have to share this with everyone:

It deals with how real estate was used in the United State to perpetrate the biggest fraud in US history, with the goal of funding a “black budget” which was and is being used to create what is effectively a secret or unofficial government. This is similar to the “deep state” concept proffered by Michel Chossudovsky and others.

The info comes from Catherine Austin Fitts. I have seen/heard many interviews of her; and I have read some of her writings and info at her web site solari.com.

Fitts was Assistant Secretary of Housing and Federal Housing Commissioner in the first Bush administration, a Wall Street investment banker, and now, a financial advisor. Was was an “insider” turned “enemy of the state.” She knows her stuff.

Below is a link to a two-part interview called “Unpacking Mr. Global”, which she gave to Bonnie Faulkner of Guns and Butter on KPFA radio. It is an excellent overview and explanation of Fitts long-standing thesis of a financial coup d’etat. In fact, you can read about it here, as well: http://solari.com/blog/financial-coup-d'etat/

The link to the two-part interview is below. I highly recommend giving it a listen. People who are new to this discourse will be shocked.

http://www.kpfa.org/archive/show/34

#79 $399 doesn't get you much on 11.16.11 at 11:36 am

just a quick response to T.O. Bubble Boy, and thx for the link….

it is discouraging that this small semi near Eastern and Leslie that needs tlc (ie complete renovation) can command $400K. When they only show one pic, you know it’s rough inside.

10 years ago this place would have been about $150-$160 max. Which is still overpriced imho.

Toronto RE is a joke. again, my opinion.

I am going to move to the Hammer, even though I love T-Dot. time for a change.

#54 T.O. Bubble Boy on 11.16.11 at 8:45 am
No $400k freehold townhomes in Toronto?

There are some Attached/Semi-Detached houses, if you move out of the prime areas.

For example, $399,900 for a semi in ‘trendy’ Leslieville:
http://www.realtor.ca/propertyDetails.aspx?propertyId=11307104&PidKey=1981519772

#80 In Garth We Trust on 11.16.11 at 11:37 am

No, but I’m considering a shrub fund. — Garth

Your witty ripostes need to be put together in a book one day!

#81 Daisy Mae on 11.16.11 at 11:43 am

Etienne on 11.15.11 at 10:18 pm
#3 dodgedbullet
“me, I cannot wait for the book.. I hope it is still scheduled for the fall…”

********************************

This IS the fall…and I keep checking Chapters.

I indicated some time ago it will be a Spring release. You will have to suffice with some other pathetic Christmas gift. — Garth

#82 Roial1 on 11.16.11 at 11:50 am

Hi, All.
Just back from 2 months in Europe and can offer some outside observations.
Over the pond, people don’t buy as often as over here and these are two reasons why.
1. Elderly couple: rented the appt. they live in for over 40 years.
Life style:
Got to health spa twice a year for month. Travel out of Europe at least once per year.
Live well on two pensions
No debts!

2. Mid 40s couple one teenager:
Ski every other weekend at different resort.
Own 2 year old BMW.
Travel out of Europe once every summer for 3 weeks and to Turkey every winter for a week.
She is a cook at a small resteraunt and he is a traffic co-orinater for a furniture co.

Its about lifestyle.

Renting is NOT the problem, DEBT IS!

#83 eaglebay - Parksville on 11.16.11 at 11:54 am

#61 Hammer1 on 11.16.11 at 9:37 am

Why would you go out of your way to find such abuses of animals?
The video shows that there are sick people everywhere. It does not represent the 99.9% of the dairy or cattle farmers.
Trying to use a stupid exception to make a point is a bit sick, don’t you think?
Maybe you should stick to your porn. What else do you look for on the web?

#84 In Garth We Trust on 11.16.11 at 12:02 pm

#78 Johny Bravo

What is often overlooked in the profusion of credit that abounded in the US of A during the heady days of the subprime rage was that there was money to be made by astute investors who were able to access funds and crystallize these into profits and gains. Those who merely used the easy credit for conspicuous consumption lost it all but those that knew how to use the cheap money to their advantage made out quite nicely. Same can be said for Canada and the ultra low rates we have had this past decade. Not everyone in Canada has gorged themself to death on cheap credit in the pursuit of conspicuous consumption, some have used the cheap rates to invest wisely.

#85 Form Man on 11.16.11 at 12:09 pm

#38 DA

BC Real Estate Association figures show Kelowna prices have dropped 14.3% from October 2010 until October 2011. How do you explain that to the 5% downpayment buyers from last year ? You told them prices always go up. Now they are seriously underwater. What are you telling your current buyers ? You told us that prices have held firm in the Okanagan. Not from what I have seen, and apparently not from the stats either. Of course you go with your gut instinct rather than facts……….maybe that is another way of saying untruths ?……sure glad I am not one of your buyers…….

#86 jess on 11.16.11 at 12:14 pm

…and then they “bury the skull” is that right smoking man?

agricultural land ?
look at the chart midwest farm land price change %

http://economistsoutlook.blogs.realtor.org/

Voodoo whodo

Running with a Bad Crowd.htm – Stew Webbwww.stewwebb.com/Running%20with%20a%20Bad%20Crowd.htmCached
You +1’d this publicly. Undo
real estate developers with whom the S&L had cozy and. possible illegal …. couple years pursuing oil and natural gas leases for Amoco. Production Corp., the

http://en.wikipedia.org/wiki/Savings_and_loan_crisis
^ “Lessons of the Eighties: What Does the Evidence Show?” (PDF). FDIC. September 18, 1996. http://www.fdic.gov/bank/historical/history/vol2/panel3.pdf.
. L. William Seidman, former chairman of both the Federal Deposit Insurance Corporation (FDIC) and the Resolution Trust Corporation, stated, “The banking problems of the ’80s and ’90s came primarily, but not exclusively, from unsound real estate lending.”[6]

#87 bigrider on 11.16.11 at 12:21 pm

I would still like to know who or what qualifies as a “real estate expert”

#88 45north on 11.16.11 at 12:22 pm

Canadian Watchdog: interesting chart of TREB sales 1953 and 2011. It does show a significant decline in sales volume from 90,000 in 01/01/2007 to 70,000 in 01/01/2011.

cheap money is the primary factor in supporting rising prices, however, new trends in foreign investments and residential REITS are offsetting the decline of domestic/local home buyers.

domestic/local home buyers is what Mark Hanson calls organic sales

#89 Kilby on 11.16.11 at 12:28 pm

While in Victoria last weekend we visited with an old friend who has been a financially successful realtor for over 20 years. She said that this has been the most difficult time in her career, has 2 SFH and 5 condos listed but says for the first time wants out of the business. The biggest problem it turns out is convincing vendors that in order to move their properties they have to accept that times have changed and if they REALLY want to sell that they have to lower their prices. Problem is they all watch the news and KNOW that their place is worth a LOT. Sad as they just don’t sell….I wonder how long before the mainstream becomes aware.

