What problem?

Irony’s a sumbitch sometimes. Like today. In BC.

Tons of people will hear their local house-pumping media tell them something incredible. There may be fewer than two million homes in the entire province, but together they’re not worth more than $1 trillion. That’s close to 7% more than last year, says the government agency which feeds this assessment frenzy. In Vancouver the values will be adjusted higher between 10% and 25%. Average houses on the east side (not so hot) which were $816,000 last year are now a million.

See this map, based on BC Assessment numbers? The blue parts of Vancouver have houses worth more than $1 million. The red parts are where the poor people live (average about $786,000). The smart people already sold.

Here’s the irony. This outrageous vignette of a region gone absurdly delusional – the one which will make tapped-out homeowners feel like horny millionaires this morning – is already out of date. It was based on valuations accurate to last October. And this is now. The crumble has started.

Average SFH prices in VanCity may top a million still, but the drop in the last 60 days has been precipitous – back to December, 2010 levels. Most of the decline has come because the top end of the market is disintegrating, with massive volume decreases. Sales on the uber-trendy west side basically ceased last month. In fact, sales there, along with Richmond and West Vancouver have plunged to levels not seen since the dark days of December, 2008, when we were all swapping squirrel recipes.

And as demand sinks, supply swells. There are 17% more properties for sale today than a year ago. Worse is the huge shadow inventory of delisted houses – places taken off the market by frustrated (and greedy) vendors because their greater fools did not arrive in the autumn. Once they list again it’s expected inventory levels will shatter records across the troubled metropolis. Says one insider: “When July hits, if we have been in a down market all year, that will be the point where it really gets worse and we could have the bloodbath accelerate through the end of the year.”

Blood on the streets. And not even a hockey riot.

And as I said here on NY Day, at the top of Canada’s crumbling real estate pyramid are condos. Even in Vancouver, where there are enough idiots to make anything erect, condo prices have flatlined for months. This means an entire pool of key buyers – first-timers who thought they’d be slithering up the property ladder by now – aren’t going anywhere. No magical equity has appeared (how unfair!), ergo, no money to throw at the next place. And, of course, incomes haven’t jumped either.

Of course, this isn’t just about Vancouver. Greg reminds us there are fools everywhere. From Calgary he writes:

To much displeasure from family members (I will get to that later) I have been following your blog for about a year now. We are 25, both native to Calgary. I gross $90,000 a year and my wife is a student in the education program graduating in 2013. When we got tired of renting from crappy landlords we started to look for a townhouse. We approached our fathers (who are both realtors) and my father-in-law agreed to help us find a house. We found a 1300 sq ft townhouse, in the burbs for $279,000. We purchased and moved in April 2010.

Our plan was to pay her father back for the $14,000 we ended up borrowing for the house in the first year my wife works, then start to look for a bigger house. Recent sales of units have slipped from the peak of $310,000 (2006 level) down to $255,000. We are not sure the best course of action at this point.

1) Take the 10% loss and buy a more expensive property, say at $375,000, which should have also taken the same drop. 2) Rent out our place, thus avoiding our losses (potentially), and buying our home to move into. 3) Stay in our place for another 5/6 years, when at such time we should have about 30% equity and can move up.

Selling and renting as you always suggest is not something we are willing to do as we do not have enough equity to justify it, we have very little other debt, we make good money, and we have time on our side. Unfortunately we were the horny 23 year old wanting a property, but what is done is done, we are doing okay, and just want to do a good job from here.

We will upgrade to a house eventually. I can almost hear you saying that staying put is the best bet however I have had very compelling arguments that losing 10% on $250,000 and getting a 10% reduction on a $400,000 is still a better deal in the long term. More room for upside growth.

See what I mean? These little cowboys bought for $279,000 twenty months ago and now live in a place worth $255,000 – or $242,000 after selling costs. That’s a loss of 13%. Hey, but wait. They used leverage, putting only 5% ($14,000) down (plus closing costs and mortgage insurance). That means they’ve lost 264% of their money.

And still horny.

The logic is classic: we can erase the loss on our dumbass purchase by buying a more expensive property that another numbnuts lost even more on. Of course, there’ll still be no equity, only debt. And absolutely nothing learned.

Read this blog, Greg. Print it. Then paste it to your FIL’s forehead.

We are so screwed.

