Sticky

Regular readers of this pathetic blog, who are obviously lacking in their own social skills and should probably get a dog, will surely have noticed markets are coming unglued. This week, for example, we learned prices and down a bit in Vancouver and off drastically in Victoria – two of the most delusional places in the nation. Ditto in spots like Kelowna, where sales have stalled out, and even in GTA’s heavily-populated 905 belt, where million-dollar houses now languish for a year without a nibble.

Has the correction begun?

But at the same time here’s the latest batch of numbers from Toronto’s housing cartel – prices ahead of this week last year by a whopping 10%. So the average house in 416 (which includes a billion newly-built and recently-flogged condos) now costs $526,540, with the average SFH back at $754,805. These numbers are, respectively, 5.5 and 8 times the average household income of just over $96,000. As we all know, the US housing market collapsed when the needle touched 4.6.

Says the Toronto Real Estate Board: “Despite global economic uncertainty, buyers have remained confident in the affordable housing market in the GTA.”

But how is this ‘affordable’ when, by global standards and those of the US, people are forking over more of their current and future income than ever before for a house? Easy answer. Because of debt. It’s cheap, and plentiful, and while a growing majority of people across the country are obviously having serious second thoughts about existing just to make mortgage and property tax payments, areas of local insanity remain.

This begets the question: why are prices not coming off, and what happens next?

First, what’s taking place in BC and elsewhere will be the norm everywhere, including the godless GTA. That’s a given. But as I said yesterday, herd momentum takes a long time to wear off. House prices can continue to rise even as sales weaken and the economy erodes, if enough idiots remain, egged on by realtors and the lapdog media. In fact, as the chart below shows (thanks to poster Canadian Watchdog), average prices have been dragged higher by sales of single-family detached houses which, at three-quarters of a million, relatively few can afford.

Second, if sales levels fall thanks to winter and Europeans diddling themselves, prices will stay sticky. No quick declines to match a drop in deals. The reasons are purely human. Let me give you an example. Thirteen months ago I saw a house in a lakeside community that caught my fancy (like you, I am a real estatophile). A year later, it was still for sale, asking $333,000. I offered $300,000, which was fair, 90% of list, cash, no conditions. The vendor signed it back at $325,000.

When I asked the agents involved why the seller would offer such a small discount after more than a year on the market, and with winter setting in, I learned the answer: that’s what she’d paid for the property six years ago, and she’s a doctor. All I needed to know. A professional person in a position of social authority who couldn’t stomach the idea of selling at a loss, thus admitting to a mistake. Pride. So I walked. And it sits, empty.

Buyers since 2008, especially, have a wholly unrealistic view of the market. Many of them bought too quickly, often in a bidding war, and expect the next guys to do the same. They believe the momentum is endless, prices will always advance, and any flatlining is temporary. So if things soften, most respond not by adjusting their asking prices lower, but trashing their listings in a huff. Others who get an offer thousands under the list price (even if it’s 95% of asking), can fly into a rage, feeling insulted and humiliated that a vulture is pecking their orbs out, even if they stand to make a fat cap gain. This is what drives agents crazy, and is about to constipate the market.

Real estate, after all, is like no other asset. Nobody has a stroke when they sell a mutual fund for ninety-five cents on the dollar in a declining market. They’re just happy to get out. But because of the unhealthy, perverse, quasi-sexual relationship between owner and property (I met a woman last week who calls her condo ‘she’. Yuck), most sellers think they deserve alimony.

So in those places where sales are falling and prices starting to soften, the capitulation has begun. Values will continue to shrink this winter. But in the hot, creamy bits of 416 and Van, no such luck. Sellers who can’t sell (for their asking) tend not to wise up until 90 days in. Then they reduce a little for another 30 or 60, before chopping 10 or 15%.

So, if you’re horny to buy in Toronto, keep your pants on until April. If you’re looking to score in, say, Kelowna, please unbuckle.

 

194 comments ↓

#1 Slopetester on 11.16.11 at 10:07 pm

Who is Your Pick for The Republican Presidential Nomination? 1. Ron Paul – 56.01%; 2. Mitt Romney – 17.18%; 3-9. The rest of the war mongering, Fed sympathizing, puppets.

http://www.usnews.com/polls/who-is-your-pick-for-the-gop-2012-nomination/results.html

Who wants to bet a Silver maples that RP wins Iowa?

Thanks for reminding us how useless Internet polling is. — Garth

#2 Nick on 11.16.11 at 10:07 pm

1st

#3 Foggy on 11.16.11 at 10:09 pm

Here’s an example of seller stubborness. A neighbour of mine in cottage country has his place for sale. He listed in March/2008 for $315K. It’s an OK Viceroy style place, decent lot and 4 hours north of Toronto. It was also mortgaged to the hilt. Today, it remains unsold at precisely $315K. Not a penny less after 44 monthes on the market. There’s stubborn….and then there’s stupid.

#4 Stinky the Fish on 11.16.11 at 10:10 pm

Garth – great post. You described the situation in Canada perfectly

“But how is this ‘affordable’ when, by global standards and those of the US, people are forking over more of their current and future income than ever before for a house? Easy answer. Because of debt.”

100% absolutely correct.

We are at levels of debt past our neighbours in the south when their situation collapsed. No, prices do not continue to infinity. When the downwards momentum starts, there’s no turning back. (2008 didn’t reach that level, and emergency interest rates were in place, but this time it’s going to hurt)

Just for a preview of what’s going to happen to employment in Canada –
“Research: How Household Debt Contributes to Unemployment ”
http://www.calculatedriskblog.com/2011/11/research-how-household-debt-contributes.html

Cheers to a long period of deleveraging and unemployment!

Vultures – Get your claws ready to swoop in and snatch one of those nifty houses. But make sure you watch the reaction of the sellers house when the price is much less than expected. Talk them down a bit, make sure you get their BBQ and other personal items when you put it the offer. Take a picture of the sellers’ sad faces, enlarge it, frame it, and then put it up on the wall. Tell a story when your friends come over about how you robbed them blind. Make some chunky noodle soup (maybe Clam Chowder or Seafood Style) for them. Pour a couple of pints of Guiness and then have a party… because you, my friend, are the ultimate winner.

Alright, I sound gay. I’ll stop.

#5 Marc L on 11.16.11 at 10:10 pm

12th

#6 Jason on 11.16.11 at 10:21 pm

More than happy to keep my pants on, but just curious, what do you see happening in Toronto in April?

#7 Killowna on 11.16.11 at 10:24 pm

Kelowna is not done yet. Unbuckle but keep your shorts on. Tease for 6 months minimum. Real-turds are hungry and they keep telling you it is time to buy. NOT. when you look at the arizona market. Kelowna is to be renamed Killed-Owna. No newly-webs and many nearly-deads.
SOPA is a project that will face a slow death and maybe a good place to buy in 2 years when completed. I just moved from there and rented a pad for 2 years as I watched the market tank.

#8 Boombust on 11.16.11 at 10:25 pm

Here in the Tri-Cities are near Vancouver, a friend has emphatically stated, “I WILL NOT give it away!”.

Slow sales, y’now…

#9 Boombust on 11.16.11 at 10:26 pm

“Who is Your Pick for The Republican Presidential Nomination?”

Ask me if I care.

#10 Devore on 11.16.11 at 10:30 pm

In fact, as the chart below shows (thanks to poster Canadian Watchdog), average prices have been dragged higher by sales of single-family detached houses which, at three-quarters of a million, relatively few can afford.

Not only does the graph (and similar graphs which break down the market into more granular segments) show that the higher end is dragging average prices up, even though most of the market is merely inching up, or even declining, but it also shows that when a correction does happen, the high end will be leading the charge.

#11 TurnerNation on 11.16.11 at 10:31 pm

This probably explains the Alberta situation, too:

http://finance.yahoo.com/news/the–200-000-a-year-mine-worker-.html

James Dinnison, a 25-year-old high school dropout from Western Australia, makes $200,000 a year running drills in underground mines to extract gold and other minerals. Despite having earned roughly US$1 million since he started, he has no savings and doesn’t apologize. ‘The mines are so dull, that when you get back here, everything is stimulation and excitement.’

The heavily tattooed Mr. Dinnison, who started in the mines seven years ago earning $100,000, owns a sky-blue 2009 Chevy Ute, which cost $55,000 before a $16,000 engine enhancement, and a $44,000 custom motorcycle. The price tag on his chihuahua, Dexter, which yaps at his feet: $1,200.

#12 Canadian Waatchdog on 11.16.11 at 10:36 pm

Nice chart! However I do have a confession to make about TREB stats:

Since TREB’s new sales report format as of July, I’ve noticed they began reporting seasonally adjusted sales figures compared to 2010 unadjusted figures (lower). Now if you’re economist, statsman or whatever, you know this is outright wrong and might agree that reporting data this way is ‘manipulative.’

In the chart below (source figures shown in red), you can see how prior to July they reported YoY percent changes using 2010-2011 seasonally adjusted data, then after July they began reporting 2010 unadjusted data compared to 2011 seasonally adjusted data. Overall, this technique is used to make the percent gains look higher then they appear by the moving average raising current sales figures, while prior annual figures is kept unadjusted, in this case lower.

The real YoY change in October sales was 14.4%, but TREB reported it as 17.5%; same with September reported as 25% while the real change was 21.4%. What’s the motive? Bigger numbers keeps the headlines rolling or what I call ‘Banana Stats For Monkeys.’

http://i44.tinypic.com/2hh0ls1.png

I have debunked a few agencies reporting data like this and sadly, people are making investment decisions based on those numbers.

#13 The Original Dave on 11.16.11 at 10:39 pm

#93 Nonno Nicola on 11.16.11 at 1:06 pm

—————-

loved your post! Unfortunately most people won’t understand the Italian oldskool mentality. Come back Nonnooo!!!!

#14 I'm stupid on 11.16.11 at 10:41 pm

#3 foggy

I’m stupid.

Like in the US prices became sticky until the ones who couldn’t wait hit the debt wall. Then it was game over, now 4 years later they still have a problem with no end in sight. The same principles that pumped the market are the ones that keep it suppressed. When one home sells for less irregardless if it is a foreclosure a the remaining homes have a new low. It won’t be the doctors in Garth’s example that will drive the prices down. All the 5-30s with helocs spending 50-60% of income on housing will. You just have to wait for the debt wall.

#15 The Original Dave on 11.16.11 at 10:46 pm

it’s a bloodbath in Kelowna. I’ve met some smug people from there. All real estate experts. There’s no denying what’s happening there.

The people of Kelowna will be bullish on religion and church in the next few years.

#16 April on 11.16.11 at 10:48 pm

Garth when you refer to Van RE prices are you referring specifically to Van city, or are you including the suburbs like Burnaby Coquitlam/ New West/?

Van City. The burbs are cooked. — Garth

#17 T.O. Bubble Boy on 11.16.11 at 10:49 pm

April??? What year?

Sentiment needs to turn, HGTV addicts need to turn to ‘Til Debt Do Us Part, and ultimately some lessons need to be learned by the insane people out there paying $1M for crap like this:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11162940&PidKey=-553616741

#18 JohnnyBravo on 11.16.11 at 10:56 pm

While GR readers already know this, most news reports (take ’em for what they’re worth) on the housing market in T.O. that I have heard lately have explicitly pointed to the condo market as the key segment driving sales. Also, they admit that a large % of buyers are speculators.

I would think that a bias for condos among would-be home owners and speculators is a sign we are at or near a top. Let’s be honest, condos are houses’ ugly, little sisters–i.e. the second choice you settle for because Garth took all the Amazons.

Furthermore, the fact that they have to built ’em cheap to make them profitable, shows that housing is becoming increasingly UNaffordable.

New condos may be the sub-prime of real estate. When they start to pre-fab them out of corrugated, run.

#19 Mr. Lee on 11.16.11 at 11:05 pm

Your first lose is your best lose. A lesson that will have to be re-learned by far too many.

#20 Devil's Advocate on 11.16.11 at 11:18 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.

But let’s move on the the question of these stats shall we…

What gets me is when the industry statistics say something other than the general posters on this “pathetic blog” want to hear it is considered fabricated SPIN yet when the statistics from those same “questionable” sources work for the agenda of these “pathetic blog” dogs they are considered unfettered truths. I have buddies with ex-wives whose minds work that way. It cost them almost as much as these fools are costing our economy. Thing they don’t realize is it’s his and her money, theirs and yours. There is a reason your boss laid you off people.

The real estate markets are just fine as I keep repeating. This is not a departure from normal times this is a return to them. Volumes and prices have been stable for three years now. In terms of recessions three years is a long time.

On the matter of this 14.3% decline in Kelowna real estate prices; It simply is NOT TRUE:

Fact is in October of 2010 the “average” SFD price was $639,893. I am quite sure most everyone would agree that mnumber is simply not demonstrative of the real market. The real market is better exemplified by the “median” which was then in that same month of October of 2010 $441,000 and subsequently in October of 2011 $423,400. That represents a 3.99% drop not 14.3%.

If you still believe the “average” argument then you will be most startled to hear that in the subsequent month (November of 2010) it the “average” price fell to $433,839. Now that alone is a 32.20% drop in the “average” – in one month alone! And people are going to tell me that an October over October comparisons of “averages” means anything at all?

The fact is of the 162 homes sold in that month of October 2010 15 were sold for over $1,000,000 – which is a particularly high incidence of such sales in any month for this particular neck of the woods. Now don’t you think that might have something to do with skewing the “average” sale price of that specific month in 2010 such that the same month in 2011 might have just a little difficulty competing given it had only 7 such sales of $1mil plus occur in it? And none like the $10,000,000 sale that occurred in October of 2010.

You know what they say about statistics don’t you?

Statistics are like a bikini, they show you what is interesting but not what is most important.

#21 Mark on 11.16.11 at 11:25 pm

Wow Devils Advocate, you know basic math. Median prices are hard to find that’s why we use averages.