#90 Devore on 11.16.11 at 12:30 pm

#30 Angela

Garth, how can you really compare buying a house to dot com stocks? Other than the speculative aspect of it at the end of the day people that bought dot coms were investing into thin air where at least people investing in a house can live in it, at the very least. The house can’t disappear into thin air like company stock can.

Your equity can easily go to zero, and below, unlike with stocks. And when it goes to zero, you still get to keep paying for it more than rent.

#91 JohnnyBravo on 11.16.11 at 12:34 pm

#84 In Garth We Trust on 11.16.11 at 12:02 pm

Vis-a-vis my post on the Catherine Austin Fitts interview, the issues discussed go light years beyond mere profligate credit. It’s about how global society and governance is being reengineered through finance and fraud. This is for people who can look beyond the four walls of their Canadian homes.

#92 JohnnyBravo on 11.16.11 at 1:02 pm

#90 Devore on 11.16.11 at 12:30 pm

Hate to be posting so much, but I can’t let this go.

Devore, what the heck do you mean ‘Your equity can easily go to zero, and below, unlike with stocks.’?

Stocks can easily go to zero, wiping out equity. It happens quite often. Remember, common shareholders are the ‘bitches’ in the capital structure. They get paid last (if at all) when a company gets into trouble.

Homes can go to zero, but this is so extreme, it rarely happens en masse outside of Detroit. And any home always has value to those living in it. You can’t live inside a stock certificate.

#93 Nonno Nicola on 11.16.11 at 1:06 pm

#87 Big Rider “I would still like to know who or what qualifies as a “real estate expert.”

Ah Bigga Rider, I gonna tella you who is da reala stata experto. It is me Bigga Rider. I buya the propertia as soona as I get offa da barca and starta to maka da moneta. I buya lotsa housa in the 50s and in the 60s for just peanutsa Bigga Rider. I collecta da renta for lottsa years and now the housa worth lottsa moneta and I maka lotsa renta over da yearsa. Nonno Nicola even buya some terra near Toronto in da 60s and solda da terra for milioni in da last couple of yearsa. You wasta your tima Bigga Rider with da stocka marcata. I no even go to grada 5 and I am a millionario Bigga Rider, all with da real estata. Imagine iffa I go to grada 6!

#94 In Garth We Trust on 11.16.11 at 1:13 pm

#91 Johny Bravo

Thanks for the clarification and I will check it out. Finance and fraud have been dancing partners since the first caveman walked into his local pawn shop.

#95 Victoria on 11.16.11 at 1:17 pm

Kilby,

While the MSM keeps pumping RE it will take forever. I get the private client listing service and cannot believe how many homes are for sale and just sitting. I have all over Victoria, Elk Lake, Saanich etc. etc. $500,000 plus and the amount of homes over 1 million is just crazy. People are still asking stupid prices for really bad homes.

#96 Van guy waiting on 11.16.11 at 1:20 pm

Well lady, your husband waited too long. If u bought 10 years ago, you would probably have your home paid off by now. Then you could sell now, rent, then buy again later. You probably shouldn’t buy for another 3-5 years. That means you have waited up to 15 years. If your husband was chicken to buy 10 years ago, that means he’s never going to buy.

Foolish words. — Garth

#97 Regan on 11.16.11 at 1:21 pm

To the frustrated wife, I suspect you’re still in a 1 bedroom with a kid because you’re in a stalemate, or ‘waiting to buy.’ It’s easy enough to add rentals to your regular perusal of available homes. Depending on the area, there may be fewer rentals than homes for sale, but at least you’ll be comparing apples to apples. What you want is a home where you can settle in. I’ve been searching my target area too and it’s simply cheaper to rent a comparable property than it is to buy. Also, if you got even 3% from that downpayment you’d have $9000/year to either subsidize rental cost or sock away as a hedge against future real estate gains, or just spend on a really nice holiday.

#98 Victoria on 11.16.11 at 1:27 pm

You know what I would like to do. Sell this money pit of a house – buy some land outside of Victoria Elk Lake not huge maybe even an Acre – and live in a trailer for a bit. We would need 2 house trailers actually – one for me and one for the husband and the kids :-) People think I am kidding but i would really like to do that and when things settle actually build a house that works for me and my family.

#99 Devore on 11.16.11 at 1:45 pm

#76 refinow

Realtors are avoiding price reductions on the MLS by removing it from the data base, and re-entering it as a new listing… Now it is at a lower price but the system is not tracking it as a price reduction…

This fools no one who knows what they are doing. Realtors can see past listings for any address. The main purpose of relisting is mostly appearances:

1. listing is now “new”, goes on top of the list and gets on hot lists
2. days on market of listing gets reset
3. no price reduction apparent

#1 can easily be accomplished by dropping the price. Price changes will hit hot sheets too. Sometimes you see a price reduction of $1, that’s what they’re doing.

#2 and #3 are easily solved by consulting a decent realtor, so it would only server to make potential buyers horny over being the first to jump on a new listing. Unlike in the US, where places like Zillow have full access to listing services, in Canada only licensed realtors can see listing history and other details.

#100 Canadian Watchdog on 11.16.11 at 2:02 pm

#88 45north: Yes, Toronto sales have been lagging since 2007. You can interpret it better when looking at the price-to-sales ratio chart below showing higher prices during peak and low seasons. I wish I had some data to filter out foreign home purchases and even foreclosure data like the states provides. I’m also very curious why CMHC doesn’t disclose foreclosure data—I thought there would be enough corporate interest to file a FOIA to obtain data.

http://i40.tinypic.com/6zwz5x.png

Although sales volume lags, home prices have returned some rewarding profits if you got in early enough—but like all asset bubbles, profits are only realized when the asset is sold.

http://i43.tinypic.com/zx45tu.png

#101 OttawaMike on 11.16.11 at 2:14 pm

Further to my post yesterday. Out of the district I live in around west central Ottawa there were 20 sold houses during the past 60 days.
9 of these sold for over asking:
http://oreb.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1992647828&s=OTW&t=OTW

Or as Smoking Man might say:”Sorry Bubbleheads, the curvy, well fed lady is not singing yet”

Like I have said before, these are extraordinary times with gyrating investment markets, record low interest rates and housing providing the masses with what seems like stable net worth growth.

Predict all you want but the Hindenberg is not even close to arriving in Lakewood New Jersey. It is still somewhere over the Atlantic.

Which means you still have time to prepare, right? — Garth

#102 Beach Girl on 11.16.11 at 2:16 pm

#197 TurnerNation on 11.15.11 at 11:12 pm

And are still awaiting a report from Beach girl’s psychriatrist exam. Should be interesting.

Would never dream of going to one of those mind benders. They have more hang-ups than Cadet Cleaners.

I am fascinated by the OCCUPIERS, just knew that was going to happen. These people are stoned, voiceless, NCR (mental disfunction) Not Criminally Responsible.

I truly feel sorry for most of these people as there is absolutely no hope. These are treacherous times.

One of my friends is a nurse at Whitby Phys. Hospital. One of their patients took a hiatus down there and got “F” up on crack. Stayed 3 days. Got lonely, cold and scared, he went to the police station and told him he had run away from the hospital. They didn’t believe him. Took a while to figure buddy was telling the truth and took him home were he wanted to go. Honest.