 

160 comments ↓

#1 Josef on 01.03.12 at 10:14 pm

FIRST!!! Oh YEAH BABY!!!!!

#2 Josef on 01.03.12 at 10:15 pm

Second!!! Oh YEAH keep it coming!!!!!

#3 bridgepigeon on 01.03.12 at 10:21 pm

rEVOLution has begun…

#4 T.O. Bubble Boy on 01.03.12 at 10:21 pm

So, is this the same “Calgary math” that Harper uses when discussing economics with F?

“If we just keep spend more on things that don’t make money (like jails and fighter planes), the country will make money!”

#5 Romeo Jordan on 01.03.12 at 10:25 pm

You nailed it Garth.

Vancouver is starting to stink like a salmon left in the hot sun (not that we have anything other than incessant grey/rainy days here, for weeks and weeks and weeks on end…).

Junius, I’m glad you bought in the fall, you are a typical contrarian market, you greatest fool.

Garth, Vancouver avg SFH price is down 13% from peak. Sure, some of this is noise (ie. sales mix), but prices are crumbling (Victoria is getting hammered). I could actually conceive of a 20% decline THIS YEAR. As delusional as that might sound to some.

#6 vatoDETH on 01.03.12 at 10:26 pm

“They used leverage, putting only 5% ($14,000) down (plus closing costs and mortgage insurance)”, which was borrowed from their parents and has not been paid back. Essentially they put nothing down, despite a single income of $90k/year.

#7 HouseBuster on 01.03.12 at 10:31 pm

Wait until it hits all those cardboard cutouts in Milton.

It’s not going to be pretty.

#8 BL on 01.03.12 at 10:32 pm

Any thoughts on the London Ontario market? Prices haven’t sky-rocketed or decreased over the past few years. It’s been steady. Is this market open to the volatility we will be seeing soon?

#9 Fool in the GTA on 01.03.12 at 10:33 pm

Ok, so your Greater Vancouver home’s value jumps. Fantastic! But your taxes are now higher. Luckily interest rates remain low (for now), so your monthly is ok. But your new development is a little bit older now; maintenance costs rise a tad, but it’s still ok. Home prices are flattening: say goodbye to any dreams of 20% price appreciation.

What does this do to your shopping habits? May taper a little. Stores have reduced sales. Their base rent to Rio Can remains the same (stores aren’t in trouble that much). CAM and utilities are still paid. But percentage rent suffers. Wouldn’t a Rio Can’s income be hit a little?

Wouldn’t it make sense to wait a year before plunging into retail REITs? Same for commercial REITs? I know Garth does not preach market timing, but he does preach a diversified portfolio. Is that why he still recommends REITS, even if they say drop 10-20% in the next year? I know some other posters had this type of Q too.

#10 Stinky the Fish on 01.03.12 at 10:34 pm

Michael Bublé! – highlight the word ‘Bublé’ Garth, thanks

#11 LJ on 01.03.12 at 10:34 pm

“We are so screwed.” – And that’s putting it politely.

Greg, of course, has not actually been reading this blog, but instead just wants some advice on how to jump from the pot directly into the fire.

Go for it!!! There are a lot of nice $1.2 million properties on the market in Calgary and you can probably get some lender to pony up the funds for you – how about those parents again.

First, look for a bigger house to get yourself into, then consider taking the current loss. (sarcasm off)

#12 Mr. Lee on 01.03.12 at 10:38 pm

Greg must be suffering from, “Calgary Disease” a term that I heard of many years ago. With Calgary disease one’s symptoms consist of delusions of personal finances, belief that the next high paying job in the patch is a phone call away, and that you are recession proof.

The only cure for this disease appears to be a market correction or recession, but like malaria, this is only temporary as the disease always comes back to the one that is infected.

#13 Fool in the GTA on 01.03.12 at 10:41 pm

Do people look at the Teranet home price index? They have separate indices for Victoria and Vancouver. They shows peaks in the Aug/ Sept time frame but no major drops. How come these indices do not reflect the anecdotal evidence I hear?

#14 Stinky the Fish on 01.03.12 at 10:43 pm

“Read this blog, Greg. Print it. Then paste it to your FIL’s forehead.”

This line should be replaced wtih “carbon copy that, and send your crew a fax, mothaf-cka”

Love your writing Garth, that’s why I’m here.