#22 Jan Etter on 11.16.11 at 11:32 pm

“#3 Foggy on 11.16.11 at 10:09 pm
Not a penny less after 44 monthes on the market. There’s stubborn….and then there’s stupid. ”

***

Maybe it’s not stubbornness or stupidity, but the psychological resistance to sell at a loss (which may or may not be related to pride as Garth posits). It is that psychology that I attribute to the seller of a condo I bought from. The seller bought at the height of the last peak in Toronto, preconstruction at $306/sf in 1990 dollars, closed in 1991. Those that were around then remember that the condo market reached the tipping point right around that time:

http://realosophy.typepad.com/.a/6a00d83420cedf53ef0120a7acefcd970b-pi

They hung on for 7 years through year after year of declining prices until they sold to me in 1998 – just as the market started showing the first signs of recovery – at $185/sf in 1998 dollars, taking a loss in nominal dollars of 40% (bad enough, never mind in real dollars).

I’m speculating that somewhere in the midst of enduring 7 years of declining prices they finally accepted the fact that they would never break even, and sold at the first sign of a recovery, on the fear that the recovery would be short-lived.

#23 bah on 11.16.11 at 11:35 pm

Always enjoy this blog. Can you suggest one that tells it like it is about stock markets and economy?

#24 OttawaMike on 11.16.11 at 11:43 pm

#21 Mark and #12 Canadian Waatchdog on 11.16.11 at 10:36 pm
Math is hard. That is why they came up with the Realtor profession, to employ all of these math failures.

#25 Not 1st on 11.16.11 at 11:47 pm

Garth, you give professionals way too much credit. Most doctors and lawyers don’t know anything about the basics of life and finance. They can do heart surgery but don’t know how to turn on the washing machine.

But people who refuse to sell at a loss will keep this market buoyant longer than we think I suspect. Stuborness can be extended a long way, just look at the EU and USA. Today the US crossed its 15 trillion dollar debt limit just 4 months after their downgrade. Did they learn? Nope, more of the same. Europe will get their lesson soon.

#26 Unistar38 on 11.16.11 at 11:49 pm

No capitulation in GTA, yet. I visited many presale sites and many open houses in north Toronto for the past several months. Basically no traffic. Completely differently from one year ago. But the builders and sellers are hoping against hoping that somehow buyers will show up. One town house, bought under 300 five years ago, is asking for 430!. But it has been sitting there for five months now.

(un)fortunately, the prick for the bubble has been found! It’s the damming CBC report claiming that all these glass-walled condos in Toronto will have half lives. Because of this report, all the condo flippers now have been trapped. They can not sell for a qick profit. For now they are not willng to sell for a 50% hair cut. So in a nutshell, all the hot money has been trapped!!!

So for people who enjoy watching bubble bursting and fireworks, have you popcorn ready! The show is coming to a neighbour near you!

#27 Snowboid on 11.16.11 at 11:51 pm

DA, I just won the bet – after announcing your departure from the blog, you are back already after only three hours – that is a record.

You are most tiring, and not even a pleasant distraction like Disciple.

#28 mark on 11.16.11 at 11:52 pm

let’s stop bashing the realtors – there are some bad ones but not all of them are ‘real-tards’

anyhow, no capitulation will happen until people can’t pay their mortgages. they will hold and hold and will not drop their price and ‘give it away’. however, if interest rates rise or people start losing their jobs then all bets are off and then the capitulation will happen very quickly.

so the question is, will they raise interest rates or will canadians start losing their jobs? both very unlikely …

#29 Ben on 11.16.11 at 11:52 pm

#3 Foggy on 11.16.11 at 10:09 pm

I see the same condo in Edmonhole with last years snow in the picture. Doesn’t even up date the pic. lol

#30 Canadian Waatchdog on 11.16.11 at 11:53 pm

#20 Devil’s Advocate

I agree about averages being skewed and not representing the real market, but I ask you: Who will lend more debt to a nation whose household debt-to-disposable income is approaching 150%? How do you see these prices sustaining over the years?

#31 Devil's Advocate on 11.16.11 at 11:54 pm

#7Killowna on 11.16.11 at 10:24 pm
Kelowna is not done yet. Unbuckle but keep your shorts on. Tease for 6 months minimum. Real-turds are hungry and they keep telling you it is time to buy. NOT. when you look at the arizona market. Kelowna is to be renamed Killed-Owna. No newly-webs and many nearly-deads.
SOPA is a project that will face a slow death and maybe a good place to buy in 2 years when completed. I just moved from there and rented a pad for 2 years as I watched the market tank.

Rumour on the street is SOPA Square in Kelowna is headed toward the same fate The Conservatory endured over the last ten years. But not so much because of market conditions. Go down to that site and listen to the dewatering pumps at work. Ultimately though if they are just rumours or they manage the challenges the very funky SOPA (South Pandosy) area of Kelowna is a safe bet as it continues to enjoy a very strong demand and command some of the highest prices in the city. As far as a speculative gamble goes you could do worse.

#32 Lotusman on 11.16.11 at 11:59 pm

The market in Kelowna is in serious trouble. There is a full page ad in the first section of the Vancouver Sun today advertising a fire sale of this development:
http://www.tuscanyvillas.ca/

#33 Devil's Advocate on 11.17.11 at 12:00 am

#21Mark on 11.16.11 at 11:25 pm
Wow Devils Advocate, you know basic math. Median prices are hard to find that’s why we use averages.

Wow Mark… I am speechless in the face of such a logical defence. Think Mark, think.

#34 Thetruth on 11.17.11 at 12:10 am

The opinions on this blog are becoming a joke!

Rents are rising in Metro Vancouver!!! Why? Demand outpacing supply!

$4000 to enter Canada. Believe it or Not.

http://news.nationalpost.com/2011/11/16/illegal-alien-smuggling-business-thriving-in-canada/

#35 JRoss on 11.17.11 at 12:10 am

DA,

How often did you provide that explanation to clients when average prices were going up?

#36 Double Trouble on 11.17.11 at 12:11 am

Great post Garth. Here in my suburb of Montreal, we’re seeing house prices drop a little. However, the market is still kept inflated due to stubborn home owners expecting to sell at bubble prices. I suspect that the housing bubble has already popped but we won’t see realistic house prices until at least two years or more. This is how long it will take prideful sellers to admit they’re greedy and wrong.

#37 nonplused on 11.17.11 at 12:23 am

Nice post tonight, Garth, but time for a real rant. Here goes:

I don’t get this thing in Italy. Can the Prime Minister really appoint a cabinet made up entirely of unelected people? Is this a coup? Can we expect more in other countries? And where is the revolution?

And what’s going on with MF Global? I hear they have seized hundreds of millions of dollars on customers account, and we’re talking thousands and thousands of accounts. Where is the SEC? A trading account at a brokerage is like a bank account at a bank, the customer accounts are supposed to be segregated and insured. CME is saying they won’t backstop the losses, despite saying for years that customer accounts were insured. And where is the SEC? Haven’t they put a porn filter on the SEC network yet?

And if counterparties can seize customer money when a brokerage fails and there is no actual insurance, what are we all doing with millions of dollars in TD Waterhouse? Can they seize your non-cash holdings too? I know it’s always different in Canada, but this is worrisome.

If we all have to clear out our bank and brokerage accounts to avoid seizure, maybe real estate will rocket up. Where else can you put that kind of money? Except in the US of course, where the banks often foreclose on people that don’t even have a mortgage because the bank either didn’t get their money because they forgot who owed them what, forgot they got their money, or just plain foreclosed on the wrong house. Yes, people in the US have come home to find they have been trashed out because the bank got the wrong address. And the banks refuse to pay compensation! In a few cases they tried to continue the foreclosure. A bank is a bureaucracy, so any crazy thing can happen, but please!

It looks like there is a revolution going on, but it is not OWS or the 99%. It’s not even the 1%. It looks like the 0.005% is making a run to seize not only the government but all the money and property too. I wonder if Soros is behind it, but I doubt it. He has a large amount of gold though, so he must see it coming. But they will come get that too, eventually.

Sooner or later we are going to have to fight back, somehow. Putting a couple of these crooks in jail would be a good place to start, and not just people with Maddoff’s client list. Stealing from the middle class and the poor is just as much of a crime as stealing from the rich, whatever your ideology tell you. Defrauding someone of another religion, race, or social status is not the same thing as defrauding a donkey or a dog. It’s the same thing as fraud. And that goes for all the other laws too.

See? That’s a rant.

#38 Bobby on 11.17.11 at 12:25 am

Average prices are a useless measure of house prices as they can be easily skewed by a few purchases.
Ideally, median prices are a better indicator of whom is buying what. Here in Victoria the median is tending lower as most activity is predominately in the lower end.
Again, you can make statistics read anything you want.

#39 Makaya on 11.17.11 at 12:28 am

If you haven’t seen it yet, I recommend you to watch this excellent interview of Karl Bass, the one who made billions betting on the RE collapse in the US in 2006, the banks in 2008 and Greece in 2011. What he sees coming is not pretty.

Be safe with your money…

http://www.youtube.com/watch?v=K-F_QF1XTXI&feature=youtu.be

#40 Waterloo Resident on 11.17.11 at 12:34 am

Garth, let me explain something to you that you might not fully understand: PEOPLE ARE STUBBORN.

Most of the people I know would rather let the banks FORECLOSE on their home then sell the house for less than they owe on the mortgage (plus the selling / buying fees). So if they bought the house for $500,000 and buying costs were $20,000 and then the selling costs will also be around $20,000 then they won’t accept anything less than a $540,000 offer, they would rather have the banks foreclose on the house and then they would go to the nearest trustee in bankruptcy and declare personal bankruptcy to get out of whatever the banks say they still own on that bad debt.

That is just how Canadians are.

#41 EJ on 11.17.11 at 12:36 am

Once again, you only have to look South to see what happens to the hold-outs in a declining market. And once again, people will chant “it’s different here” and chase the prices all the way to the bottom.

“One of the saddest lessons in history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power of you, you almost never get it back. So the old bamboozles tend to persist as the new ones rise.”

-Carl Sagan, The Demon Haunted World

#42 Occupy Everything on 11.17.11 at 12:36 am

Read a funny today: “Europe has a German Pope and an Italian central banker. Of course the place is a mess.”

#43 KT604 on 11.17.11 at 12:37 am

#20 DA

Thanks, DA. Regardless of my views of market conditions, the most frustrating element of this entire debate (in my view, anyway) is the complete lack of solid, publicly-available market data. Believe it or not, I am actually capable of following particular listing myself and making my own conclusions. If this information is available in the US on several sites (days on market, sales history, etc.), then I fail to see any reason it can’t be available here.

What are your thoughts on this? Do you think you, as a REALTOR(r), are justified in retaining ownership of the data itself?

KT

#44 RM in Oakville on 11.17.11 at 12:43 am

I love how the bloggers who often trumpet “first” are usually not. Get a life people.

Btw great post Garth as usual.

#45 Nemesis on 11.17.11 at 12:51 am

“The people of Kelowna will be bullish on religion and church in the next few years.” – OriginalDave

You’d be surprised how many ‘Nagans have already experienced their realty ‘Come to Jesus’ moment, OD… Unfortunately, their ‘prayers’ notwithstanding, it won’t finish like Lazarus of Bethany.

#46 Nostradamus Le Mad Vlad on 11.17.11 at 12:55 am


“But because of the unhealthy, perverse, quasi-sexual relationship between owner and property, most sellers think they deserve alimony. This is what drives agents crazy, and is about to constipate the market.”

You have discovered, at long last, how to have your cake and eat it, too!

But isn’t it somewhat eclectically strange for an owner to have sexual relations with the meatloaf? Freud, Jung, Dr. Oprah, Dr. Oz or Dr. Phil may be required for deep, underwater hypnotic therapy!

As for the last part, a stool softener is recommended!

“. . . sales levels fall thanks to winter and Europeans diddling themselves, . . .” — See link re: Spain and Italy possibly defaulting in a few days. France, Belgium and the UK? Someone is profiting from all this spongebarfbobspewpants. Order Out Of Chaos.

“This begets the question: why are prices not coming off, and what happens next? Has the correction begun? So, if you’re horny to buy in Toronto, keep your pants on until April. If you’re looking to score in, say, Kelowna, please unbuckle.”

You have answered your own question. Timing can fluctuate, but like an ever-growing tsunami, the wave will eventually crash.
*
MF Global Bank Internal Run or How To Steal From Our Customers; Spain – Italy Defaults? Could be sooner than later; 2:43 clip Students desperate for work to pay their student loans off;
Run on Europe, Vullture Funds in Jersey and how Vulture Funds work.

6:13 clip Kyle Bass on Japan and debt; How the elite keep the poor out, Detroit, No Confidence, Last Resort, Frozen Market, JPM and GS Sticky Fingers; Frankfurt Group Europe’s hit squad.
*
Ice Storm Category 3 over Alaska; Obomba One thing to remember is he is simply a pawn, carrying out TPTB (Soros’) orders, and could easily be dispensed with; China The US is going to be spread too far and wide to have much, if any impact here; Blue Lobster Is this a telekinetic sign from Dog? Or is a shape-shifting alien transporting itself through worm holes? Super Congress Same as the USSR’s politburo; Kuwait and Bahrain; Frontrunner Ron Paul is considered to be in the hunt; Russia’s space craft strangely corrects itself; Ofuddleduddle Interesting what the headline says.

#47 Disciple's replacement poster for this coming week while he's on vacation on 11.17.11 at 1:16 am

Others……. can fly into a rage, feeling insulted and humiliated that a vulture is pecking their orbs out..Garth
================================
post tres excellent tonite.

3 more days until D returns…I’m getting typers cramp. my hands are turning into claws..I don’t know how he does it !