#103 Kilby on 11.16.11 at 2:28 pm

#98 Victoria.

Central Saanich used to be so nice, getting pretty built up now. We would buy in North Saanich but crappy 1960 and ’70 houses are still asking $699 area. If one doesn’t have to be in Victoria there are nice acreages around Qualicum, Nanoose and Yellow Point in the high $400’s BUT, they are not selling either, we have put off any (cash) purchases to next summer hoping by then that the vendors will want to move on and adjust prices accordingly.

#104 Devil's Advocate on 11.16.11 at 2:31 pm

#85Form Man on 11.16.11 at 12:09 pm

#38 DA

BC Real Estate Association figures show Kelowna prices have dropped 14.3% from October 2010 until October 2011. How do you explain that to the 5% downpayment buyers from last year ? You told them prices always go up. Now they are seriously underwater. What are you telling your current buyers ? You told us that prices have held firm in the Okanagan. Not from what I have seen, and apparently not from the stats either. Of course you go with your gut instinct rather than facts……….maybe that is another way of saying untruths ?……sure glad I am not one of your buyers…….

Firstly, I do not believe Kelowna real estate prices have dropped 14.3% from October 2010 to October 2011. None of that historical statistical data I am privy to suggests such a drop in the last 12 months. In fact, for the last three years, since 2008 when prices did drop about 14.3%, both prices and volumes have remained constant.

On the 5.0% buyer thing; I have never told anyone that “prices always go up”. I have always explained that real estate is cyclical. I have always explained, with very demonstrative examples, that you cannot time the market. I have always said that speculation in real estate is no less a gamble than anything else can be. I have always advised during these times of ultra-low interest rates any prudent buyer ought to consider them a short term gift and buy on the basis of something more in the 7 to 8% range at least.

As for any of the buyers I assisted being under water; there are none that I know of. We update our past buyers with an annual market evaluation of the home they purchased through us. Rarely has any proven to have dropped so significantly in value even in that period of significant capitulation three years ago. There is one case I can think of though and in that particular instance we did sternly advise them not to pay what they ultimately agreed to pay for that property. But they did buy the home for the long term and had a significant down payment so I really doubt they are under water.

It’s about location Form Man. Up to three years ago location took a back seat to hardwood, granite and stainless. We never fell for that lure always counselling our clients to consider location above all.

My “gut instincts” Form Man are a personal tool I use to guide me and my actions, not something I put forward to others as historical fact. The fact is prices have remained stable these past three years. I can prove that. I cannot prove what my gut instincts tell me might happen in the future and I NEVER would suggest to a client that they should listen to and rely upon my gut instincts in that regard. I just plain do not have a crystal ball. When pressed by a client for my thoughts on the future of real estate as they so often will ask I express them but qualify them as only my personal “gut instincts” on the matter stemming from my education and experience but that they should not rely upon that information alone in making a decision today for the future. Clients expect me to express my opinion on matters of real estate that is in part why they hire me.

My university degree in economics and business (ya some of us actually have more than a 9 month correspondence course) and my subsequent 30 year search for one has taught me that there is no crystal ball Form Man. Trying to time the markets is just a matter of luck. If you buy at the peak or sell at the low you are unlucky and if you sell at the peak or buy at the low you are lucky. The very best long term strategy is to buy in the “safe zone” (somewhere in between the two).

If you are always in the market, own a home, you can know with reasonable confidence when the market is up or down and make a purchase or sale closer to but not at the most advantageous time. For the only way to know when such a time has occurred is after it has passed.

The past is fact the future is conjecture.

#105 Devil's Advocate on 11.16.11 at 2:41 pm

” Realtors are avoiding price reductions on the MLS by removing it from the data base, and re-entering it as a new listing… Now it is at a lower price but the system is not tracking it as a price reduction…” – #76 refinow on 11.16.11 at 11:21 am

REALLY?!? You think so? And how would that possibly be of benefit?

The real reason: An overpriced listing becomes shop worn and stale. Buyers start to avoid it thinking there is something wrong with it – and there was – THE PRICE! So a REALTOR will cancel the listing let it settle and then bring it back on as a “Hot New Better Priced Listing”.

Everybody is an expert. They all think they know real estate because they live in a house and have it professionally staged al la WALMART.

#106 dd on 11.16.11 at 3:20 pm

So much for deflation scare. WTI at $102.00

#107 Makaya on 11.16.11 at 3:23 pm

The new GEAB newsletter is available. In their previous newsletter, they forecasted the failure of major financial institutions… And what happened since then? (cf MF Global)

As I keep saying, now is a good time to play safe with your money…

http://www.leap2020.eu/GEAB-N-59-is-available-Global-systemic-crisis-30000-billion-US-dollars-in-ghost-assets-will-disappear-by-early-2013_a8148.html

#108 jess on 11.16.11 at 3:25 pm

…the experts are empowered with devices: smart phones , wireless lockboxes /mapping data – footcontrol etc…so that they can harness this data as as a leading indicator ;^)

REALTORS® Federal Credit Union
REALTORS® Federal Credit Union – SentriLock Financing Program
——————————————-

News for foley minnesota privatizing police force
Minn. town to replace police with private security force
usa today

#109 Snowboid on 11.16.11 at 3:28 pm

#104 Devil’s Advocate on 11.16.11 at 2:31 pm…

Give up, you are no match for Form Man and never will be. In fact, you are no match for anyone that responds to you on this blog.

Wow, a degree in economics and business! How come you ended up as a salesperson?

You are indeed delusional, and if there was a category on Prof. Turners’ blog for the RE industry equivalent to a ‘Greater Fool’ you would win hands-down.

If anything, you can be given credit for maintaining the poor reputation of the RE industry as a whole. I’m sure your peers love you as much as we do!

#110 JRoss on 11.16.11 at 3:32 pm

DA,

“In fact, for the last three years, since 2008 when prices did drop about 14.3%, both prices and volumes have remained constant.”

Now even you are disagreeing with yourself.

#111 JRoss on 11.16.11 at 3:36 pm

“The fact is prices have remained stable these past three years. I can prove that.”

We’re waiting. Or do we have to email you first?

#112 bigrider on 11.16.11 at 3:36 pm

#93 Nonno Nicola

ROTFLMAO !!!!

Avete fatto bene nonno Nicola

#113 Bottoms_Up on 11.16.11 at 3:41 pm

Dear Frustrated Wife,

Email or call Garth and get him to invest your money for you.

#114 Al on 11.16.11 at 4:00 pm

Just hear on the radio (680 News) that the Toronto Real Estate Board is saying that people who bought homes in the GTA last year have an average $50,000 increase in value based on average sale prices and they expect another increase of $50,000 by end of 2012 !!

Then it must be true !!! — Garth

#115 Kilby on 11.16.11 at 4:01 pm

Kelowna, North and South.
401 residential listings today.
In the last 7 days 9 sales have completed in these areas, the most expensive going for $366,000 after 111 days on the market. Pretty sad situation.