#15 This is Wonderland on 01.03.12 at 10:50 pm

Sorry link didn’t show up on my last post, as I was saying….

This house sold a couple of months ago for around 600 thousand it’s located in a quite single family residential subdivision, today it’s being rented out as a boarding house. It would be interesting to see how many homes in Oakville are being converted for multiple rentals like this one. Can anyone tell me if this is even legal?

http://oakville.rentershotline.ca/rent/house/forRent/6598/

#16 Boombust on 01.03.12 at 10:50 pm

Golly jeepers!

I just received 29 new listings for SFH/Townhouses alone here in the Tri-Cities/Burnaby/New West area this past hour or so.

#17 Snowboid on 01.03.12 at 10:52 pm

What do you expect coming from the RE gene pool, they will lose money hand over foot and still not get it.

I could say something nasty, but I’m in a good mood – my favorite diversion starts in two weeks. I may even register as a bidder this year – but not go overboard.

Maybe the Prof. would like me to bid on the best of both worlds – a vintage H/D called ‘Big Hummer’

http://tinyurl.com/6q6yvjv

#18 Alan on 01.03.12 at 10:55 pm

One little detail you forgot to mention is that Vancouver Condo’s came in 4% higher in price in December than the previous month and that stat was taken from the same chart you borrowed your stat on Vancouver houses declining to 2009 levels. Maybe a good idea to put all the info in your rants for 2012 instead of cherry picking what you want to suit your tirade.

One month (with Christmas in it) means little. — Garth

#19 Devore on 01.03.12 at 10:56 pm

Average houses on the east side (not so hot) which were $816,000 last year are now a million.

Au contraire, my bearded friend. East Side has been decidedly hot this year. It is the only region to see sales increases this year. Vancouver market has been characterized by a “moving hotspot”: North Van, Vancouver West, Richmond, and now Vancouver East.

It is this decline in sales in the formerly hot regions which has finally brought us declining price averages, just as it has been levitating the average for years. In hindsight, wise (and also bearded, coincidence?) economists will tell us the market top was early 2011.

‘Not so hot’ from an esoteric point of view. — Garth

#20 Alan on 01.03.12 at 10:57 pm

Correction 2010 prices…
http://www.yattermatters.com/2012/01/vancouvers-average-home-price-freezes/

#21 Smoking Man on 01.03.12 at 10:59 pm

We are so screwed.

Gartho since when have you become a doomer…

Watching CNN a vet is on tv supporting paul says tired of war…..he is cut off………………………

47 million on food stamps……. 50 million on the povrty line. Us Military from two levels down from the top 80% ron paul fans………

Corpoarations sitting on hords of cash asking workers to take pay cuts…….

Screwed. that word will be re defind shortly…..

Can foods, amo, a biblel and shot gun. Parise the lord

#22 Jimbo on 01.03.12 at 11:07 pm

Garth, love the articles. Keep them coming.
Do you think you could write an article about the Regina housing market sometime. The markets getting rather ridiculous here.

#23 Garth, what gives? on 01.03.12 at 11:08 pm

Garth,

On the one hand, you seem to say that government is part of the problem, feeding the real estate “frenzy”; however, on the other hand, you are emphatic that government is going to help solve the problem, by strengthening borrowing regulations, raising interest rates etc..

What gives?

#24 Al on 01.03.12 at 11:08 pm

Here in Calgary, my first landlord, a nice young guy, insisted his condo would be going up $20grand a year for the next ten years. Yeah, like why work or save money? I moved to a luxury rental cheaper and closer to work. The bubble is bursting even with oil at these prices.

#25 Devore on 01.03.12 at 11:21 pm

But not to worry, January listings so far are way higher than normal. Sales, not so much. All the buyers must be still hung over from New Year’s.

#26 Cristian on 01.03.12 at 11:23 pm

I thought there were no bigger idiots than Josef-“First!!!”.
But then comes Greg…
Why in the world buy a small house just to sell it and buy a bigger one one year later?… Why not buy the god-damn house you want, as big as you want, from the beginning?
Why pay all those commissions and fees again and again and again?…
This is like day-trading in stocks.

#27 Mean Gene on 01.03.12 at 11:27 pm

Damned if you do and damned if you don’t, any way, everyone needs shelter, so as much as it REALLY sucks… stay put.