#48 The thing in the basement on 11.17.11 at 1:16 am

11 Turner Nation – thanks for the link. In some ways though, this is nothing new. Up until maybe the early 80s there were still lots of high-paying forestry jobs in remote areas of BC. Also fishing jobs. And Alberta has been boom-n-bust before too. But most people have to learn it for themselves.

Interesting reference to a need for mine workers in Canada over the next few years. How many of our young people will be willing to do them, and live where the jobs
are though?

#49 Disciple's replacement poster for this coming week while he's on vacation on 11.17.11 at 1:17 am

Should I change my name to Disciple’s disciple ?
anyone?

#50 BPOE on 11.17.11 at 1:21 am

Beautiful looking chart. Not as beautiful as Vancouver but still looks great Folks there have been people like the american and junius renting for the past 10 years. WOW did they ever miss out. Does anyone out there seriously think prices will revert back to 10 years ago. A couple of associates were in China recently. Everywhere they went everyone was talking about Vancouver and how they want to move there. Things are looking great folks

#51 OnlyTheBankersLaugh on 11.17.11 at 1:23 am

http://www.despair.com/government1.html

Prices had already risen reasonably and well above inflation by 2007 for the average wage gains in previous 10 years but I guess that this is irrelevant when the MSM/realtor focus changes to monthly payments which is still the case with interest rates that appear to be going nowhere for years due to next reason for economic malaise. Hardly anyone believes that interest rates will ever go up here and most believe that houses are a safer investment than financial assets and ALMOST every single talking head in media espouses the beauty of this asset class.

When one sees Canadian Watchdog’s posted link of GTA price chart for single detached from $300k in 2008 to almost $600k now, it should just floor normal humans based on a financial crisis, a little recession and little wage growth. However, it seems to be received by the masses as their “we’re finally arrived and been recognized” moment ramping up that smugness that we see out there towards the USA and the rest of the world as if we did something great or actually created something innovative to deserve these valuations. It is nonsensical why government has propped this up to ultimately close off consumer spending when all these people get into the market which ultimately limits our consumer economy. Astounding plan! And the fact that most people seeing what we have seen for 5 YEARS still do believe that our financial system wrt mortgage approval is rock solid. Harper and Flarp obviously knew how stupid the masses could be to paint the pretty picture required for a majority.

Even better plan than those radical and menacing teachers in their befuddled and unbeknownst collusion with the 1%, eh, Smokin’ Man? They’re coming for you now…. close the blinds or get thee away to the ‘Downer or Treasures where you are safe. Hookers, strippers, the voice in your head, Pink Floyd and Rye, oh my.

Crazy times for you, DA, let’s watch and wait. I don’t think anyone believes the fall is over in Kelowna but keep up the confident argument. That always sells. I love the sheer volume of all those posts!

#52 bps on 11.17.11 at 1:33 am

China feeling property pain…

http://news.xinhuanet.com/english2010/business/2011-11/16/c_131249854.htm

#53 Van guy waiting on 11.17.11 at 1:49 am

Tear down
1643 GRANT ST VANCOUVER
MLS® V919156
Asking $638,800
35×99 lot
1300 sq/ft

Sold $723,000

Still battling away in Van. Quite a few battles this month already. November looks busier than Oct. Prices likely up MoM. Looks like mating season has begun for Van.

#54 edmonton guy here on 11.17.11 at 1:57 am

I’m wondering to what effect future prices because of the fact that hundreds of Condo Towers build in Toronto will have failing insulation & water leaks due to a short lifespan on them. Not to mention they are over building Big Time! http://www.cbc.ca/video/#/News/Business/1239849460/ID=2167497285

In Edmonton ALberta Canada here we’ve had a huge streak of mulitplex wooden walk-ups going in for mould repair at $25,000-$45,000 per owner with the Tessco built buildings and a few other cheaply made walk ups. Now the 2 bedroom 2 bath 1100 sq ft units are down to the low $200,000 range for selling price, but in Edmonton around 2007 were selling for over $400,000!
SUre Glad I didn’t buy one of those! We have a condo nightmare unfolding in Edmonton as Foreclosure surge over 700% from 2007! EEKS!

#55 Andrew from Saskatoon on 11.17.11 at 2:44 am

#92 JohnnyBravo from yesterday’s blog

“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.”

Don’t kid yourself. Homes can easily go to zero. If a home ever requires more in repairs than it can command in a sale, its value is effectively zero. Homes get abandoned and demolished all the time. Even ones that don’t have a mortgage.

People have their heads so deep in the beaches of ignorance, I just can’t stop shaking my head…

#56 Boycott on 11.17.11 at 3:12 am

Why reduce $50000 when one can pay maybe a interest only mortgage of $2000 for 2 years..and see where the market goes…

Its the thinking people have in the current market of slow sales. They are fighting a losing battle. Eventually its either a greater fool or a foreclosure.

#57 from kits on 11.17.11 at 3:22 am

more horny tonight than usual…

#58 Jeff on 11.17.11 at 4:14 am

“Thanks for reminding us how useless Internet polling is. — Garth”

Why do you have such a hate on for Ron Paul? He’s not going to hurt you.

On another note, Alberta now has a female premier, a visible minority as leader of the opposition and a muslim mayor in Calgary, all you nitwits from Ontario stop calling us rednecks, that’s what you call that idiot mayor you have in Toronto.

#59 plain_janey on 11.17.11 at 4:52 am

So people are starting to question their lives where they are “existing just to make mortgage and property tax payments”… and you think it’s your blog that is pathetic?

#60 Aussie Roy on 11.17.11 at 6:10 am

Aussie Update

The property bubble makes us slaves to each other’s debt

While my recent commentary demonstrates Australian housing is in a bubble, I have not explained where this situation has come from.

Asset markets, in this case, property, are the subject of speculation based upon the delusional premise that past price rises will continue indefinitely into the future, with no chance that a downturn will occur. The dream of creating and realising capital gains has prompted ever more Australians to participate in the property market as either first home buyers or investors (speculators).

Incomes rise too slowly and savings are too low to inflate a bubble into the stratosphere. Another ingredient is needed: mortgage debt.

http://theconversation.edu.au/the-property-bubble-makes-us-slaves-to-each-others-debt-3649

It is surprising to review the latest Moody’s Invester Services report to find out that there are 240 regional postcodes in Australia that have delinquent home owners with greater than 70 per cent loan to value ratios (LTVR). Even more alarming is the 84 regional postcodes that have delinquent home owners with greater than 80 per cent LTVR. This is a significant volume.

It appears there are many Australians who are highly geared, with high loan to value ratios

http://www.australian-real-estate.net.au/investing/2011/11/14/240-australian-regional-postcodes-have-delinquent-home-owners-with-greater-than-70-loan-to-value-ratio/

Auction clearance rates just keep falling – no surprise really.

National clearance rate 46%

http://www.myrp.com.au//showNews.do?id=508

You can’t beat the Tax man.

AN ELDERLY man allegedly withdrew more than $650,000 from his bank accounts following a request from the Australian Tax Office to lodge tax returns dating back to 1995.
Brian John Wheatland yesterday pleaded not guilty in the Supreme Court in Burnie to two counts of conducting two or more transactions to avoid reporting requirements as well as one count of possession of property from the proceeds of a crime.

The court heard Federal police found $650,200 cash in $10,000 bundles, along with bank receipts, in Wheatland’s Ulverstone house in March 2006 and that the money was Wheatland’s.

http://www.theadvocate.com.au/news/local/news/general/man-had-650k-in-house-court-hears/2359117.aspx

AUSTRALIANS have more and more bedrooms, but more and more often they are empty. The latest biennial housing survey by the Bureau of Statistics finds us with more empty bedrooms than ever before and also less likely to own our homes outright.

Traditionally one of the world’s highest, Australia’s rate of outright home ownership has slipped from 42 per cent to 33 per cent in the past 15 years.

At the same time the proportion of households trying to buy with a mortgage has climbed from 30 to 36 per cent and the proportion renting privately has climbed from 18 to 24 per cent.

http://www.smh.com.au/business/property/plenty-of-space-at-home-but-fewer-owners-20111116-1njbb.html#ixzz1dxKKEoxV

Buyer beware

ANZ and Commonwealth Bank, facing the highest relative yields at home in two years, are selling the nation’s first covered bonds to reduce borrowing costs.

http://m.smh.com.au/business/markets/anz-first-out-of-the-blocks-with-covered-bonds-20111116-1ni1z.html

China

BEIJING, Nov. 16 (Xinhuanet) — Confidence shaken amid falling property prices as real estate agents suffer sudden slowdown in top-tier cities.

Li Wei, a company executive in Beijing, is depressed. The value of his apartment has shrunk by nearly 500,000 yuan ($78,700) as property developers slash prices to stimulate sales.

“It took me at least four years to save the 500,000 yuan, but the money evaporated within eight months!”

Li, 30, bought a two-bedroom apartment in the capital’s Tongzhou district in February at 19,800 yuan a square meter. The price now is 13,400 yuan.

His case is not unique. With more property developers suffering cash-flow problems, under the government’s tightening measures, they are making wider and deeper price cuts across China’s major cities.

http://news.xinhuanet.com/english2010/business/2011-11/16/c_131249854.htm

#61 Cow Man on 11.17.11 at 7:44 am

# 12 Canadian Waatchdog

Thank you. It is posters like you who have me addicted to Garth’s blog. The truth with no profit motive. And Garth of course.

#62 bigrider on 11.17.11 at 7:55 am

Excellent post today Garth.

Third last paragraph from the bottom that goes into the difference of how people view the sale of a mutual fund over the sale of their house is so fckin true !

#63 bigrider on 11.17.11 at 8:00 am

#13 Original Dave to Nonna Nicola

Yes come back Nonno or should I say ,Johnny Bravo alias maybe?

#64 AM on 11.17.11 at 8:15 am

From BPOE…
“A couple of associates were in China recently. Everywhere they went everyone was talking about Vancouver and how they want to move there. Things are looking great folks”

Ya, sure..

#65 neo on 11.17.11 at 8:16 am

#28 Mark

“…so the question is, will they raise interest rates or will canadians start losing their jobs? both very unlikely …”

You obviously didn’t read our last unemployment report in October where we lost 72,000 full time jobs and over 50,000 jobs in general. The majority of which were in Ontario. The second half of this year leading up to September was flat or no job growth. We had a good report September because teachers went back to work. Raise your hands if you think November will be a stinker as well…You might want to do a bit of research before you claim something to be “very unlikely”. The “voluntary” raising of interest rates is very unlikely however. I agree with you there.

#66 bigrider on 11.17.11 at 8:35 am

Here you go. Karl Bass Hayman capital. Made a fortune shorting U.S housing in 2006 and made an asymetrical bet on Greece defaulting, get this, back in 2008 !. That asymetrical bet paid 700 times . Guys brilliant.

Guess what he is short and what he is long. Watching worth every minute .

http://www.youtube.com/watch?v=K-F_QF1XTXI&feature=youtu.be

#67 Chuckles the Clown on 11.17.11 at 9:05 am

#49 Disciple’s Replacement

“Should I change my name to Disciple’s disciple ?
anyone?”

Absolutely Disciple’s disciple! The only problem might be that since Disciple is named thus he must be the disciple of someone, some guru, all knowing karnac type. So if that is the case, and only Disciple can clarify this upon his return, you may in fact be the disciple of Disciple of the Guru. Give those wrists a good shaking and get back to it today. You have a following!

#68 fancy_pants on 11.17.11 at 9:17 am

They believe the momentum is endless, prices will always advance, and any flatlining is temporary. So if things soften, most respond not by adjusting their asking prices lower, but trashing their listings in a huff.

Exactly.

It like an ostrich sticking it’s head in the sand or like a person plugging his ears and shouting “la,la,la,la”.

One the reversal takes hold, people will be falling over themselves looking to get rid of their “bad” RE investments as they decline in value by the day.

A mad charge to the exit door is coming.

#69 Nonno Nicola on 11.17.11 at 9:20 am

#13 The Original Dave

A tank a you Davido Originale. No worry if da people no understanda Nonno Nicola. You capice what I saya and so does Bigga Rider. The landa and the housa they always go uppa, uppa and uppa. My neighbour, he buya Nortel ten years ago and losa everything. I tell him, you a stupido. Buya da housa and watch da housa go uppa, uppa, uppa. They have da educazione, they reada the newsapapera, they watcha da businessa newsa on da televisiona and Nonna Nicola justa laugha at these smart assa who tinka they no mora than Nonno Nicola.

#70 Oasis on 11.17.11 at 9:32 am

imagine that, central banks, selling their US dollars for Gold. what a worthless metal. why would they do something so stupid?

http://www.theglobeandmail.com/globe-investor/central-banks-make-biggest-gold-buy-in-decades/article2239253/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Energy%20&%20Resources&utm_content=2239253

The answer is in the story: “Emerging market central banks intent on diversifying their growing foreign exchange reserves.” I see gold is down another $30 today, even amid warnings of European contagion striking US banks. Whoops. — Garth

#71 Andrew from Saskatoon on 11.17.11 at 9:49 am

#25 Not 1st

“But people who refuse to sell at a loss will keep this market buoyant longer than we think I suspect. ”

How do you figure that people who squat in their homes will keep the market afloat? How does that make any sense? If their home is not being transacted, then their home is not part of the resale home price statistics. If the only people selling their homes are the ones willing to take a loss, then THAT is the housing market! Squatters don’t count!