#116 Habs 76-79 on 11.16.11 at 4:12 pm

Reality and the truth always given time reveal themselves. No amount of delusions, distortions and even out right lies can keep reality and the truth covered forever.

This is a fact of life but one all too many people want to deny in an orgy of exuberance, selfishness, lust and greed.

Those that refuse to accept reality and the truth will given time and circumstance get what truly is coming to them in the end.

#117 Form Man on 11.16.11 at 4:18 pm

#104 DA

So one should disregard the stat from BCREA. They are wrong and you are right ? You took 550 words to say nothing and actually contradict yourself. This is what a university education has provided you ? I am astounded………..and amused…………

#118 Chuckles the Clown on 11.16.11 at 4:22 pm

.#33 Disciple’s replacement poster for this coming week while he’s on vacation

Come on Disciple’s replacement, where is the friggin message from Disciple? I need my belly laugh for the day. Please post!

#119 Disciple's replacement poster for this coming week while he's on vacation on 11.16.11 at 4:24 pm

Ok, due to popular demand I am back for another posting. Thanks for all of your positive comments. Just a quick update on D’s vacation. The Montezuma’s revenge cleared quite nicely. Pepto and Immodium are a must on those Mexican vacations. As for the jellyfish bite, D told me a local just peed on his leg to lessen the swelling.
So, I promised you that I would share some helpful hints on how to hypnotize and control Garth. As you know, we are influenced a great deal by those in power that employ covert methods to control our minds. This is occurring every minute of our day, as we shop, listen to the radio and view TV and the web.

The web, yes the web. This is where Mr.Turner is a master. He has learned how to gain a certain and comfortable rapport with all of his “loyal” readers. I will teach you what Mr. Turner is doing, to keep you returning to this site day after day, even several times a day, like mindless zombies. You feel that you can’t get enough of the G-man.
If you learn these techniques, I assure you that you will be able to convince anyone to do anything and buy anything, as long as it remains true to your moral compass. For instance, Garth would not be able to convince many of you to strip your clothes off to read this blog. ( some would though-Beach Girl, nonplused, DA, SM,Nosty?)
Step 1:
Gain a quick rapport with the person or people (laugh at their jokes, pay them a compliment, give them something for free (garth’s method)

Step 2: Switch off the Critical Mind
After building rapport, you can now use covert hypnosis techniques to switch off the critical mind of the listener.
One of the ways to do this is to use the words “Imagine”, “What if” etc. When you use these words, the critical mind immediately shuts off, thus making the imagination work. This is very important, because we are only doing the things that we could imagine before, so invoking the mind’s eye of the listener will help you to send commands to his (her) subconscious.
Garth likes to use the phrase, “As I’ve told you”.

Step 3:Make Irresistible Hypnotic Commands
After bypassing the critical mind of the listener, you can now make your irresistible commands and describe the things you want a person to do.Insert(do not buy gold or silver, buy ETFs instead)
Covert hypnosis is that simple. In covert hypnosis, your success will depend on the depth of rapport, your hypnotic language and how you follow the covert hypnosis technology.
Don’t forget: you can hypnotize anyone without his or her awareness. The only thing you should do is to follow the covert hypnosis techniques.
In future postings I will teach you how to resist G’s hypnotic commands, to avoid his influence. He will be powerless to control you. But we, en mass, will control
him.

#120 Timing is Everything on 11.16.11 at 4:29 pm

#116 Habs 76-79

disciple?

#121 Robert Dudek on 11.16.11 at 4:39 pm

#27 wrote

The only child going to a private school (1800$/month) though. That is with our income of 160k.

If this is in Toronto this is just nuts. How much advantage is your kid going to have versus a good public school in a good neighbourhood? A negligible one. When he/she hits uni he/she is going to sink or swim on his/her own merits anyways.

Save that tuition money for law school or medical school, should the kid decide on one of those paths.

And I hope you are maxing out the RESP for the kid.

#122 jess on 11.16.11 at 4:48 pm

beach girl said “These are treacherous times.”

Indeed! Is that lady macbeth on the cake? All those who have trouble acknowledging tend to sleepwalk.
===================
embezzling nun who got shunned as punishment for stealing the school money to play the slots….
higher tuition fees to cover the 1m. I wonder if the sister was on a winning streak if they would be as angry.

#123 Van guy waiting on 11.16.11 at 5:05 pm

So any word in how much those Muskoka condos auctioned for?

Not until next month. — Garth

#124 Humpty Dumpty on 11.16.11 at 5:16 pm

Like a gold ring in a swine’s snout is a beautiful woman without discretion.

Maybe during a marriage counselling session with you G, you could recommend moving to Cleveland. Or better yet St.Cathrines.

Bulldozers work well in the mud. Especially when there driven by the female species.

This blog is out of control. — Garth

#125 Habs 76-79 on 11.16.11 at 5:25 pm

Timing Is Everything.

NOPE! I am not Disciple. I’m my own person and my handle here Habs76-79 (any hockey fan will be aware of that label) is only a representative title for me here.

My point stands about the world of reality and the words of truth. Too many people for mostly personal and selfish reasons try to live to deny truth and reality. Delusions, lies and distortions in life and rhetoric of such can lead many to stray away from reality land.

#126 Devil's Advocate on 11.16.11 at 5:50 pm

Give up, you are no match for Form Man and never will be. – Snowboid

No? I thought I was doing rather well. And, I remind you, I am not the one running from this competitive Kelowna market with my tail between my legs.

#111JRoss on 11.16.11 at 3:36 pm

“The fact is prices have remained stable these past three years. I can prove that.” – D.A.

We’re waiting. Or do we have to email you first?

Seriously, would you believe me? I said I can prove it – mere posting of the data on this site is hardly proof regardless the source. I am most willing to take you by your infant hand and instruct you how to use the MLS system (the real MLS system) to pull up the raw data that shows you the exact statistical information you seek to prove or disprove.

The pups and poodles on this “pathetic blog” never hear anything but what they want to hear. They consistently and persistently twist truths by knaves to make a trap for fools – the biggest of fools being themselves. Is it any wonder Garth nicknames this a “pathetic blog”?

What prey tell would I have to gain by misleading the pathetic posters on this “pathetic blog”? Seriously. What most of you do not realize is you are in such a minority your pathetic existence means nothing. You influence nothing and I doubt your illustrious leader takes you seriously as he watches you spiral into an abysmal hole of despair despite his warning you there is going to be NO CRASH.

I give up. Really my time here has, but for periods of utter frustration, been of good intent and to provide you with some alternate information that you should consider. But You are beyond saving. In a world of uncertainty where it seemed we were destine for financial calamity how are you doing? What I can tell you is there are many who are doing just fine. There are many home owners who have seen the equity in their homes increase to such an extent they can weather that “inevitable financial storm” your crystal balls predict. Did they who sold you those crystal balls garner your interest in a bridge as well?

You are gamblers – plain and simple. You might as well spend it in Vegas and have a good time.