#28 Not 1st on 01.03.12 at 11:29 pm

Parts of cowtown have been unraveling since July. Condos on the outskirts used to be $250k and can now be gotten for half that. Nice SFH with 2000+ sq ft, walkout and maybe 10-15 years old are in that 400-550k range. These used to be 700k. I think Garth is right, now giving any numbers but 12 months hence prices will be lower than they are now.

#29 Devore on 01.03.12 at 11:29 pm

Townhouses keep finding themselves in no man’s land. Always underperforming SFH and condos. They inherit none of the benefits of a house, and all the downsides of a condo. To boot, there is a low supply of them, so they are difficult to sell, and pricing can be tricky.

Whew, this Tylenol is drowsy, damn kids and their flu bugs. I better lay down.

#30 April on 01.03.12 at 11:42 pm

Alan #18

4%? and the source? So a few high end condos sold and brought the numbers up on paper.

#31 Chaddywack on 01.03.12 at 11:48 pm

The worst part about this though is that people around here are going to think that their houses are worth these new higher values and they’ll list accordingly……(higher than assessment of course) and likely refuse to take any offer not in the ballpark.

#32 Bottoms_Up on 01.03.12 at 11:48 pm

Wait…there could be a hockey riot, Team Canada is losing to Russia 5-1 going into the 3rd…

#33 45north on 01.03.12 at 11:53 pm

Average SFH prices in VanCity may top a million still, but the drop in the last 60 days has been precipitous

yeah I noticed that and was going to go at Devil’s Advocate but I don’t really know BC (Kelowna). But what about Best Place On Earth? Buy the dips? Okay BPOE you must have family, you could co-sign?

Greg, somebody is paying you $90,000 a year. Why not work on your career? My brother-in-law was a landlord but he had a lot of extra time to fix toilets, windows, run electrical lines. My sister is a landlord, I can definitely say she’s not enjoying it. Oh and I too once was a landlord. Greg you’re a young guy, I think you really need to know what it’s like to get kicked around a little. I would definitely recommend kick-boxing. You think I’m joking. You are way better off getting kicked around in a gym than being kicked around by a bad tenant.

#34 DM in C on 01.03.12 at 11:55 pm

Denial should have been the name for the river coursing through Calgary.

Whiplash and smug comments brought to you respectively from the Calgary Herald RE articles and the comment sections;

http://www.calgaryherald.com/news/calgary/Calgary+residential+property+values/5940240/story.html

#35 VMD on 01.03.12 at 11:57 pm

Hi Garth, BC Assessment valuations seem to be based on July values. In July 2011, Vancouver just hit all-time peak of housing price.

“July 1 — Valuation Date
The date actual (market) value of properties is determined for the purpose of assessment rolls.”

http://www.bcassessment.ca/public/Fact%20Sheets/BC%20Assessment%20-%20Key%20Dates.aspx

#36 Guy_in_Regina on 01.03.12 at 11:58 pm

$279 for a 1300 sq ft. townhouse in Calgary ain’t bad. Not bad at all.

Stay put Greg.

#37 disciple on 01.03.12 at 11:59 pm

The investment and retail banks in N.A. have already been nationalized, we just don’t realize it yet. But our leaders understand it very well, and are doing their very best to hide it from you. If we knew how dependent we are on banks doing well in this country, we would demand a much bigger piece of the pie. It isn’t the non-financial corporations, it’s the banks that should be targeted by the 99%. Every single Canadian should be given their rightful share of bank profits immediately. This would solve innumerable problems all at once.

But instead, we just let them get away with theft… thanks for nothing, Ottawa. Young people, what will you do? I estimate there are thousands of you out there reading these words… I say: There are various possible methods of wealth re-distribution, once you identify the problem. The victory of reason is inevitable in all circumstances involving the human mind. But there are non-humans among us, which explains many things, doesn’t it? Therefore, I remain optimistic about the road ahead. As long as we humans do not lose our minds.

#38 Tri-State Pat on 01.04.12 at 12:06 am

No salary growth here…

…..