#72 jess on 11.17.11 at 9:51 am

#46 Nostradamus Le Mad Vlad
refco . i wonder if there will be similarities amongst the irregularities ….500m. in fake bonds and offshore secrecy havens.
===
google bae and the word fraud

http://www.youtube.com/watch?v=pcBpaNQsGic
read the text below

Jubilee Debt Campaign UK : Media releases : Vince Cable’s …www.jubileedebtcampaign.org.uk/…Cached
You +1’d this publicly. Undo
30 Oct 2011 – These loans were considered to be too risky to be financed under ECGD’s normal rules to ensure British taxpayers received their money back. They were made under a special ECGD provision (section two) where there is an overriding ‘national interest’ that the loans are made. b) In 1979 and 1980 ECGD …

#73 Hammer1 on 11.17.11 at 9:59 am

eaglebay – Parksville
from yesterday responding to meat video
I love steak too., but since I viewed these videos a few months ago, we now eat vegetarian a few days a week. We still eat fish, eggs , some dairy and some chicken.
If I do have a hankering for some red meat, I’ll buy organic. It’s about double the price, but the company(Rowe Farms-Fortinos in Ontario) insists that the animals are raised by smaller farms and are free range and not injected. I guess I’m more opposed to large factory farms and processing plants where the sheer volumes going through ensure that many animals suffer while on the farm and in transport and killing.
btw, I grew up on a pig farm near Stratford ON and have vivid memories of my dad bashing in the skulls of piglets(runts) and castrating boars without any painkillers. These are the practices that should change.
Thats why groups like mercy for animals and Canadians for the ethical treatmentof farmed animals are working to expose abuses in large corporate facilities. One recent exposure is the practice in Canada of putting more boars on trucks that is legal and using baseball bats to break their snouts so that they won’t fight on the trucks. They cower in pain and suffering while freezing or boiling in the summer heat for hours.
anyway cows and pigs are too cute. Its really hard for me to imagine eating them now. Birds and fish are not as cute, so it makes it easier to ignore their plight too.
When people see those videos, for some ,its shocking enough to help them to realize what they are actually eating.
It’s more conscious eating.

#74 nmh on 11.17.11 at 10:12 am

saw this on bnn
http://www.bnn.ca/News/2011/11/10/Vancouver-faces-falling-home-prices-Genworth-MI-CEO.aspx

Other site to look/read on: Canadabubble.com

#75 JohnnyBravo on 11.17.11 at 10:15 am

#55 Andrew from Saskatoon on 11.17.11 at 2:44 am

“Don’t kid yourself. Homes can easily go to zero. If a home ever requires more in repairs than it can command in a sale, its value is effectively zero. Homes get abandoned and demolished all the time. Even ones that don’t have a mortgage.”

OK…

First of all, I said ‘en masse’. Sure, any house on its own can ‘go to zero.’ But how often does this happen today in large numbers at the same time, like what happened in Detroit?

Second, I would call a situation where the repairs out-cost the house “extreme.” It may be getting more common, but it’s still extreme, especially in prosperous urban centres.

Third, even if the house itself is a liability and not an asset, there is still the land value. Outside of (again) very extreme situations (again, like certain areas of Detroit) property does not go to zero. Go find a tear-down in T.O. and see if the seller will give you the property for free.

I have a friend whose property is worth about $2 mil. The house itself makes up only about 10% of the property’s total value (and it’s no tear-down; it’s a very large, very nice, if old, house). So even if the house was an abandoned, dilapidated, rotting, shell, the property would still be worth about $1.8 mil.

That’s the point. The real value is in the land, not the depreciating, money-draining structure. And that’s why I don’t like condos. If your house fell down you’d still have the land value––where most of the value is. If a condo tower falls down, what would your condo “property” be worth? I know: extreme. But you get the point.

#76 JohnnyBravo on 11.17.11 at 10:20 am

#63 bigrider on 11.17.11 at 8:00 am

Mi scuso, non sono io, ciclista grande.

#77 Maya on 11.17.11 at 10:24 am

Today in Reuters: Watching the U.S. home market struggle to rebound is like listening to children in the back of a car. No, we’re not there yet.

http://www.reuters.com/article/2011/11/16/us-usa-housing-prices-idUSTRE7AF1Z820111116

#78 Bigrider on 11.17.11 at 10:29 am

#69 Nonna Nicola.

U know nonno Nicola, u maka lotsa fukina sensa.

La terra e sempre la terre filio

My nonno don’t know la differenza a la stock market or la marketo a vegetale but he have a lot a money all in the land.

#79 Willa on 11.17.11 at 10:44 am

The Globe has a slide show of topics that nobody’s going to teach kids during Financial Literacy Month. I think most of the topics mentioned would be Garth-approved.

http://www.theglobeandmail.com/globe-investor/personal-finance/taboo-topics-during-financial-literacy-month/article2238283/

#80 Off the river on 11.17.11 at 10:45 am

Hey Garth!

When are you going to stop infactuating on BIG CITY CANADA?

It’s so Upper Canadian and Boorish.

Why not do a good segment on Rural Canada with a commentary on the future Canadian dollar?

‘Infactuating?’ — Garth

#81 Herb on 11.17.11 at 10:47 am

#49 Disciple’s Whatever,

“Disciple’s Disciple” is good. The long version you’ve been using involves too much typing.

You must have liked the user trial I did on the new form at comment #158 on the 14th.

#82 noracharles on 11.17.11 at 10:50 am

Garth, maybe you can tell me what the logic is here, cause I don’t understand it. I was keeping an eye on condo listings in a specific area in Toronto to see what condos are listed/selling for and tracking the prices for when I eventually want to buy:

condo listed in april for 359,900 1-bed, great location – steps to subway (st.clair-yonge), good size rooms for a 1-bed condo in godless T.O., NO parking. No buyers. They reduce to 349,900. Still no buyer. At the end of October I see it’s been taken off mls and think it has been sold. But it wasn’t, when I adjust my price search I see that it has been re-listed at a HIGHER price – 354,900, and the agent has the nerve to say it’s priced to sell! What the heck? If something isn’t selling, let’s raise the price?? Can you explain what the agent is doing, cause frankly I don’t understand.
Thanks!

#83 Daisy Mae on 11.17.11 at 10:55 am

“SOPA is a project that will face a slow death and maybe a good place to buy in 2 years when completed.”

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

Can’t get any info — not even floor plans — unless you ‘register’ giving them your full name, phone number and e-mail address. What tactics. What a laugh.

#84 Devil's Advocate on 11.17.11 at 11:00 am

#30Canadian Waatchdog on 11.16.11 at 11:53 pm
#20 Devil’s Advocate

I agree about averages being skewed and not representing the real market, but I ask you: Who will lend more debt to a nation whose household debt-to-disposable income is approaching 150%? How do you see these prices sustaining over the years?

The markets will seek to achieve equilibrium always. That process may be fettered somewhat by misguided government intervention but ultimately the markets will have their say. Equilibrium is always sought and achieved one way or another although the Darwinian process of getting there can be excruciatingly painful for many. The trick is to not let the economy get into a state of disequilibrium in the first place. And who do you blame for this current state of affairs? Seriously who do YOU blame?

Business, be it big or small works with the markets and ultimately answers to them. You can trust business to always seek to satisfy its customers. The whole notion of “too big to fail” is one of government not business. Of course they will take the bailout if it is offered them. But without satisfied customers business will fail. With business you get to vote every day as you choose who you patronize and who you do not.

On real estate: As I have mentioned many times in the past; my business is recession proof – extremely competitive but recession proof. Everybody needs a roof over their head, be it owned free and clear, mortgaged to the max or rented. This is certainly an economy in which the things you want are getting cheaper by the day but you still cannot afford them because the things you need are getting more expensive. I am sorry but housing is one of those things you need which is going to be relatively more expensive. Don’t blame my industry for that. It is a consequence of the market as each seller sets their own price and more often than not that price is higher than their REALTOR recommended. But ultimately those sellers, and buyers, are conducting themselves in accordance with the current state of the economy.

It is what it is and will be what it will be just do your individual best for you and yours here and now today. If you do the best you can for you and those important to you things will work out. Cast your vote with each dollar you spend. Maybe a vote for WALMART is a bad idea?

#85 Herb on 11.17.11 at 11:05 am

“Stickiness” also applies to other things, such as sailboats. Having been in the market to fulfill a life-long dream this summer, I’ve been following used boat prices for a while. There is a nice cruising catamaran that was first offered in January for 60K. It’s still on the market for 60K in November.

Did put in an offer on a boat advertised as being in “excellent condition.” It wasn’t, so my offer deducted the cost of putting it in good condition from the asking price. I didn’t get it You see, the owner is a physician, which means that he doesn’t need the money but hasn’t got the time to spend on maintaining a boat. So now the boat is sitting “on the hard” waiting for better offers in the spring.

Should be an interesting housing – and boat – market next year.

#86 Ret on 11.17.11 at 11:06 am

#65 Neo “We had a good report September because teachers went back to work.”

I assume that you are not referring to full time contract teachers who are not part of the numbers as they are on 12 month contracts and not allowed to claim EI.

However, the numbers would be influenced by nearly all non-retired supply teachers, school secretaries and educational assistants who claim EI during the summer months. School bus drivers would also go on and off EI with the timing of the school year.

#87 Johannes de Silentio on 11.17.11 at 11:12 am

Garth, a similar question to April’s (post #16):

when you refer to godless Toronto’s real estate bubble, do you also include the fringe of the 905 like Whitby or Oshawa? Not the near-Toronto suburbs like Mississauga, but the ones further out.

Much appreciated.

They are already markets in decline. — Garth

#88 frustated and dissapointed on 11.17.11 at 11:26 am

I am still waiting to buy and frustated now because prices has gone up and can’t afford it at all , what do you see happening in Toronto in April? why in april 2012, how it is different from 2011?

If you don’t have enough money, don’t buy a house. Problem solved. — Garth

#89 Van guy waiting on 11.17.11 at 11:55 am

#50 BPOE

“Everywhere they went everyone was talking about Vancouver and how they want to move there. Things are looking great folks”

We better start building ghost cities then. They’re coming folks! Of course 99% of Asia would want to get the hell outta there. That’s a lame comment!!!!

#90 Disciple's replacement poster for this coming week while he's on vacation on 11.17.11 at 12:07 pm

#81 Herb
yes, I think you’re correct. thanks..it must have stuck in my left brain medulla oblongata. I also have to run the new name by the boss man.
The creative juices are stirring for today. stay tuned.

(I’ve often wonder how long the G-man spends typing his posts..does he spend the whole day doing bits and pieces or does he put it off until 8 pm?..maybe it’s either depending on the day)

#91 Devil's Advocate on 11.17.11 at 12:13 pm

#85Herb on 11.17.11 at 11:05 am

I hear what you are saying on the stickiness of boat prices and it is a very good analogy to the housing market.

We have been in the market for an upgrade boat for a while now. We generally look south of the boarder as prices there are a lot better even after import costs. Still boat prices in the US have held amazingly well considering the reported state of their economy.

The thing of it is boats are a discretionary expense and in an economic downturn typically the first thing that gets cut from the family budget as they pare down expenses. The last of those expenses they cut are typically those of house and home as all others are slashed to save it. But boat prices in the US have not capitulated so much as one would expect given that reported state of their economy. This leads me to believe the economy there is not nearly so bad as reported. And indeed I have seen no evidence that it is that bad – not good to be true but still chugging along.

More telling is that the US economy started its decent two or three years before we in Canada did, and still those boat prices are holding. Yet on this blog you hear of, apparently, incredible house prices in places like Phoenix and Florida. Florida by the way is the boating capital of the world. So all those Florida properties can be picked up so cheap yet a sun-beaten boats still commands top dollar? I think something is amiss in that logic.

Could it be that the general state of the economy, both north and south of the 49th, is not nearly so bad as it is reported to be by the general participant on this “pathetic blog”? I know when, occasionally, I break the habit of trying to convince the posters here that things are not as bad as they seem I certainly become more aware that fact myself. (and a light bulb goes off in his head). Good-bye.

Oh by the way Herb, you think Garth slams real estate. Garth hates boats.

The difference between a power boater and a sail boater is a power boater has somewhere they want to get to – A sail boater is already there.

#92 D on 11.17.11 at 12:15 pm

I’d like to point out the AVERAGE PRICE skewing:

10, $100k homes are sold, average price: $100,000.

add 1 $3 million home, average price: $363,636.

Suddenly because of 1 home, the average went up $263k, and the 10 owners of the $100k home think they are rich!

Try it the other way around:

10, $100k homes are sold, average price: $100,000.

add 1 $3,000 home, average price: $91,181.

Average price only moves down $8k.

Interesting. That’s why as long as 1 big $m home is sold prices “look” like they are going up.

#93 Junius on 11.17.11 at 12:25 pm

#84 DA,

You said, “The markets will seek to achieve equilibrium always. That process may be fettered somewhat by misguided government intervention but ultimately the markets will have their say. Equilibrium is always sought and achieved one way or another although the Darwinian process of getting there can be excruciatingly painful for many. The trick is to not let the economy get into a state of disequilibrium in the first place. And who do you blame for this current state of affairs? Seriously who do YOU blame?”

The answer after 3 years of financial crisis remains the same. The blame is on the financial services industry and the politicians that let them out of their cages. The blame is on financial deregulation that led to greater speculation coupled with policies that encouraged speculative lending and cheap borrowing.

And yes, things will return to an equilibrium which means that credit will tighten as the world deleverages. It also means that speculative assets such as real estate and gold will decline in value over time.

#94 MixedBag on 11.17.11 at 12:35 pm

I was kinda lucky. We bought our bungalow in Nov 2008 – right near the bottom of that red dip in the graph – so we got a pretty good price. Doesn’t make much of a difference if you sold around then and are moving with the markets, but effing great since we were first time home buyers!

Kinda lucky, not super lucky, because my ‘financial advisor’ didn’t react accordingly with my funds when the markets showed signs of tanking. When I asked why they didn’t move them out earlier, the response? “Because you’ve been talking about buying a house a long time”. So instead of being able to buy the place outright, I’m paying monthly and waiting for markets to catch up.

Something tells me it’s time to give Garth a call.

#95 Devil's Advocate on 11.17.11 at 12:36 pm

As great a comment on life as it is physics;

“Nothing happens until something moves” – Albert Einstein

Think about it…

#96 Paul on 11.17.11 at 12:38 pm

#31 DA.