I am not saying, nor have I ever said, real estate is your best investment. What I have always maintained is be it owned free and clear, mortgaged or rented – a roof over your head is one of life’s more costly necessities. You can continue paying for it until the day you die forever at the whim and fancy of your landlord or you can build equity in it and control it as a part of your balanced long term investment strategy. But make no mistake if you are not IN the market and trying to time your entry you are a gambler. You can not time the market. The smart money knows timing will find them but to do that they must be in the market.

Good luck gamblers… you are going to need it.

#115Kilby on 11.16.11 at 4:01 pm

Kelowna, North and South.

401 residential listings today.

In the last 7 days 9 sales have completed in these areas, the most expensive going for $366,000 after 111 days on the market. Pretty sad situation.

That is absolutely correct Kilby. You must be a REALTOR to have such timely access to those MLS Stats.

But I must ask: So what of it Kilby? The sub areas of Kelowna North and South constitute little of the whole Kelowna market. 9 sales in the last 7 days on an inventory of 401 is demonstrative of less than 12 months inventory (10.28 months worth to be exact). Of that inventory a swack of them, you and I both know, are just fishing so are they really on the market?

#127 tkid on 11.16.11 at 5:53 pm

Everybody is an expert. They all think they know real estate because they live in a house and have it professionally staged al la WALMART.

Dude, get with the program !!!

Professionally staged a la Costco and Ikea !!!

#128 rana on 11.16.11 at 6:05 pm

The frustrated wife should be glad that her husband has the balls to live in a one bedroom apartment (although I would upgrade to a two bed- with the 5 year old maybe the frustration is due the lack of sex).
Anyhoo, not living up to the expectations of others, swallowing your pride and suppressing your ego are much more difficult then being fooled into buying a brand new shiney home. With all the savings and money they have she should be less frustrated and more relieved she didn’t marry a D-Bag who spends all their money on bling and expensive cars. I don’t get what women want from men these days- they want a man who makes money, responsible, accountable yet spend all their money on them. If she wants a bloody house then make some damn money of her own and buy a god damn house. No one is stopping her. Do I sound bitchy again? Oh well. If everyone had to work hard for their money they would be less likey to just spend it frivilously (aka “housewives”). Opps again.

#129 rob_ on 11.16.11 at 6:06 pm

I am currently renting a 3 bedroom half-duplex in Vancouver for under $2,000. It comes with a large south facing deck, a large backyard and limited views of the mountains. It is an old building but our half was renovated shortly before we moved in – new cabinets and appliances.

#130 Devil's Advocate on 11.16.11 at 6:08 pm

#117Form Man on 11.16.11 at 4:18 pm
#104 DA

”So one should disregard the stat from BCREA. They are wrong and you are right ? You took 550 words to say nothing and actually contradict yourself. This is what a university education has provided you ? I am astounded………..and amused…………” – #117Form Man on 11.16.11 at 4:18 pm

In keeping with my contention that the prevalent poster on this “pathetic blog” “consistently and persistently twists truths by knaves to make a trap for fools” I am saying EXACTLY that Form Man.

Again, let me repeat; None of that historical statistical data I am privy to suggests such a drop in the last 12 months. In fact, for the last three years, since 2008 when prices did drop about 14.3%, both prices and volumes have remained constant.

Now I don’t for a moment doubt that whichever poster it was who commented that the market did drop so likely took it out of context, one way or another, and that it probably was not BCREA from who they got that information for I have not seen such statistics and those I am privy to refute it blatantly.

History is pretty easy to measure Form Man. Prices in Kelowna certainly have not, on average, risen in the past three years but I assure you they have absolutely not dropped 14.3% this year over last or this October over last October.

My time here is done. It has proven a most fruitless effort to try broaden the minds of those who’s are so narrow they could peer through a keyhole with both eyes.

Again, good luck, you’re going to need it

#131 Form Man on 11.16.11 at 6:28 pm

#130 DA

You will find the statistic on the Vancouver Sun website business section. BCREA interactive. You can click on any region in BC. If you need any more help accessing BCREA info, feel free to ask for my assistance. This drop is for just the last 12 months. Obviously the total drop since 2008 is greater. My realtor sources tell me about 20% so far. Of course for condos it is closer to 50%. Sorry to hear you are leaving us. I have enjoyed the back and forth. You have proven to be a most entertaining poster ( especially considering you are a realtor )

#132 Form Man on 11.16.11 at 6:39 pm

#126 DA

Gosh, you are having reading comprehension issues again. Go back and carefully read my posts. I am not leaving the Kelowna market at all. We are too busy repossessing properties from Kelowna developers who were happy to pay us substantial downpayments for raw land ( at the peak). It is they who are turning tail and leaving my friend………there is the best clue I have given you yet. If you can’t figure out who I am now, then your career as a private investigator is surely dead.

#133 DM in C on 11.16.11 at 6:43 pm

#130 DA

“My time here is done. It has proven a most fruitless effort to try broaden the minds of those who’s are so narrow they could peer through a keyhole with both eyes.”

So you keep threatening, but you seem compelled to return again and again to convince the denizens of this ‘pathetic blog’ of both your moral and intellectual superiority.

At which you fail, every time you open your mouth.

Just go away.

#134 Bill Gable on 11.16.11 at 7:06 pm

Bank Run?
Argentina?
NOPE>

“Italians, Greeks pull out billions – (*Headline)

Italians and Greeks have pulled out billions of euros amid the debt crisis that has plagued Europe.

Since the beginning of the crisis, Der Spiegel reports in its latest issue, Greeks have taken some €50-billion from their accounts. That’s about 20 per cent of the country’s total deposits, the German publication says. When there was talk Greece could leave the monetary union, Greeks yanked €1.5-billion in a two-day period alone.

Der Spiegel also cites data compiled by the central banks of Italy and Germany indicating more than €80-billion was pulled out of Italy in September and August.

Where’s that money going? According to the report, Greeks are depositng billions in Swiss banks, and some travellers have been caught at the Athens airport trying to leave the country with amounts above the legal limit.

http://tinyurl.com/88o62wg

#135 terces on 11.16.11 at 7:13 pm

I don’t particularily like some things about living in a rental either, although looking out my rented window at the Three Sisters in Canmore in a house that has dropped around 20% in value since we have been here is not such a bad thing. We pay $2500 for a pretty nice shack and the landlord pays all taxes, upkeep and management, so he nets about $1800 = $21,600 for a place that was on the market for around $1.4 at one time before we got here, and now would fetch around $900k – if he could find a buyer.

For me, it is about risk management. Houses just across that little thin line called the 49th are less than 1/2 the price they are here. IF the contagion spreads further to these markets I am protected. If does not spread further, I am protected with my money in the bank.

I have no desire to pick up the lunch bucket again and go to work before the sun comes up, so I am looking after my RISK.

One day before too long we will be back into our own very nice home. Until then, we are going to keep enjoying this long strange trip.