Caterpillar bars workers from the Electro-Motive plant in Canada
Caterpillar Electro-Motive unit locked out more than 400 union workers in Canada, indicating a stronger stance over the dispute over labor-cost cutting program. Caterpillar said employees represented by the Canadian Auto Workers union (CAW) would be barred from its Electro-Motive Canada plant in London, Ontario, until “a ratified contract is in place” for the workers. Contract talks had collapsed in the last week of 2011 after Electro-Motive issued a final offer that would cut the wages of union members in half, eliminate pensions and reduce other benefits. The previous contract for about 420 CAW members expired at the end of 2011. “It’s not really a proposal, it’s an ultimatum,” said Tim Carrie, president of the union local that represents the factory’s workers. “This is an attack on middle-class jobs.” Some of the union’s executive members have suggested that Caterpillar’s contract demands were intended to provoke a shutdown of the Canadian factory as a prelude to moving all production to the United States. Caterpillar’s Electro-Motive Canada plant was acquired in 2010 from a private firm and competes with General Electric Co and Bombardier Inc. Caterpillar has a long history of tough labor negotiations and bitter labor disputes. [New York Times, 2 January 2012]

#39 dd on 01.04.12 at 12:08 am

#12Mr. Lee on 01.03.12 at 10:38 pm
….“Calgary Disease” recession proof.

Mr Lee, the housing market is totally over sold. However Calgary has bounced back very nicely from the hole of 2009.

#40 chubster on 01.04.12 at 12:28 am

i was in vcr over the break and toured the west side by road bike. there is a lot of new construction. a local i consulted estimates at least half of it is spec. typically about $1.5M teardown + $1M – $1.5M rebuild for >$3M ask sell. you can sort of tell from the styling who the target market is – i.e. if it is asian offshore. that bid appears to have gone completely cold. it will be interesting to see what happens to all of this new construction in the spring.

#41 Loan money to anyone on 01.04.12 at 12:28 am

Only 25 years old and already grossing $90K a year! And you’re already living right in the big city. No need to tough it out for a few years in the sticks in order to gain some work experience first. Please tell us the secret of your success, Greg.

#42 Bottoms_Up on 01.04.12 at 12:36 am

What Greg fails to realize is that he is assuming the market has bottomed and only has up potential. If he buys that ‘move-up’ house, what’s to say that house wouldn’t fall in value either? Then, he’d own two places that would be losing money, and he’d be losing more money on the ‘move-up’ house.

Good luck with that.

#43 Stevenson on 01.04.12 at 12:38 am

Remember how “this will not end well?”. Well 10-15% is not anywhere near not well especially for properties bought ever since the beginning of this warning.

Vancity and Gta can correct all you want but unless we hit 2008 prices. The none cheap and less foolish people are still going to be better off.

#44 Bottoms_Up on 01.04.12 at 12:38 am

#23 Garth, what gives? on 01.03.12 at 11:08 pm
————————————————
What gives is that that’s the truth. One arm of the government has ensured people without money have access to money, while another arm is changing the mortgage qualification rules. What’s so hard to understand about that?

#45 Min in Mission on 01.04.12 at 12:41 am

Never did get rid of the squirrel recipes.

I am good where we are for the next ten years. Hopefully things will Have recovered a bit by then!!

But, I have a hard time generating sympathy for the “greater/lesser fools” that jumped on the “leverage” bandwagon.

#46 Chris L. on 01.04.12 at 12:43 am

Wow.

#47 NotAGreaterFool on 01.04.12 at 12:43 am

I know Garth has stated it is possible the federal budget reveals 25 year ammortizations. I am of the opinion, while this will be good (for renters looking to get in), a better move might be to require home buyers to put down a 10-15% down payment. No more 7% down for 1st time buyers. Any thoughts on this?

#48 Dear Garth on 01.04.12 at 12:49 am

My wife left me because I won’t buy a house in Vancouver.

That chick in the pink bikini from yesterday’s picture, do you have her phone number?

Please and thank you.

#49 BPOE on 01.04.12 at 1:04 am

That map is a picture of beauty and work of art. It is a testament to everything I have posted. Unrefuttable proof that BPOE is a triumphant success. The fact that naysayers like The American and Junius spew their rubbage is sickening. The map tells the fact and i love it

#50 BPOE on 01.04.12 at 1:07 am

Nothing outrageous about this at all. It’s called supply and demand. There is no crumble just HST issues. How one can look at that map and say renting is the way to go the past decade makes no sense whatsoever.