Who are you trying to kid?. My brother in law bought a condo on West St off Pandosy on spec in 09. Put $40k down on 450k suite and then walked a year later because prices had gone down to 350k for the same suite. Prices have not recovered on those buildings. Anyone that bought back when they went on sale have lost $$$. That’s IF they can sell them.

#97 Junius on 11.17.11 at 12:42 pm

#50 BPOE,

Another confirmation of your bankrupt economic philosophy. It is all about HAM for you isn’t it? Without that you have nothing.

Where does that leave you with China’s bubble bursting? In a word – OVER.

#98 GTA Girl on 11.17.11 at 12:43 pm

A group of Canadian developers are in China this week. They’re guests of the Builders lobby group. Many from Toronto. They are there to garner more foreign speculator money from the Chinese.

Unbelievable

#99 Van guy waiting on 11.17.11 at 12:44 pm

#82 noracharles

I’ve seen something like this for a sfh in van east. Priced at $849,000 for 40 days. Reduced to $799k. Sold 5 days after for $850,000!!!!!! Effin ridiculous!

#100 Disciple's replacement poster for this coming week while he's on vacation on 11.17.11 at 12:47 pm

OK, wow, it’s day four and I feel like I have the wind at my back now. What a great feeling.
So, I basically have 3 days to go and I have to say it’s been an honour and a privilege to be sitting in here for D. Those are big shoes to fill, but you guys have been very supportive and have given me lots of encouragement.
Today, I would like to discuss vibrational medicine and how it can save your pet’s life. This is very close to my heart. Presently, I am using this method on my tropical fish. I can already see them swimming stronger every day. I know that Garth will appreciate this as he has pets as well.
Behind every material object is an astral blueprint of colored light. In the astral world everything is motion, everything is living.
Life is energy. All living things are predominantly energy, with the form being just a small part of us. The energetic field is the blueprint for every living thing, and all perfection, as well as disease, originates there. When the experience of health and wholeness begins to be seen as that which permeates our entire being, from energetic through the physical, we come closer to the understanding of how life works and resonates within us all.
Vibrational medicines are remedies and technologies which carry high-energy frequency. This frequency invites the individual’s energetic field to resonate at this higher vibration. This balances and heals the energy system out through the physical body, integrating the whole being.
What is unique about vibrational healing modalities is their nature and how they work; which is with Source, rather than symptom. Traditional allopathic Western medicine struggles with symptom (effect). Vibrational medicine resonates with Source (Cause). It does not resist or fight disease but aligns with the perfect design behind it.
Another important field of vibrational medicine is sound frequency, which can support all aspects of being through tonal activation and pure note value. As creatures of frequency and vibration, animals easily balance and recalibrate on all levels when sound therapy is utilized. Sound is vibration, and when used to activate parts of the body that are ailing or out of balance, can restore harmony with rapid success. It is the simplest of therapies to administer.
The experience of working with vibrational remedies can be subtle to profound for human beings. With animals however, they often have immediate and significant effect. This is mostly because animals have not strayed as far as humans from their natural frequency and rhythm. Animals haven’t the mental blocks for the remedies to work through, nor do they have great expectations. They are attuned.
One becomes attuned to the unseen dimensions of support and influence, the heaven that creates the Earth, the substance behind and before the form.

#101 Junius on 11.17.11 at 12:51 pm

#51 Onlythebankerslaugh,

Good post.

You said, “these valuations. It is nonsensical why government has propped this up to ultimately close off consumer spending when all these people get into the market which ultimately limits our consumer economy. Astounding plan! And the fact that most people seeing what we have seen for 5 YEARS still do believe that our financial system wrt mortgage approval is rock solid. Harper and Flarp obviously knew how stupid the masses could be to paint the pretty picture required for a majority.”

The reason is that it was all about the majority. It was a Con job and they knew better. There is no way that making these policies during a time when the US market was collapsing could have been anything other than sheer stupidity. It was cold, calculated and now that majority has been achieved will be buried. Or not.

#102 Hicksville Alberta on 11.17.11 at 12:51 pm

#75 Johnny Bravo

Want to see real estate that very likely will have no value starting anytime from now on?

Just look at the Glass Tower condos in TO as per the CBC video posted by #54 edmonton guy here.

Even now if i was living in TO and wanted to buy a condo i wouldn’t bid two bits on the dollar for any of them (if i had to hold them) because where there’s smoke there usually is fire.

From the video there is tens of thousands of glass tower condo units in TO and if/when this tips over this could be get very infectious very quickly even to the point of infecting the whole condo mantra because in the end all condos are just more or less glorified apartment rental units offering the “owner” title to their little piece of heaven.

Under the right conditions (as in ultimate teardown) even the land beneath these buildings could well be worthless.

#103 Form Man on 11.17.11 at 12:55 pm

#84 DA
#140 Dorothy # 149 DA yesterday

DA ! I thought you were throwing in the towel ? I think you are mesmerized by the sheer logic of this blog in spite of your protesting. I agree that people need a roof over their head, however when the market creates more roofs than needed, there comes a correction. Being a realtor you sell on the way up and on the way down. That we get. Where you are wrong is in suggesting the market is self-regulating. It isn’t when the taxpayers are subsidizing it via CMHC, creating a subprime time bomb. That will become very apparent in the next few years. As to you not believing I am real, believe it buddy, I am.

Suppose the stats are wrong or twisted; then we will go with our gut instinct. Yesterday in my office there was a meeting involving a senior partner in a large local redi-mix company, a large local flooring company manager, and a realtor. I can assure you, the gut instincts of all of us corresponds with the stats. But what would we know ? we only have to meet a payroll. Realtors can swim along forever spinning their tales of deceit as they make money on the way up and the way down.
I have no doubt I am correct in my view of the local market. You, my deluded friend are wrong, and you have been wrong for a while.
Dorothy…..of course real estate is local, that is why the stat for Kelowna is worse than for the North Okanagan. The stat was, however put out by the BC Real Estate Association, so we will accept it. I apologize if stats like this are uncomfortable for some.

#104 Van guy waiting on 11.17.11 at 1:02 pm

Maybe some day the market can be where it was in 97. Back then my parents bought a nice home in Richmond. 10 years old 3200 sq/ft on a 5200 sq/ft lot. Asking price was $330,000. Sold for $280,000. Seller paid $340,000 brand new. Now they should get 800k easy. When you need to sell, sometimes you just have to.

#105 Steady Eddie on 11.17.11 at 1:19 pm

@ T.O. Bubble Boy – True that ….LOL… there was SUPPOSED to be a correction last Spring…

I’d rather stick to events… nothing is going to happen to TO until the next financial crisis….

#106 bigrider on 11.17.11 at 1:32 pm

#76 Johnnybravo to Bigrider.

Sorry but did not understand what you were trying to say.

#107 bigrider on 11.17.11 at 1:37 pm

#98 GTA Girl.

C’mon, you kidding me? I would love to know who they are. I could probably guess easily from a couple of initials or simple clues.

Are they going to show the Chinese how to make rapini a’olio and aglio as well ?

#108 Marina on 11.17.11 at 1:41 pm

Garth, could you comment why Canadian gov-t shut down sponsorship program for parents, starting from Nov 5th they do not accept new applications ; this mean that immigrants will be unabale to brign their parents in here any more – it is a nightmare for many-many families !!!

#109 Kilby on 11.17.11 at 1:44 pm

#100 WTF? Yawn…………………

#110 Horny in Edmonton on 11.17.11 at 1:58 pm

I admit to be horny, but am taking my time. Its all about forplay- right?
Looking at getting a house here in Edmonton. Sellers are not at all realistic. Have seen houses on the market for more than 4 months and not even a hint of price drop. Idiots.
I have put in 3 offers for 3 different places; all of which I walked away from. The sellers not wiling to move much or at all on their price ( for dumpy, “handy-man special” places). They continue to sit on the market. One place even re-listed their place at a higher price! Ha!

I know I am driving my poor realtor nuts. But at the end of the day I have a budget and I will only buy at the price I want to pay. Now that the snow is flying here in Edmonton I don’t mind even shooting for lower. Sellers just need to open their house to the reality of the situation.

#111 Devil's Advocate on 11.17.11 at 2:05 pm

#103Form Man on 11.17.11 at 12:55 pm

I am not going to get into a debate with you on the intricacies of statistical analysis or monetary policy. I’ve told you before that Kelowna is a very competitive town – extremely so. Many have come here to enjoy the lifestyle, which you must admit is a great draw, only to find they cannot compete in this competitive marketplace. Clearly you are finding it a tough unforgiving city as you fight it every step of the way.

Bear with me as I tell you one of the great concerns of our city is the potential lack of water to support our future growth. I do not share that concern. Population growth is not what we need. What we need is clean industry that provides good paying job prospects for those who already live here or their children who may want to stay here. At any rate the debate of water conservation is ultimately a hypocritical one. Did you know that just one of Kelowna’s irrigation districts uses more water than the city of Vancouver? And who is the primary user of all that water? They who run the irrigation districts – Orchardists! Orchardists spray water over their crops which in turn has a moderating effect on our climate like a huge humidifier. That ain’t natural my friend. But it does make for wonderful scenery in our valley which in turn draws more people to it.

We subsidize that behaviour (orcharding) through the Agricultural Land Commission forcing the land be used for agriculture and not development. Our orchards cannot compete with those of Washington State and never will be able to. But which would we rather have, orchards or people. Get rid of the orchards and I can pretty much guarantee there will be a whole lot fewer people who would choose to come to this naturally parched land.

Growth has a way of abating itself as we are forced by the laws of nature to return to equilibrium. Be it peak oil, water consumption or the economy you cannot change the forces of nature. It’s all good, really it is.

My point is I welcome change, I welcome a slowdown in the markets, I know eventually we will get closer to a point of equilibrium where all is good. Again; this is a return to norm not a departure from it.

What you don’t know Form Man is my past. To think you are privy to things I am not is a gross assumption on your part. Where we differ is I got in the boat and rode with the waves rather than into the water trying to hold it steady. Don’t mess with forces you are no match for, learn instead to use them to your advantage.

Too many cannot see the forest for the trees.

#112 Junius on 11.17.11 at 2:17 pm

#91 DA,

You said, “This leads me to believe the economy there is not nearly so bad as reported. And indeed I have seen no evidence that it is that bad – not good to be true but still chugging along.”

I just spent a week in the US Sunbelt and I can tell you that it is pretty bad. Anyone you speak to will tell you that things are very tough. Lots of premium items including boats being sold a blow out prices. Check out the prices for Real Estate in Southern California, Arizona or Nevada and you will be shocked.

#113 Junius on 11.17.11 at 2:25 pm

#111 DA,

You said, “We subsidize that behaviour (orcharding) through the Agricultural Land Commission forcing the land be used for agriculture and not development.”

Are you for one second suggesting that we don’t subsidize development? Unbelievable. There is not a single industry in this country that has received more subsidies than the development community. It may be different than the agricultural development community but if you add up everything from the CMHC cheap financing to the building of new roads, sewers and infrastructure at no expense to developers there is NO case to be made that the development industry has not had the run of the century.

My wife comes from the Okanagan and we travel there frequently. I happen to think it is criminal that we are bulldozing our agricultural land across the region for more houses. Why would we stop growing our own food and continue to have it shipped in from Asia. How can that be more cost effective in the long term when energy prices skyrocket?

Talk about not seeing the forest for the trees.

#114 Devil's Advocate on 11.17.11 at 2:34 pm

#112Junius on 11.17.11 at 2:17 pm

Why don’t you show me? Boats preferrably. Trust me I have enough REALTOR friends in Arizona sending me market stats and “best buys” on real estate daily to have a good idea what that market is doing.

#115 nonplused on 11.17.11 at 2:35 pm

Oh, there’s the revolution. I knew it had to be coming sooner or later.

http://www.zerohedge.com/news/technocratic-revulsion-begins-photos-and-video-thousands-italians-protest-montis-banker-governm

The end game begins.

#116 spaceman on 11.17.11 at 2:35 pm

Around the water cooler, stories abound, “My buddies house has been listed for 6 months, no offers” I have heard at least 5 of these, and have 2 close friends that want to sell, but are underwater. Now my story.

Garth will tell me I am nuts but I have a family and need a place to live. My rental is too small (but its cheap)

I placed a low ball on a fixer upper that is in some financial distress, but no go, even the counter at 90% of asking did not fly so it sits with no offers… All the comparables here in Victoria are 10% below asking, and still dropping. The listings tell the real story.

I really can’t afford to tie up a large sum in a house, therefore I think its better to wait until spring. I believe this will continue for some time, and a ton of listings are due back in January. We will see…

Make the same offer in three weeks and let us know the results. — Garth

#117 JohnnyBravo on 11.17.11 at 2:37 pm

#106 bigrider on 11.17.11 at 1:32 pm

I’m not nonna.

#118 JohnnyBravo on 11.17.11 at 2:39 pm

#102 Hicksville Alberta on 11.17.11 at 12:51 pm

Yup.

#119 Canadian Waatchdog on 11.17.11 at 2:46 pm

In terms of price-to-sales ratio for BC, ratio is in range as the late 70’s. The average price line (red) above sales volume indicates more bidding rather then sales activity.

http://i40.tinypic.com/9a68w7.png

Your charts add much to our discussion. Are you Gregory Klump in drag? — Garth

#120 bill on 11.17.11 at 2:50 pm

”The difference between a power boater and a sail boater is a power boater has somewhere they want to get to – A sail boater is already there.”
what a load of tripe.
powerboating and sail boating are pretty much the same thing.
the people involved with either form of pleasure craft are having the same amount of fun and can have very similar destinations or no ”destination” at all.