#136 Canadian Watchdog on 11.16.11 at 7:23 pm

Interesting blog indeed. However like most housing blogs I visit, whether RE bull or bear, the same argument persists despite the fundamental basis that drives the housing market—that is, the willingness of an institution or investor to lend to those they feel are credit worthy. Is it demand you say? What does demand mean in a leveraged market? And most importantly, what would happen if a lender becomes convinced the borrower will fail to meet his/her obligation?

Exhibit A: http://i42.tinypic.com/23kqj41.png

#137 Smoking Man on 11.16.11 at 7:36 pm

#56 Darlene on 11.16.11 at 9:00 am
Rumor has it that runaway cow smokings and drinks wine :)

Just saw on the news bunch of kids at a school in the GTA had there balls taken away, they where chanting “We want our Balls Back”

Talk about a perfect metaphor……………..

#138 Van guy waiting on 11.16.11 at 7:37 pm

DA

Go use your economic degree and become an economist for CMHC. At least your voice will be heard nationally and not on this “pathetic blog”.

#139 Chuckles the Clown on 11.16.11 at 7:39 pm

#119 Disciple’s Replacement.

Yah baby! Thanks for the laugh. I shall be ever vigilant of the Garthster and his hypnotic mind control methods going forward. Come to think of it Garth has this svengali aura about him… We are on to you Garth and your hypnotic methods. Glad to hear Montezuma’s revenge has cleared up for Disciple. I suggest you collaborate further upon the return of the mighty Disci

#140 Dorothy on 11.16.11 at 7:46 pm

#131 – Form Man

The Okanagan is far too great of an area to generalize about the price of Real Estate, because Real Estate is a very LOCAL market, and price fluctuations vary according to locality.
The North Okanagan, South Okanagan, and Central Okanagan all have differing price fluctuations when compared to 2010. And even within each of those areas, price fluctuations will vary depending on whether the property is urban, or rural, and also depending on whether it is at the higher, middle or lower end of the scale, and whether it is single family residential or a condo.
To get accurate statistics, one must compare “apples to apples” and “oranges to oranges”. To do otherwise renders the statistics meaningless.
I live in a small town in the North Okanagan, in a single family residential that is in the mid price range. I have been tracking real estate values in my town for several years, and for my type of home in this locality the prices have dropped by about 4.5% in the last year.
While that’s a lot, it’s still a far cry from the 14% figure quoted in the Vancouver Sun.
Statistics, when not accurately applied, can be very misleading, and totally useless. People play this game of trotting out misleading statistics all the time when trying to make a point, or win an argument. And when it comes to the value of Real Estate there are those on both sides of the fence who are more than willing to use misleading statistics to bolster their argument. The bottom line is we shouldn’t always believe everything we read in newspapers.

#141 PlannerHammish on 11.16.11 at 7:48 pm

A great tool for finding a rental is padmapper.com
And used in conjunction with walkscore.com and mapnificent.net you can find a great place, at a great price, that is walkable and transit accessible. (Or not, if you want to be dependent on your car for everything).

Disclosure: I don’t own or have any interest in those websites.

#142 martin on 11.16.11 at 7:49 pm

i hope real estate doesnt go down so this blog will be around for a while more

#143 Devore on 11.16.11 at 7:55 pm

#92 JohnnyBravo

Devore, what the heck do you mean ‘Your equity can easily go to zero, and below, unlike with stocks.’?

Stocks can easily go to zero, wiping out equity.

Stocks can’t go below zero. If you’re underwater on your house, you have “negative equity”, you’ve gone below zero.

Houses can’t go to zero, because they are made of stuff and sit on land. Well, they might go to zero, if it would cost more to demolish them and reclaim the land, than the whole thing is worth. An extreme case admittedly. Some areas of Detroit are arguably there.

You own equity in your house. Hopefully. The house’s value can fall below your equity, where you owe more on it than it is worth. Pretty simple concept. Admittedly, some people do buy stocks on margin (leveraged) and engage in shorting, and can potentially find themselves in trouble, but the number of these people are probably on the same level as number of people buying their house with cash.

#144 Nostradamus Le Mad Vlad on 11.16.11 at 8:13 pm


“No, but I’m considering a shrub fund. Then it must be true !!! — Garth” — That goes with the dandruff falling from those puffy grey Kleenex in the skies 2day. It’s floody brozen.

#107 Makaya — Thanks for the link and good post. There are numerous factors happening. each affecting others to some respect, and the m$m does not even bother to report them.

#119 Disciple’s replacement poster for this coming week while he’s on vacation — “. . . a local just peed on his leg to lessen the swelling.” — Cheapest and easiest way to cover health insurance bills!
*
For #107 Makaya — Link in New US$ replacing the current one soon? Obumbler lets the crooks go free; Stox tank “How is that ‘globalism’ thing working out for you now?” wrh.com; Odebt Not including unfunded liabilities such as SS, Medicare, etc. “… not counting the $47 trillion (maybe more) borrowed and spent to cover the losses caused by the mortgage-backed securities fraud.” wrh.com; Rahmageddon “Rahm’s answer to Chicago crime, poverty, and massive foreclosures problems is ‘Austerity’ “; 3:27 clip Interest armageddon; 7:53 clip MEffed — “Let me break it down for you.”; Don’t buy the BS propaganda “I mean, if you have loaded up on oil futures, $200-a-barrel-plus oil looks cool. And the broader financial consequences are truly fascinating:” (Iran – Israel); Pension Bailout Bailouts are so 1913ish; Work Without Pay “Work without pay? Sounds like slavery to me! And all these big companies getting this free labor means they don’t have to hire paid labor! So this is going to increase the jobless problem!” wrh.com; The Mark Of The Slave “On January 1, 1863, President Abraham Lincoln signed the Emancipation Proclamation, to make all men free.

“On December 23rd, 1913, President Woodrow Wilson signed the Federal Reserve Act, to make all men slaves again.” wrh.com;
42:30 clip Meltdown, and the people responsible for it; Libya Very profitable for the UK govt., and it’s only getting better for the Brits.; Middle Class ares shrinking as income gap grows; France Borrowing costs soar and they can’t service their debts / deficits; Youth Jobless breaks one mln. in UK for first time; US$32 mln. for eight 30K weight bombs; Germany and UK Tensions raised, because Germany seems to be in relatively good shape while the UK is a disaster; Stealing Headline is refreshingly simple; Fannie – Freddie execs. score big time (see previous re: stealing); Gold 10% should suffice in a portfolio.
*
6:40 clip “Political language is designed to make lies sound truthful and murder respectable, and to give appearance of solidity to pure wind.” – George Orwell; Homeland Security co-ordinated the clampdown efforts on Occupy; Body Scanners Families exempt; MoveOn.OI’mInChargeHere The homeless bow down before King O; Police State makes its move; Af’stan – Iran Af’stan wants Iran; Joe Paterno knew something was up; Disturbingly Hopeless A further reason to understand why the cycle is changing.