This outrageous vignette of a region gone absurdly delusional – the one which will make tapped-out homeowners feel like horny millionaires this morning – is already out of date. It was based on valuations accurate to last October. And this is now. The crumble has started.

#51 Garth, what gives? on 01.04.12 at 1:15 am

#44 Bottoms_Up

Alot.

#52 Easternman on 01.04.12 at 1:16 am

hello Westernman, where are you?

Bueller? Anyone?

#53 eagle eyes on 01.04.12 at 1:23 am

Wow – 59 new listings in Richmond BC today. I heard that a lot of people from China are still lining up to come to Canada. Hope they can absorb all this inventory.

#54 Jon B on 01.04.12 at 1:26 am

The vast majority of Generation Y – which seems to fit the description of this guy we are roasting – will work until the day they die. Retirement will only be a theoretical concept that was common among many in previous generations. General financial stupidity like buying a house with nothing down while pissing away a $90K annual income without producing any savings will be the reason for this change.

#55 Nostradamus Le Mad Vlad on 01.04.12 at 1:28 am


“What problem? Blood on the streets. And still horny. Here’s the irony. The crumble has started (is that squirrel, rhubarb or apple crumble?). Then paste it to your FIL’s forehead (but not while he’s driving). And not even a hockey riot.”

No problem. Everything’s A-OK and riots are fun! Keep on truckin’, spaceman!

“Canada’s crumbling real estate pyramid are condos.” — Approaching the time for a mega-‘quake down the Left Coast?
*
#21 Smoking Man — “Watching CNN a vet is on tv supporting paul says tired of war…..he is cut off………………………”

m$m — unfair and imbalanced reporting. Don’t listen to us! We never tell the truth anyway, suckers!

#24 Al — “The bubble is bursting even with oil at these prices.” — Be interesting to see what the outcome is if Iran shuts the Straits of Hormuz down. Oil may go ballistic, as the western countries would be hurt most.
*
China adds Zimbabwe; VAT on food The EU, banxters, IMF etc. are using all means and methods to screw the former middle class even further; Seven Diamonds in the rough; Hungary trying to muzzle the central bank; Ego-Vanity Didn’t get a good bonus? Sue your boss; Eurasian Union Based on trade, not politics; Dividends Galore Plenty of consecutive ones; Spending binge followed by spending diet.

Shakespearian Economics incl. pornbrokers, and Goat Herding; Collateral Crunch gets monetary; Large number “. . . world’s leading economies have more than $7,600,000,000,000 of debt maturing this year, with most facing a rise in borrowing costs.”; USS Gerald R. Ford US$11.5 bln., give or take; Major Slowdown coming in global trade (due to war and rumors of war), and speaking of World Trade and war issues; Betting on Nothing; Demand Inflation Now!
*
David Cameron must be doing something right. There’s a whole lotta political rats gnawing at his feet, yet his popularity has climbed since he vetoed the EZ; Lost Luggage (gold bars) left on a train; Hover Cop Car New invention / design; Top Ten Reasons to ignore Iowa, and Updates Refresh periodically; 17:24 clip The UN is using Agenda 21 to creep into NAmerican society; Preps for 2012;

Japan’s population, like their economy, is sinking outta sight; Cross-Dressing Hybrid Shark Don’t ask; Wacky Weapons; Ron Paul finishes third (expected), but first in ideas and influence; Rupert Murdoch’s NWO; Pakistan – US relations Doing the over-under.

#56 Hoof- Hearted on 01.04.12 at 1:28 am

Housing assessments rise 16.5 per cent in Richmond

http://www.richmondreview.com/news/136628163.html

It’s two storeys, 36 years old with a design similar to countless others of the same era. But even at $1,298,000, this house is sought after by buyers because of its Broadmoor neighbourhood—one of the city’s hotbeds for residential real estate.

According to 2012 BC Assessment figures released Tuesday, single-family homes rose 22 per cent on average in this area, sandwiched between Gilbert and No. 4 roads.

“There’s so few to buy in this area, your selection is very limited. People have already bought and they’re staying here, so it’s a good buy,” said realtor Bill deMooy, who is selling the home with Macdonald Realty Westmar colleague Annie Zhang.

Across Richmond, the average residential property assessment rose 16.5 per cent, according to data from the 2012 assessment roll.

#57 Devore on 01.04.12 at 1:35 am

#13 Fool in the GTA

The data and methodology Teranet use means they are a couple of months behind.