”sun-beaten boats still commands top dollar?”
are you serious?
some friends of mine wish to unload a 40 foot yacht with a fresh refit of new diesels. very low hours and yet that darn market to the south of us is selling them so cheap they are obliged to keep it.

#121 Dorothy on 11.17.11 at 2:50 pm

I don’t think anybody is questioning whether or not housing prices have softened in most parts of Canada, because the evidence that it has is overwhelming. The debate is more about whether or not our housing market is going to experience a U.S. style crash, and the majority of the ones on this blog debating that appear to be hoping for such a crash so that they can stop being renters and become homeowners.
As I’m a homeowner I’m obviously hoping such a crash never happens, although I know from history that large price fluctuations are not unknown, and are always a possibility.
That said, when I consider my options, I find myself prepared to remain in my home no matter what might happen to its value, because the world is such an uncertain place right now that WHEREVER you choose to park your money, it involves a certain element of risk. And if I sell my house and invest the proceeds, and my investments go bad, I would be left with nothing. Whereas if I keep my house and the value falls, I still have my home and a roof over my head.
Because I was always careful with my money, saved a decent downpayment, bought a modest house, paid my mortgage weekly, and lived beneath my means so as to be able to take advantage of the annual 15% interest free pre-payment, I saved thousands of dollars on the total cost of my mortgage by paying it off in half the time I would have otherwise. Consequently I am now in a position to ride out any potential price drop, and wait for the market to improve. But if it doesn’t improve, I still have my home and the roof over my head. So either way, it’s a win, win for people like me.
I believe there are more people like me out there than the doomers on this blog realize. Not everyone took a 5/30 mortgage to buy a home they could not afford. And while it is true that those who did will probably find themselves in financial stook should interest rates rise, I believe there are enough of us who were wiser than they, and who feel as I do, to prevent the market from crashing the way it did in the U.S.
So while I predict the current softening WILL continue as long as the world economic outlook remains so uncertain, there will be no U.S. style crash. So those of you who are waiting for a crash in order to be able to buy a house yourselves, would be wiser to do what I did and start saving a downpayment.

#122 Snowboid on 11.17.11 at 2:55 pm

Devils Advocate…

You are indeed the ‘Poster Boy’ for the real estate in the Okanagan, probably the gold standard as you once said.

However, life is too short to get ‘riled’ up about your delusional posts.

So here is my promise, this is my last post that will mention or reply to the great gold god of Okanagan real estate!

I assure you this is a promise I will keep!!!

#123 Chuckles the Clown on 11.17.11 at 2:57 pm

#100 Disciples disciple.

LMAO Disciple’s disciple! You have done well filling in for the all knowing all wise disciple. Take note Garth, for words of widsom are filling the comment section of your venerable blog. Just three more days to go Disciple’s disciple and then you can formally hand the reins back to the guru of all gurus, Disciple himself.

#124 Kilby on 11.17.11 at 2:58 pm

#113 Junius

Well put. We all need to eat and ,I believe less than 1% of Canada is suited to grow food. It is amazing to see how short term greed can cause good cropland to be turned into subdivisions. “plant the valleys, live in the hills”

Look at Glenmore to see the results!

#125 Form Man on 11.17.11 at 2:59 pm

#111 DA

Wrong again ! your capacity for delusion is only outmatched by your naivete. The agricultural land commision is the best thing that ever happened to Kelowna. I agree, the valley is beautiful. Because of the greenspaces and vineyards and orchards. That is the number one reason folks give for coming here. I have a sailboat and greatly enjoy the pastoral view from the lake in summer. The farmers were here long before the retirees.
I realize we have shredded all your arguments to date, and you are desperately trying to find some right-wing morsel you can cling to. And seriously, if you are going to attack me, try and stick with the facts I have put forth. Ignoring my previous posts and inventing imagined realities simply undercuts the feeble branch your are still grasping. Fear has overtaken you. You are starting to worry us with your irrational rantings….

#126 Nonno Nicola on 11.17.11 at 3:01 pm

Giovanni Bravissimo and Bigga Rider, you boysa stop a trying to decida who Nonno Nicola is a. Nonno Nicola isa Nonno Nicola and dat is alla you needa know. The only other ting you needa know is dat real estata only goes uppa, uppa and uppa. Capice?

#127 Grimbot on 11.17.11 at 3:02 pm

Canadians trapped with mortgage debt into their retirement years….

http://ca.finance.yahoo.com/news/Royal-Bank-poll-finds-age-55-capress-2462804664.html?x=0

#128 scared on 11.17.11 at 3:27 pm

#121 – Dorothy

You make some very valid points. However, even if one does save a substantial downpayment of say 25%, the risk is that if there is a drop in the market – it could all disappear. Sellers are still very stubborn and holding onto a bubble price which is now unsustainable in Vancouver. (Although there are still some idiots popping up sporadically paying stupid high prices) It would be unwise for a renter to jump into the market now. I am assuming that you bought your house a few years ago when house prices were a bit more affordable. Yes, everyone does need a roof over their heads, but not everyone needs to buy that roof at a nosebleed price.

#129 Mister Obvious on 11.17.11 at 3:33 pm

I take it the ‘bunga bunga’ parties may be over for the next little while in Italy.

#130 Edmontonian on 11.17.11 at 3:43 pm

Any property Virgins In Edmontonout there? Can’t wait to get a place?
Wake up, now is not the time
Housing prices in Edmonton down over $30,000 in four months!
http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html

#131 Devil's Advocate on 11.17.11 at 3:43 pm

OK, I get it. The narrow minds here are so prejudiced against me that regardless what I say they will find fault in it.

I thought about ignoring that and merely posting some thought provoking anecdotes that just might cause one or more of you to take pause and at least consider an alternate point of view.

I know the mere sight of my handle “Devil’s Advocate” sends many of the posters on this “pathetic blog” into a blind rage that they cannot see beyond their immediate accusation that exist for nothing more than to “sell”.

The fact is my participation here is far more costly to me than it is worth. The abysmal despair that overshadows this “pathetic blog” does take its toll if not the bitter berating I receive each time I try offer evidence of hope.

You win. I throw in the towel this time for good. I here-by and forever abandon the moniker Devil’s Advocate for use by another. Hence forth anything said under that name are the words of another. My hope is that maybe someone else will pick up where I left off carrying on the true spirit of my good intent. As for me I am done. I have neither the time nor the patience.

#132 sam.i.am on 11.17.11 at 3:59 pm

Oldie but goodie:

Vancouver BC Real Estate Market Roller Coaster

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

#133 JRoss on 11.17.11 at 4:02 pm

DA,

Where to begin – so much disinformation in one post.

First your explanation of local climate –

Yes the irrigation humidfies the local climate, but the effect is limited to those who are lucky enough to live adjacent. A new boundary layer adjusted to the different surface underneath will form very quickly once one moves away from the irrigated area. For the valley as a whole, the lake itself is a far bigger moderating influence (hint – which has a larger surface area).

And the orchards are really only replacing the evaporation that used to occur from the lost wetland that was once the Mission Creek flood plain, ‘reclaimed’ when the flood control dikes were built. Why do you think it is called ‘swamp road’ when it is a mile from the water?

Further the cooling and humidication of the orchards is offset by the ubanisation that has turned what was once the natural flood plain of Mill Creek from the airport to downtown into one giant patch of asphalt that looks like a strip mall took fertility drugs. That ain’t natural my friend.

So the human settlement of the valley has actually done far more to heat up and dry out the city than the orchards do to moderate it, but nice try.

And perhaps can’t compete growing apples. But we seem to do alright planting grapes, no? And, just for argument, there is another crop that has been shown to grow extremely well southern BC. One that can produce textiles, paper, biofuels. But Con tightassess like yourself won’t allow that that because ‘hemp is bad, mmmmkay’. Much better to bury farmland under asphalt ad condo to ‘reduce water demand’. Forest for the trees indeed.

“Growth has a way of abating itself as we are forced by the laws of nature to return to equilibrium”

Nice quote, but you have no idea what it means. Yes, a dynamic system will find a new equilibrium, but that is not the same thing as returning to the previous state. The Okanagan Mountain Park fire eventually burned itself out and the system found a new equilibrium. It will take generation to approach the same state as before.

The fuel of demograhpics, deregulation and rates is gone. There will be a new equilibrium, but it will be much different.

And lastly DA, if you really want to understand why you get such a hard time here, perhaps it is time to look inward. Take a big dive into ‘Lake DA’ and swim around to see what you find.

Or you can keep coming here to shout at the wind.

#134 Canadian Watchdog on 11.17.11 at 4:46 pm

#119 No just a stats nerd glued to a terminal all day and night.

I’m at no surprise to be on here for nearly a day, yet I’ve managed to pluck out the RE perma-bulls. No matter what blog I visit, they all have the same argument about stats—perhaps eco-101 wasn’t their thing—I get it.

For now I’ll tag along with the blog and provide further charts and information. As for my position on RE, I assess the market from a lender standpoint and when I see trends growing such as the chart below, it concerns me.

http://i42.tinypic.com/27bk7.png

#84 Devil’s Advocate

Are you familiar with Nash Equilibrium? You should be.

#135 VICTORIA TEA PARTY on 11.17.11 at 4:52 pm

THE “ALAMO”: 2011 FINCANCIAL STYLE

European and American elites’ responses to the now fast-worsening financial situation reminds movie-goers of the doomed American defence against the Mexican hordes in “Alamo.”

Yields on Italian and Spanish bonds hit record highs for 10 year maturities; their relevant credit default sawps flash warnings because of a lack of confidence in those bonds; Eurocrats are appointed, not elected, to the “new” Italian government; the “new” government in Greece calls for more financial help, essentially; the OWS movements reconstitute on Wall Street as the DOW seriously tanks.

Just another day in Investor Land!

MEANWHILE ON OUR CHUNK OF GRANITE…

Real estate in Victoria is now clearly on the downtrend. You can feel it in the air. The economic fall-out will be magnificent indeed.

All those using their homes as ATMs will be pulling in their financial horns this winter; no more cheap seats to Mexico; say goodbye to sidewalk cafes lattee days; start the big pay-back; watch for provincial austerity next year in this, a government town!

Europe, the US, Victoria: AKA Return to Mean, minus the seized-by-a-collection-agency coonskin hat and musket!
All out of ammo in the Alamo.

#136 @@@@@@@@@@@@@@ on 11.17.11 at 5:03 pm

@ #66 bigrider
“Capitalism without bankruptcy is like Christianity without hell.” Love it!

#137 Currently backwards to history on 11.17.11 at 5:12 pm

Nov 11
On this day, I reflect on the grandfather (I never knew) who had some of his parts come back from Vimy in the 1st WW to lose the battle for life and leave 5 children and a sick mom to struggle on.

No fail November 11th, 2011
Society dies a little every time a young person ducks risk.
Society also fails a young person when there is no opportunity for them to contribute.
During all the economic downturns families have become extended to share and commonly contribute to their well being – in some societies they have known no other life. We forget what a luxury independence is.

31 Nostradamus Le Mad Vlad on 11.12.11 at 12:42 am
but he does have a point.
Most of the decent- high-paying jobs have gone down ChIndia – Thailand – Bangladesh way, and as long as labor costs remain low, it is far more profitable for companies to relocate mfg. facilities, and use local labor.
We who have gone before, seen it coming, lowest price/cost before other considerations like origin or ‘pro bono’ (who benefits?). Toyoto, Lenovo, Tata, even Lada before Chev, IBM, SNC or Delorean. We’re lucky not to be hoisted on our own pitard.

29 Flint on 11.11.11 at 12:24 am
Garth, what would you recommend for people with low incomes and similarly low job security? I know a few people, myself included, who are savers but earn below average income .
As a bank against uncertain times 2 years ago I bought 1 80lb bag of kidney beans, 18 KG of Rice, 15kg of pasta, 40kg of flour and 100lbs of laundry detergent. Yes there was laughter – rice was less than 10 dollars now more than 25. Everthing else has gone up too. Latter day saints have yearly consumption on their website if you want to get an idea of where to grow savings. Also, I seem to remember GT reminising about grocers kindness to share past prime food stuffs in the early days. (hope my memory is correct)
#43 Smoking Man on 11.09.11 at 12:02 am
I have a low boredom tolerance..Come on man I’m getting board………….
Boredom is a state of mind not an environment –
whether sober or altered there is always still a little more room in any mind to fill in the corners.
I believe education as a system can be beat – let us know how you screwed the system in your competitiveness.

I used to be a camileon now I’m just a reflection.

#138 Vigilante on 11.17.11 at 5:12 pm

My Saturday Schedule in Edmonton

I try to schedule at-least 3 houses with my realtor. All in 500 to 700 thousand range.
I always make an offer with conditions. My offer is always around 75% of the asking price.
My realtor and the seller’s realtors always get pissed off. I am working with my 4th realtor right now LOL.
Sometimes the seller counter offers at around 90% to 95% of the asking price which I promptly reject and walk away.
I have no intention of buying.

Then you’re an idiot wasting everyone’s time. — Garth

#139 triplenet on 11.17.11 at 5:20 pm

DA
You remind me of a baseball manager who said “no-one ever goes there anymore – there’s too many people.” or with regard to your impending absence – “Deja vu – all over again.”
The boat story was too funny.

#113 Junius
Log onto the municipal websites of Surrey, Richmond, Langley and Chilliwack and discover Development Cost Charges or DCC’s.
Let us know what you find out about them.

#140 Devil's Advocate on 11.17.11 at 5:20 pm

1st?

#141 Bobo on 11.17.11 at 5:26 pm

By the way, Toronto sales in the $1.5 mil-plus range were up almost 50% y/y in October, while the low end of the market (below a half mil) was basically flat. That (change in the sales mix) explains a big portion of the pop in average detached prices.

#142 Bill Gable on 11.17.11 at 5:27 pm

Like Mr. Turner has been telling us – wrinkled set carrying big debt – but this blew me away –

“Survey results suggest Canadians might have unrealistic expectations of when they’ll be mortgage-free.