#145 BPOE on 11.16.11 at 8:15 pm

So over 25 years 600 GRAND plus blown out the door with nothing to show. Where you going to live when you get old.
******************************************
.#129 rob_ on 11.16.11 at 6:06 pm
I am currently renting a 3 bedroom half-duplex in Vancouver for under $2,000. It comes with a large south facing deck, a large backyard and limited views of the mountains. It is an old building but our half was renovated shortly before we moved in – new cabinets and appliances.
.

#146 JRoss on 11.16.11 at 8:17 pm

DA,

“What prey tell…. ”

Freudian slip?

#147 KT604 on 11.16.11 at 8:18 pm

DA,

Here is the recent press release from BCREA:

http://www.bcrea.bc.ca/docs/news-2011/2011-10.pdf

On page two, under October 2011 Residential Average Price table, look up Okanagan Mainline Real Estate Board (OMREB). The board-wide average price for October 2011 is down 14.3 percent from October 2010. I appreciate that Kelowna is not the only place within OMREB’s jurisdiction, but the stats are there.

Unfortunately, OMREB’s own press release doesn’t refer to the average price, but it doesn’t look all that promising, either.

http://www.omreb.com/news.php?newsID=103

If I’ve got it wrong, please do let me know. I welcome your feedback.

KT

#148 BPOE on 11.16.11 at 8:21 pm

These numbers don’t add up for this low salary. Must of inheirited money
&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&
Okay, Garth, so $310K in the bank for a downpayment, and we have other retirement pensions and fixed assets worth about $300K. We’ve been married 10+ years, have a 5-yr old with maxed out RESP’s and we’ve also ensured we’ve maxed out each of our TFSAs. The problem is we gross $140K annually and rent a 1-bedroom apartment since we’ve been married, and my husband has been adamant for a decade that the “housing market’s going to soften”.

#149 Devil's Advocate on 11.16.11 at 8:33 pm

#132Form Man on 11.16.11 at 6:39 pm
#126 DA

Gosh, you are having reading comprehension issues again. Go back and carefully read my posts. I am not leaving the Kelowna market at all. We are too busy repossessing properties from Kelowna developers who were happy to pay us substantial downpayments for raw land ( at the peak). It is they who are turning tail and leaving my friend………there is the best clue I have given you yet. If you can’t figure out who I am now, then your career as a private investigator is surely dead.

I call B.S.. Unless I am grossly mistaken, which I could well be – all-be-it easy enough for someone to check the archives of these “pathetic blogs” to determine for sure, did you not say you built to suit for the retirements set some time back? That would be an entirely different animal that you now claim to be Form Man.

I bid you adieu as I leave you to your other fictitious online presence – that of a lady of the night. Make sure you shave well – the scraping noise of your whiskers against the mic. is a dead give-away.

#150 jess on 11.16.11 at 8:41 pm

History is pretty easy to measure it just a lagging indicator.

1997 Asian debt crisis.
http://en.wikipedia.org/wiki/1997_Asian_financial_crisis

“Round Trip Loans.”page 10

http://online.wsj.com/public/resources/documents/WSJ_LB_ExaminerReport.pdf
http://lawprofessors.typepad.com/whitecollarcrime_blog/files/bennett_sentencing_memo.pdf
http://en.wikipedia.org/wiki/Victor_Niederhoffer

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3gTuiHWluwc

#151 Devil's Advocate on 11.16.11 at 8:54 pm

#133DM in C on 11.16.11 at 6:43 pm
#130 DA

“My time here is done. It has proven a most fruitless effort to try broaden the minds of those whose are so narrow they could peer through a keyhole with both eyes.”

So you keep threatening, but you seem compelled to return again and again to convince the denizens of this ‘pathetic blog’ of both your moral and intellectual superiority.

At which you fail, every time you open your mouth.

Just go away.

My moral and intellectual superiority I grow more confident of with each passing day. Unfortunately it is a bitter sweet awakening as it leaves fewer and fewer I can look up to and trust. The saddest thing of it is what it says about everyone else for I am only too well aware that using my intellect as a benchmark is not setting the bar so high that there shouldn’t be far more above it than there are.

“I like a teacher who gives you something to take home to think about besides homework.” — Edith Ann, [Lily Tomlin]

#152 JohnnyBravo on 11.16.11 at 9:04 pm

#142 Devore on 11.16.11 at 7:55 pm

You’re right. I didn’t get the full gist of your previous comment.

#153 Stupesing in Cabbagetown on 11.16.11 at 9:07 pm

As if the real estate bubble isn’t bad enough, the heavily indebted compounding the stupidity: http://www.advisor.ca/news/industry-news/does-your-client-understand-their-heloc-65136

#154 Nonno Nicola on 11.16.11 at 9:07 pm

#112 Big Rider

Grazie Bigga Rider.

#155 Bobby on 11.16.11 at 9:10 pm

Poor old Devil’s Advocate. Continues to tell everyone they are wrong, yet gets frustrated when one doesn’t agree with his opinion.
The world is full of experts that will tell you what has happened but can only guess what will prospectively happen. I have never met a realtor that says prices will go down, yet I have seen some significant crashes. Of course, DA will say otherwise, because he believes he is an expert. An expert is someone who guesses right. There are a plethora of experts out there who said Nortel was a buy at $124 and RIM at $149.
And, you can make statistics read anything you want them to read.
You just have to look around at what you see as you drive through the various neighborhoods. There are lots of For Sale signs, with many advocating new price. Here in Victoria, I have been to a number of open houses with many of the homes sitting empty and in need of a lot of updating.
Looking at the MLs there are many other homes that don’t have a For Sale posted on the lawn.
Countries have been living beyond their means for too long and it is starting to catch up. It is spreading through Europe and will in time reach Canada.
It is going to get ugly.

#156 Teacher Tim on 11.16.11 at 9:13 pm

151 DA

“I like a teacher who gives you something to take home to think about besides homework.” — Edith Ann, [Lily Tomlin]

Good quote DA. I am in the teaching profession and I have always tried to give my students more than just homework to think about.

#157 Devil's Advocate on 11.16.11 at 9:20 pm

#147KT604 on 11.16.11 at 8:18 pm

Does nobody know anything of statistics! One month this year over one month a year ago and “AVERAGES” at that!?!?! Are you really that ignorant?

I have looked at all 280 properties sold in October of this year and I have looked at all 266 properties sold in October of 2010. Believe me, while the statistical “average” may indeed be that the “average” of October this year is 14.3% less than the statistical “average” was for that month in 2010 it does not mean that prices are down 14.3% in the general market.

Do I really need to explain this to you?

I’m outta here. These pathetic fools are beyond saving.

“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.” -Albert Einstein

#158 The thing in the basement on 11.16.11 at 9:30 pm

140 Dorothy – a well prepared post. I don’t actually get “Form man”. If he is what he claims to be, why does he care one way or the other about DA?

Now as far as DA goes, I actually dont mind him too much. It’s the more general membership of his claimed “profession” that makes me shake my head. I do deal with realtors now and then – in fact just today. They never fail to amaze me with their ignorance and
arrogance. She was just clueless, and thought I was
charging “too much” for the requested info.