The Royal Bank of Canada poll, released Thursday, showed 72% of respondents with a mortgage expect to have it fully paid off by the time they are 65. However, it also found that 33% of those 55 or older still have at least 16 years left on their mortgages.

“Canadians want to be mortgage-free as they approach retirement age and beyond, but the reality is that it takes prudent planning and the right advice to stay on track,” Claude DeMone, RBC’s director of strategy for home equity financing, said in a statement.

MORT GAGE = Fr for “Death Contract” = now you know why.

http://tinyurl.com/8a7rjyo

#143 zeeman1 on 11.17.11 at 5:34 pm

#49 Disciple’s replacement.

YES, I look forward to the exchanges. Do it, man!

#144 Bottoms_Up on 11.17.11 at 5:43 pm

#82 noracharles on 11.17.11 at 10:50 am
————————————————–
The agent in question is trying to ‘shake things up’. As an astute observer you know what’s going on. But, for an unsuspecting virgin (that may have only recently started shopping), they read the words ‘priced to sell’ and think they’re getting a good deal.

#145 Form Man on 11.17.11 at 5:46 pm

#131 DA

Face it, you are turning tail and running from us because you can no longer carry on in the face of overwhelming logic. You haven’t introduced ‘ thought-provoking anecdotes’, you have paraded a strange ‘Ayn Rand/Stephen Harper’- fed delusion where facts are ignored in favour of ‘talking points’. When cornered, you lash out with completely unfounded, not to mention childish, personal attacks. Again, the last refuge of the ideologically deluded. We remember when your inability to understand grade school math caused you to angrily parade your university degrees in front of us ( immediately calling into question the robustness of our degree granting systems ), as if that somehow helped your cause.
Your latest suggestion that the ALR is holding back developers from proceeding in the Okanagan, strains belief.
Come with me my child; see the streets of empty building lots ?, see the half-empty condo towers ? See the brand new empty houses ? see all the weathered signs advertising long-abandoned projects ? that is because of a ‘demand’ problem. Not a ‘supply’ problem. I realize you are struggling with this simple concept, but carefully think it through. Reach back into those university years, when you had to think with logic…….

#146 spaceman on 11.17.11 at 5:49 pm

Make the same offer in three weeks and let us know the results. — Garth

As fate would have it, after our first offer fell through and we thought the house was sold to someone else, I retained the selling Realtor, as I really liked his style. So now he is representing both seller and buyer.

It has been well worth it to retain my own Realtor, the information he is able to access is great.

In 3 weeks i will do what you say… thanks.

#147 Daisy Mae on 11.17.11 at 5:51 pm

Westside News, November 17, 2011

TUSCANY VILLAS….”People camp out and brave the cold for condo deals….some stayed overnight in order to get wristbands to purchase condos at 50% off the original asking price…300 wristbands were up for grabs….numbered sequentially…the lucky person who lined up first received the first wristband….for an appointment time next Saturday.”

TUSCANY VILLAS is a collection of 84 exclusive residences overlooking the lake. One realtor stayed the night to register three clients.

(And by the way, the two Kelowna mayorlty candidates are arguing over the naming of RUTLAND. Shepherd is wanting to change the name, but Gray pointed out that it was named after John Rutland. After prompting from Shepherd as to what he’d like to call it, Gray admitted with a laugh: “Hooterville’ — everyone calls it that.”)

#148 Westernman on 11.17.11 at 6:05 pm

Herb,
Instead of blowing 60K on a boat why don’t you just stand in the shower and tear up 50 dollar bills? Same thing in the end.

#149 Canadian Watchdog on 11.17.11 at 6:11 pm

CBA stats for mortgages in arrears just released. Have fun with this one guys. BC http://i39.tinypic.com/qx2fcm.png

#150 DM in C on 11.17.11 at 6:11 pm

“…abandon the moniker Devil’s Advocate for use by another..”

Whatever.

You mean like that time last year when you said you would quit, then started posting under a pseudonym and having conversations with yourself?

You’re the boy who cries wolf. A passive aggressive who loves the attention, yet decries it when it arrives.

Why do you care if readers believe or even like you? Wait, you’re done, so I guess that’s a rhetorical question.

3…….2……..1…….

#151 Cato on 11.17.11 at 6:20 pm

If only it were a matter of pride.

Mother-in-law has a friend who is condo shopping, needs help negotiating a deal. I don’t mind helping little old ladies and I like offending RE agents even more. After probing a number of sellers, some of whom are sitting on vacant investment properties the truth about the housing market emerges. They all owe more than the property is worth and can’t satisfy the outstanding mortgage.

In the US these folks would have walked away long ago. In Canada they are just digging themselves & the country into a deeper hole. For all intents and purposes they are insolvent but refuse to admit it, maybe stigma of bankruptcy is too great.

So here we sit with a housing market that is quickly stalling because majority of sellers are trapped and unwilling to bite the bullet and walk away. No matter where we go from here things don’t end well.

If the market can’t flush out the losers we’ll be left with a housing market that appears stable but over time bleeds the economy dry. Canadians who could have dumped parasitic assets and start over simply go through life putting productive income into paying off a dead real estate asset. This is a growth killer and its probably where the country is headed. On the surface the housing market might appear stable, but in the long run the economic foundation of the country weakens. Income flows towards a dead asset class that doesn’t pay a rate of return, it doesn’t create jobs . Over time the rest of the world pulls ahead while Canada lags.

The other scenerio is the housing market flushes itself, driven by bankruptcies. It won;t be a US style collapse but it would be painful. CDN banks will require recapitalization on backs of taxpayers (CMHC). House values will decline which will initially shock consumer spending as it did in the US but as housing affordability improves consumer spending starts picking up. Income that in the past went towards mortgage debt goes towards investment & consumer spending. This type of spending creates jobs and drives economic growth.

Its ironic that a stable housing market might infact be our economic ruin. The longer prices remain artificially high the longer consumer spending will be curtailed and the larger our consumer debt bubble becomes. We’re already showing evidence of slipping into recession, and its a recession thats not going to end until RE eventually corrects.

#152 Victoria on 11.17.11 at 6:30 pm

Canadian Watchdog,

Wow. I would love to see them try to spin this.

#153 Van guy waiting on 11.17.11 at 6:37 pm

BPOE

One of the reason why Chinese and Asians wanna get the hell out. But it’s not that easy to leave.

http://veryvietnam.com/2011-02-25/cooking-oil-made-from-sewage-and-trash-in-china-vietnam/

#154 Junius on 11.17.11 at 6:37 pm

#139 triplenet,

DCCs hardly cover a fraction of the costs of development. As I am sure you know they are under 2K per household in most of the Lower Mainland. Clear proof that housing development continues to be subsidized by the general tax payer. Is that what you wanted to hear?

We subsidize lots of things in our society. In fact, every time someone mentions “free market” it sends my eyes rolling.

My point remains that developers, realtors and the rest of the RE industry has to stop complaining about agricultural land reserves and agricultural subsidies. I think we have reached the point where our food security warrants more attention than giving more cheap land to developers.

#155 Junius on 11.17.11 at 6:39 pm

#149 Canadian Watchdog,

Thanks for the chart.

Scary. Really scary. Even worse than I thought (and I thought they were pretty bad).

#156 The Original Dave on 11.17.11 at 6:39 pm

G, what do you think of the video posted by bigrider #66?

here’s the link again:

http://www.youtube.com/watch?v=K-F_QF1XTXI&feature=youtu.be

this guy seems bearish on everything. Hoping you have thoughts.

I couldn’t get past the HARDtalk graphics. — Garth

#157 Vigilante on 11.17.11 at 6:41 pm

Then you’re an idiot wasting everyone’s time. — Garth

I want to buy when the price is right and worth the house. I am just doing my part to let the speculators know, what’s coming….

Time is on my side , Realtors want the money…let them earn it. Get me value !

Learn respect for others if you expect any yourself. — Garth

#158 Form Man on 11.17.11 at 6:43 pm

#151 Cato

very well said……..I could not agree more

#159 Where's The Money Guido??? on 11.17.11 at 6:44 pm

An item came out on Alex Tsakumis’ site that shows the BC Liberal gov’t implicated in “derailing” the BC Rail sale to CN Rail fraud court case by paying the defendants’ $6 million lawyers’ fees and maybe $1 million in cash under the table to take the fall for Gordon (Guido) Campbell, former Premier of BC and now High Commissioner to Britain) and his at the time AG (Mike DeJong), Deputy Premier and now unelected Premier Christy Clark.
This case stimks to high heaven and shows how dirty and corrupt the gov’t’s in Canada really are and what they will stoop to to cover up their criminal acts.
Here’s the smoking gun !!!! John Doyle is BC’s Auditor General and is getting the shaft from the BC gov’t trying to get documents relating to the payoff.
http://alexgtsakumis.com/2011/11/16/open-letter-to-john-doyle-auditor-general-of-british-columbia-the-information-you-need-on-the-buying-of-dave-basi-and-bob-virk-by-the-bc-liberals-is-right-here/

#160 Vigilante on 11.17.11 at 6:54 pm

#130Edmontonian on 11.17.11 at 3:43 pm
Any property Virgins In Edmontonout there? Can’t wait to get a place?
Wake up, now is not the time
Housing prices in Edmonton down over $30,000 in four months!
http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html
—————————————————————–

That’s right, Its been going down on average from 2007.
I have been low-ballin the hell out of these houses. Sentiment has to be changed (forced). The arrogance out there for some craps with over $700K asking in Edmonton stinks. I am ready for a staredown….LOL

#161 Canadian Watchdog on 11.17.11 at 7:18 pm

Here’s a few more charts of provinces worth looking at. Stats are comprised of mortgages held with Canadian chartered banks. I’m trying to get further information if this data contains securitized mortgages (MBS), if so, CMHC (already being leveraged 25:1) would be paying a hefty premium on CDS interest spreads due to defaulted payments. Don’t worry, CMHC is backed by a printing press and your tax dollars will pay it back.

CANADA http://i41.tinypic.com/iw5fg0.png

ONTARIO http://i41.tinypic.com/1z6qvl4.png

BRITISH COLUMBIA http://i43.tinypic.com/e6ukvd.png

ALBERTA (don’t laugh please) http://i40.tinypic.com/2qbym2g.png

#162 Van guy waiting on 11.17.11 at 7:21 pm

#138 Vigilante

“I have no intention of buying”

If you have 3000 friends that would do the same, that could scare the sellers and start the correction ASAP.
Lol

#163 poco on 11.17.11 at 7:29 pm

Come on ….. you don’t really think DA is going to leave us, do you?
he’s addicted to this blog–similiar to a Van skid road junkie who is addicted to crack
he’s tried to leave in the past but it didn’t work for him—swore up and down –“that’s it– i’m done”– very similiar to these last few days
-withdrawl symptoms became overwhelming—just couldn’t stay away—had to post before he went phsyco(again)
tried a new moniker to fool us–his first post with the new name (don’t recall that one) was detected quite easily—-
as you can see by post #140 –he’ll never leave!!!

#164 Aaron - Melbourne on 11.17.11 at 7:33 pm

@#11 TurnerNation on 11.16.11 at 10:31 pm
This probably explains the Alberta situation, too:

http://finance.yahoo.com/news/the–200-000-a-year-mine-worker-.html
**********************
I was going to explain “Cashed Up Bogan” but then I saw it was explained in the article. Also worth a read of “The Bogan Delusion” which, while Aussie centric, does explode a few myths. If you want a laugh google for “Things Bogans Like” – hilarious web site.

Do Canadians have a similar tag for those that strike it rich in the mines or tar sands?

#165 Nostradamus Le Mad Vlad on 11.17.11 at 7:41 pm


#49 Disciple’s replacement poster for this coming week while he’s on vacation — ‘Owzaboud Disciple’s Prophet?

#72 jess — Wouldn’t be at all surprised. More treachery and fraud are committed while our attention is elsewhere, and it’s not going to stop anytime soon. Good links and post.

#137 Currently backwards to history — “We forget what a luxury independence is.” — Is that ever true, not being subservient to anyone. Good post.

#140 Devil’s Advocate — Slightly off with the math!
*
Of note, Nixon removed the gold standard in 1971. Why? Was it something to do with JFK? JFK was subsequently removed, but not by L.H. Oswald (Contagion ).

Fast forward to 2000, and Sadaam had stated that he wanted out of the petrodollar, preferring the Euro instead.

Theoretically, he was knocked off, ‘tho reports do circulate from time to time that he is still alive and living in St. Petersburg. The US destroyed a perfectly good country, based on deceptive lies.

Moving ahead, all these shenanigans (wars, increasing debt loads and failing currencies) started in the middle of the previous decade, when Libya turned up ( 5:20 clip ).

Gadaafi had taken Libya from being the poorest country to the wealthiest in 40 years or less, and obviously did not need the petrodollar, with its gold-backed dinar. They were quite independent, and didn’t need anyone’s help.

Now today’s nonsense re: Iran, which are the same lies used for Iraq. This is a pretext for US global war. The only reasons the west is taking Iran on is we are flat broke, want their oil and gas and using their nuke power plants as an excuse to do so.

So, let Three Mile Island and other nuke power plants here be bombed, and see how the west likes that.
*
Gorilla In Debt Can anyone see it; The First Casualty of MF Capital; Real Men Eat Quiche, but fraudsters end up in the slammer (for life); 15:20 clip 60 Minutes exposes congress’ insider trading; Daft Comments ‘To save the euro, Germany must be destroyed’; Profit Rationing Natural gas being rationed in UK? Secret Farm Bill that will cost billions; Hard Times Turkey should be prepared.
*
Adele Small bio and Rolling In The Deep; Ogreeno Most of the green loans went to . . .; Yes! A m$m reporter clues in — bigger govt., bigger corruption (3:34 clip); Radiation Budapest, not Ukraine seems to be the flavor of the day; Obomba Could be the reason for Harper wanting to build jails here; Google – Facebook; Facebook, Twitter and Domain Seizures; Woodstoves Don’t live in the US.

Jupiter Europa, one of Jupiter’s moons has lakes; Airstrike “Russia and Korea are likely to react far more strongly to Israel’s murder of their civilians than the United States did when Israel murdered that aid worker from New York in international waters last year.” wrh.com; Asthma Drugs kill more than asthma.

#166 triplenet on 11.17.11 at 7:52 pm

#154 Junius

I grew up on a dairy farm in the Fraser Valley.
My brother still farms it today.
I know all about the ALC and thanks to the milk marketing board we invest our retained earnings as a family.
You didn’t research DCC’s did you?
Try $14,000 – $60,000 per residential lot, payable PRIOR to LTO registration.
Think that’s alot – industrial land is higher based on acreage and building size.
Further, all costs including roads,sewer, power, sidewalks, parks, lighting and off site upgrades are costs to the developer.
Everything is bonded first, signed off by the municipality, with DCC’s paid upfront.
Think those costs are outrageous, check out the City of Vancouver.
Please do my friend.
It will be nice change from all the normative statements on this info blog.

#167 Stupesing in Cabbagetown on 11.17.11 at 7:54 pm

#121 Dorothy – some visitors here may be wishing for a crash but many others, like me, are alarmed by what we see as stupid and dangerous behavior encouraged by federal government policies. A real estate downturn will have dire economic consequences that will greatly harm this wonderful country. If and when such a situation happens, how do we protect ourselves? How do we avoid being part of the problem? We come to this blog seeking information.

#131 Devil’s Advocate – you flatter yourself to think that what you say is so important it flies people into “a blind rage”. Relax. It really isn’t.

#168 Disciple's replacement poster for this coming week while he's on vacation on 11.17.11 at 7:58 pm

#148 Westernman
just letting you know I will still be doing a post on how to expose your true identity using mind control techniques. Be forewarned westerdude.

#169 Jimbo on 11.17.11 at 8:05 pm

Garth, can you comment on what you see happening in Saskatchewan. I have so many people here telling me that we would be immune to any housing bubble because of all the resources we have that the rest of the world wants and all the job opportunities here that are making people want to move here. I myself find it hard to believe that we would be immune to a bubble.

Call me when you thaw enough to speak. — Garth

#170 Junius on 11.17.11 at 8:15 pm

#151 Cato,

Great post.

Here is the part that hits home with me:

“Its ironic that a stable housing market might infact be our economic ruin. The longer prices remain artificially high the longer consumer spending will be curtailed and the larger our consumer debt bubble becomes.”

My concern is that we are still living in this fiction that everything is fine and somehow we are immune from the Global financial crisis. It puts us out of sync with reality and leaves us very vulnerable as the rest of the world adjusts.

#171 VICTORIA TEA PARTY on 11.17.11 at 8:15 pm

POOLED PENSIONS: NEWEST, AND NEXT, CANADIAN NECESSITY

If big unions, like CUPE (and Dracula!), don’t like an idea, then it must be good.

Today some union factotum was bitching about the federal Tories’ newest legislative plan to try and get Canadians to save more for their declining years.

Called the Pooled Registered Pension Plan (PRPP) it will be introduced a year from now.

It will look like a great big mutual fund, to be managed by what, a big mutual fund manager? Sure, but somebody’s gotta do it! Can’t be left to some ignorant union hack, eh?

Here’s the CBC’s coverage:

‘The federal government unveiled details of a… voluntary savings vehicle(s) aimed at Canadians who don’t have access to conventional programs through their jobs.

Minister of State for Finance Ted Menzies said, “Canadians work hard to realize their retirement dreams, and PRPPs will offer them a new, low-cost and accessible pension option to help meet their goals.”

…PRPPs will essentially pool resources of employees and be managed by large financial institutions.

“By pooling resources,” Menzies said. “Canadians will be able to buy in bulk…mean(ing) lower prices.”

…Returns will be entirely based on investment returns that will be generated from the market — there are no top-ups from government or employers, nor are there any guarantees…In that way they will be “defined contribution” plans, not defined benefit (plans).’

CUPE says:

‘”This pool registered pension scheme is a great deal for banks and the finance industry, but does little to address the very real needs of Canadians not able to save for retirement,” CUPE national president Paul Moist said.

CUPE says more would be achieved by simply expanding the funding for the Canada Pension Plan. “All Canadians should have a right to a secure, decent income in retirement. Expanding CPP is the best way to achieve that for most Canadians.”‘

NO IT ISN’T…

A PRPP will give contributors full control over their financial futures, unlike CPP/OAS which are “defined benefits” mandated by government.

Socialist public sector unions like tyranny much better than freedom of movement which is why CUPE views ever-expanding “defined contribution” plans as much as Count Dracula likes the idea of sucking blood out of an empty corpse. They don’t!

Speaking of bloodsuckers, I expect brokerage firms might be a bit green about the gills too, since PRPP’s could cut in on their action! Suggestion: lower you’re commissions!

Have a Nice Day.

#172 Debt's Dark Embrace on 11.17.11 at 8:20 pm

#138 Vigilante on 11.17.11 at 5:12 pm
My Saturday Schedule in Edmonton

I try to schedule at-least 3 houses with my realtor. All in 500 to 700 thousand range.
I always make an offer with conditions. My offer is always around 75% of the asking price.
My realtor and the seller’s realtors always get pissed off. I am working with my 4th realtor right now LOL.
Sometimes the seller counter offers at around 90% to 95% of the asking price which I promptly reject and walk away.
I have no intention of buying.

Then you’re an idiot wasting everyone’s time. — Garth
………………………………………………………………………
But I love you. Sometimes you just have to go out and have some fun.

#173 Canadian Watchdog on 11.17.11 at 8:27 pm

#151 Cato

“It won;t be a US style collapse but it would be painful.”

Actually it could be worse considering that Canada benefited from America’s 700 billion stimulus package that is dried up now. Canada exported 300 billion of goods to the US in 2010, that is roughly 18.8% of GDP. Exports mainly consist of Oil trade and auto parts which are the most vulnerable during a contraction.

Another US stimulus package of that magnitude is highly unlikely considering all the political opposition in Washington. If Canada attempts to fill the output gap by issuing bonds in order to fund its own stimulus of that size; along with a CMHC bailout (it’s a given); Canada will be one step closer in joining the 100% debt-to-GDP insolvency party.

In any scenario, you know something big is happening when the Bank of Canada hires S&P’s David Beers as a special adviser, otherwise know as the man behind the US downgrade.

#174 Vigilante on 11.17.11 at 8:27 pm

Learn respect for others if you expect any yourself. — Garth

Yeah, right… If they command more than $700 K for a kennel, I don’t think they expect respect.
In this industry, money commands respect, nothing else.

So, don’t buy. But do not think your time is worth more than that of others. Such arrogance. — Garth

#175 Vigilante on 11.17.11 at 8:33 pm

Van guy waiting on 11.17.11 at 7:21 pm
#138 Vigilante

“I have no intention of buying”

If you have 3000 friends that would do the same, that could scare the sellers and start the correction ASAP.

——————————————-

Everybody should do this, if they have time. I am sure many bargain hunters do this. Even Garth does it , but not sure why he frowns upon it.

I’ve never made a frivolous offer. You should be ashamed you have. — Garth

#176 Herb on 11.17.11 at 8:53 pm

#148 Westernman,

the boat would be a bit more fun since the sickening motion would be missing in the shower.

#177 Dorothy on 11.17.11 at 8:55 pm

#121 – Scared

Whether or not real estate is at “nosebleed prices” depends on where you live. If you’re unfortunate enough to live in Vancouver then I agree buying is going to be a challenge (maybe you could consider living a little further afield and commuting).
However, if you live anywhere other than Toronto or Vancouver, recent market softening should make buying a home possible, provided you have a decent down payment and a steady income. In my area (North Okanagan) you can buy an older 3 bedroom in an older, but decent neighbourhood for around $275,000. Which is comparable to what I would have had to pay when I was young, once you take the difference in wages and prices into account. So if I could do it, you can do it.
I’m not saying its without sacrifice, but it’s all a matter of what you want out of life. If you want a house, you do without other stuff until you get what you want.
The type of house I describe is very basic; no granite or stainless steel. But they are nice family homes, with nice yards, and would be perfect for anyone just starting out.
The problem with many young people today is that they want the same home their parents have taken years to work their way up to. And that’s just not realistic.

#178 Daisy Mae on 11.17.11 at 9:06 pm

CATO: “I don’t mind helping little old ladies….”

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

Hey! Watch it! LOL

#179 Herb on 11.17.11 at 9:12 pm

#161 Canadian Watchman,

outstanding work! Looks like you’re keeping the watch that will end the night of obfuscation.

And the Canada chart even includes Batman’s head for Smoking Man! I’d bet that he is going to short mortgages in arrears.

#180 TurnerNation on 11.17.11 at 9:14 pm

Next leg down in the stock markets Gentlemen. See you in January when I will buy.

#181 The thing in the basement on 11.17.11 at 9:17 pm

154 Junius

$2K per lot? Please see this link.

http://www.jtc.sala.ubc.ca/bulletins/TB_issue_10_DCCs_edit.pdf

Also please reads triplenet’s reply @166.

Nice try though. I sure miss the original Junius (“OJ”?)

#182 Vigilante on 11.17.11 at 9:26 pm

So, don’t buy. But do not think your time is worth more than that of others. Such arrogance. — Garth

At current pricess, who said I am. In Edmonton most realtors are sitting idle anyway, why not get some exercise… LOL

#183 The thing in the basement on 11.17.11 at 9:28 pm

161 watchdog – Ha! Oops, sorry. Actually the Alberta arrear rate is comparable to 96-97

#184 AgAu on 11.17.11 at 9:36 pm

Prices tripled in 16 years, approx 7%/year growth.
Abnormal for RE based on histeric/historic standards?

#185 Smoking Man on 11.17.11 at 9:47 pm

#137 Currently backwards to history on 11.17.11 at 5:12 pm

I believe education as a system can be beat – let us know how you screwed the system in your competitiveness.
…………………………………………………………………………………..

I gamed the system, created a false ego, created a character that was not the oridiganl me, was a good actor in high school, eventuly I became my invention, it was easy………..

#186 Smoking Man on 11.17.11 at 9:53 pm

#179 Herb on 11.17.11 at 9:12 pm

That’s a beauty Batman head……….short the banks kids

#187 jess on 11.17.11 at 10:18 pm

tables for ontario

Isn’t that really a small % out of that many?

2011-08

period 2011 -08
out of 1,842,638 mortgages 5,435 people were in arrears 0.29%

canada
2011-08 out of 4,224,196
16,761 were in arrears 0.40%
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf

* Mortgage arrears is three or more months

#188 Van guy waiting on 11.17.11 at 10:22 pm

182 Vigilante on 11.17.11 at 9:26 pm

You’re wasting your time man. The market will take care of itself. You’re wasting gas driving around looking at listings.

#189 Naga on 11.17.11 at 10:36 pm

Garth – I want to share one of my observation of the occupy movement – perhaps a bit narrow.

Before I do – want to share my personal background – emigrated from Italy in my grade school years back in the sixties. Parents fell on hard times for health reasons – I persisted worked multiple jobs and got a university education. Continued to work hard with multiple jobs after graduating – yes gardening was part of the story – influenced by my nonno and still at it – and investing in RE – no regrets. Hate those want be italians that cant spell…

Now my observation – is it me or am I onto to something here? I have noticed that the demographics of the occupy movement are mostly white. I ask given the population demographics of the GTA or Van where are all the immigrants? (Asians, Polish – whatever) My possibly skewed conclusion – they are working multiple jobs or working hard at getting an education. The spoiled “born canadians – mostly white” with expectations that need to be reset together with housing prices and debt levels and not appreciative of opportunities and blessing of living in this country – they think that they are too good for available jobs because not paying big $ – BUT PREPARED TO COMPLAIN and some of them actually collecting welfare.

To support my observation been told that many jobs in US in knocking down boarded up houses in Cleveland and Detroit being payed by fed funds as part of make work programs are going to temporary workers from Dominican Republic….What the F–K is wrong with this picture?

Anyway – this is a time to refuel the kitty (saving is the new mantra – not loosing capital $ more important than try to make $ through risky investments – and be ready to move as opportunities present themselvs. Be prepared to wait it out though.

#190 John on 11.17.11 at 10:42 pm

I was just in China myself and heard no such thing. They are concerned about their own housing bubble.

#191 Canadian Watchdog on 11.17.11 at 11:33 pm

#187 jess

As I stated, CBA data may not contain MBSs and residential mortgages held by REITS, Credit Unions, ect.

Regardless, like a herd of sheep, even a small percentage in a leveraged market is enough to trigger the one-hundredth monkey effect. It’s the trend that matters.

#192 gman on 11.18.11 at 12:05 am

The reason “average house prices” are stable or increasing is because the only houses that are selling in the better locations of each locale, which typically have a higher price point to begin with. Devil’s Advocate how do you counter that. Median, shmedian = whatever. The houses in the better locations are skewing the average higher period. It’s smoke and mirrors bud. But even the “nice” houses are declining in price too. I am a sales person too but come on…. do you ever advise anybody to sell or is it always buy, buy, buy.

#193 The thing in the basement on 11.18.11 at 12:52 am

166 3net – Holy crap my link was 2001! (Thought it was 2010) Still a good paper for anybody who wants to understand DCCs better.

#194 shanks on 11.18.11 at 9:48 am

wow Vlad, Calente eh? that is serious (if it is true of course!)

re blue lobster, they found one in the maritimes a few months back, i remember the news said it was VERY rare. or at least they used to be! radiation? chemical pollutants? crude oil? who knows, who cares (if you’re a vegetarian).