#159 Harlee on 11.16.11 at 9:45 pm

119 -D’s replacement
Ah, you hit your stride with this post. Some information that is actually quite useful. Thank you,thank you !

#160 KT604 on 11.16.11 at 10:04 pm

#157 DA

DA,

Dude, I was nothing but civil when I asked the question. There’s no need to insult me. You didn’t agree with the previous poster that brought up the BCREA stats, so I’m showing them to you. If those stats are so useless to you, you should email Cameron Muir, Chief Economist at BCREA, and tell him so. After all, your dues are paying his salary. I used to work for BCREA and had drinks with Cameron a few times.

In the absence of any other reputable data (eg. Zillow), what source would you suggest I use? A REALTOR(r)? Okay. I would prefer not to go to a REALTOR(r). Can you suggest another alternative?

I wish you all the best in the Kelowna market.

Cheers,
Kyle

#161 Devil's Advocate on 11.16.11 at 10:43 pm

#160KT604 on 11.16.11 at 10:04 pm

You are right, you were nothing but civil. My apologies to you for catching you in the crossfire.

What gets me is when the industry stats say something other than the general posters on this pathetic blog want to hear it is considered fabricated SPIN yet when the statistics work for their agenda they are unfettered truths.

In October of 2010 the average SFD price was $639,893. I am quite sure most everyone would agree that was simply not the case. If it was you will be startled to hear that in the subsequent month (November of 2010) it fell to $433,839. Now that alone is a 32.20% drop in that one month alone. And people are going to tell me that an October over October comparison means anything at all.

The fact is there 15 of the 162 homes sold in that month of October 2010 were sold for over $1,000,000 which is a particularly high incidence of such sales in a month for this area. Now don’t you think that might have something to do with skewing the “average” sale price of that month in 2010 that the month in 2011 might have just a little difficulty competing with given that only 7 such sales occurred in it?

#162 The thing in the basement on 11.16.11 at 11:15 pm

26 Herb – yes I caught that this AM. Nothing really new there. I still find the CAW economist to make some very strange comments. I think he is stuck in a 40 year old economic model. The other panelists recognize the need for useful skills (including trades and technical),
flexibility and mobility.

#163 Snowboid on 11.16.11 at 11:38 pm

#126 Devil’s Advocate on 11.16.11 at 5:50 pm…

May I remind you of your statement of liquidating your assets with the intent of leaving Kelowna a couple of years ago. In fact you said you were looking forward to leaving and planning the details three years ago.

You also said Kelowna wasn’t worth the prices – blow Kelowna off the map and the Valley would be much better you surmise!

“IT SUCKS and I can not wait to get outta here” definitely sounds like you are the one that wanted to leave Kelowna – also calling it a “soon to be cespool (sic)”

Sounds like the one with the tail between your legs – at least that would fit with your relation with Lucifer.

BTW, your threat to leave the blog will be about the 6000th time you have promised this – hardly a surprise to see you back when you have shoveled your driveway!

You are indeed the primo BS creator on this blog – okay maybe tied with BPOE.

#164 KT604 on 11.17.11 at 12:29 am

#161 DA

DA,

I don’t disagree with your argument, but it also applies when the media reports massive YoY gains in housing prices. Like you said, one can’t selectively pick and choose when to apply that logic.

So what data sources do you suggest we use to ascertain the health of a market? If I can’t take the information that your own local boards (or the BCREAs of the world) are providing, how do you expect the average joe to know where to turn?

KT

#165 Not Wondering Anymore on 11.17.11 at 3:05 am

#49 Dorothy

They may be able to afford real estate, but can they afford to commit and lose everything on it, both economically and socially? You sentimentalize and gloss over the realities of home ownership. Good family memories can be made in any HOME, not just in purchased real estate.

#166 Montrealer on 11.17.11 at 10:52 am

1,800$ for a one-bedroom apartment… 3,500$ for renting a house. Wow. I have the impression that you are living in a different country! For 1,200$ in Montreal, you would get a nice 3 bedrooms aparment centrally located. My dad rents a huge nice home in the suburb for less than 1,000$ a month…

Yes, but this is the Centre of the Universe. And Van is Galactica. — Garth

#167 detalumis on 11.17.11 at 11:57 am

Actually this couple doesn’t have the problem of when to buy a house, they are very similar to my college girlfriend, she still wears the same pair of boots from 30 years ago – just gets them resoled every few years, or my other friend who retired with 1 million in savings along with a decent pension and when he goes on vacation once a year will only stay in the cheapest bed and breakfasts and rent the smallest car possible even though he is over 6 foot tall. They have the problem of so much save, save, saving that they forget to do any actual living.

#168 VicBC on 11.17.11 at 12:05 pm

#60 Gerardo

Well that’s great you can pick the winners of 2011 , tell me which etf’s to buy for 2012?.

#169 jess on 11.17.11 at 3:47 pm

STATEMENT FROM A.G. SCHNEIDERMAN REGARDING THE FEDS’ PROPOSED FRACKING REGULATIONS
[En Español]

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement in response to revised draft hydrofracking regulations posted today by the Delaware River Basin Commission (DRBC), with the approval of its supporting federal agencies.

“By issuing these modified draft regulations, the federal government continues to ignore New Yorkers’ concerns about the impact fracking may have on our environment, health and homes. Though modified, these regulations still lack the benefit of a full environmental impact study, which is required by law and dictated by common sense. Without it, the federal government does not have a complete understanding of the health and safety risks fracking poses, even as it stands to open up the Delaware River Basin to thousands of new gas wells. These regulations are both inadequate and illegal, and I will continue to use the full authority of my office to require that the federal government meet its clear legal obligation to fully study the environmental impacts of fracking in the Basin.”

read more
Background
http://www.ag.ny.gov/media_center/2011/nov/nov8a_11.html

#170 jess on 11.17.11 at 5:39 pm

india occupy

Indian mining magnates arrested for alleged corruption offencesPowerful brothers-in-law taken in as part of a move to combat corruption in wake of Anna Hazare’s protests last month

http://articles.timesofindia.indiatimes.com/2011-09-05/india/30115552_1_illegal-mining-anantapur-mining-corporation-reddy-brothers
Janardhana Reddy sent to jail; Rs 3cr cash, 30 kg gold seized
B Krishna Prasad & Anil Kumar M, TNN Sep 5, 2011, 05.53pm IST

=

http://www.tehelka.com/story_main44.asp?filename=Ne030410coverstory.asp
Dated April 03, 2010

Six ways in which black money is created
http://economictimes.indiatimes.com/news/economy/finance/six-ways-in-which-black-money-is-created/articleshow/10763250.cms

=
Zambia

‘Our analysis of the mining sectors tax payments ,its contribution to employment and supporting backward and forward linkages to local supply chains reveals that these are not commensurate to the levels of incentives and concessions that the government currently gives to the industry. The cost structure of most of the mining entities is weighted to promote shifting of profits outside the country through such schemes as transfer pricing, use of derivatives and thin capitalisation’ explained Mr Mwambwa.

#171 armourb on 11.17.11 at 5:41 pm

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