#58 Coho on 01.04.12 at 1:36 am

At one time I thought like you, Greg. Planning my whole life…3 years of this, 5 years of that…in 20 years I’ll have dah dah dah. But, life has a way of throwing you curve balls. Yes, it is wise to plan for tomorrow, but do not lose sight of the important things in life. Of course, one cannot really think like a middle aged person until he or she gets there, but you’ll find out along the way that we control much less than we think we do or care to admit.

Everyone needs to walk their own path and learn along the way. Each path is unique to that individual. Never mind so much about accumulating “worldly” knowledge because much of it is theories based on false assumptions which is taken as truth. The world is a much different place than what we perceive it to be. The important thing is to learn about yourself…to get to know yourself and what your heart of hearts is telling you. Shut out the external noise from friends, experts and in-laws and be your own guide. It’s not a one size fits all. What is important to a friend or a relative may not be as important to you. Some people are money hungry and very materialistic and ego driven. If you are not that way, then emulating them and trying to meet their expectations when your heart really isn’t in it will make you miserable. And remember that you and your wife need to be on the same page or there’ll be trouble down the road.

As is so often preached on this blog, don’t put all your eggs in one basket, and that should include being consumed by pursuit of money, money, more money and more square footage because it’ll never be enough. The shrinking middle class never seems to have enough money. They go backwards each month trying to maintain a middle class lifestyle. Neither do the poor as they struggle to survive. Nor do the rich, which take a bigger piece of the wealth pie every year as the gap between the fewer “haves” and the ever increasing numbers of “have-nots” widens.

Nurture your marriage and your family when the children come and not your ego. You’ll be a much happier and fulfilled person.

#59 TheRealTruth on 01.04.12 at 1:38 am

Doom is coming as Garth puts it. Then will turn around and say only a 15% decline. Go figure?!

Junius: congrats on your house purchase! There are no immigrants coming to Vancouver!! Population growth is negligible! Hahaha…Lawyers I tell you… Let me guess : <30% of net worth.

#60 Devore on 01.04.12 at 1:40 am

#47 NotAGreaterFool

Nothing would kill the all important first time buyer market (which hold up the real estate pyramid) than higher downpayments. So many beg borrow and steal their 5% to make that first purchase. That’s why downpayments were not raised the last couple of times. Who knows, maybe they never will be, 10% is ultimately likely.

I would look for shorter amortization, or maybe tightening on lending rules (credit scores, DSR, etc) and greater rigor on the source of that 5%, pretty much same as last time.

#61 Onemorething on 01.04.12 at 1:43 am

I dont see our Aussie contributor here the last few days so I will report. Brisbane (Queesnland Market) is a mess. My Bro In Law has a double plot property is a nicely renovated traditional Queenslander.

Location in upscale area (Bulimba) Peak it was easy to get AUD 1.7M about 12-18 months ago but now asking for these props now AUD 1.5 obo. He says his top agent cant move properties in this range at this price anyhow. Suggests a drop in price to AUD 1.3M.

I suggested he sell, rent for a few years and re-enter!

He’s listening!

Gold Coast property values down starting in the overly invested condo market. Sunshine Coast(my favourite) holding but big increase in listings of high end beach properties. These properties never come up!

They range 1.5M-2.5M! They were only half that 5-7 years ago. They are going back there!

Aussie market will dump pre-Canadian Market!

#62 John Prine on 01.04.12 at 1:44 am

6 new listings in Qualicum on PCS today after a few quiet weeks, will be interesting to see how many want to list “early” this spring. Some nice ones in the high 3’s…..

#63 Villager on 01.04.12 at 1:46 am

The 2012 assessment for the apartment I rent in the olympic village is 20% lower than last year (485k compared to 605k last year). Not everything is up Yoy in Vancouver.

#64 Pinky on 01.04.12 at 2:13 am

You could have just asked her for her number since you were standing right behind her :)

#65 Marie on 01.04.12 at 2:14 am

Can you explain to me Garth how it is possible that there were 245,155 properties for sale in Canada on October 19, 2011 when I checked http://www.realtor.ca, and there are now 175,101 properties for sale on the mls site. How could there be a drop of 70,054 properties in such a short time when for at least five years the number of homes for sale was consistently well over the 200,000 mark?

#66 Pr on 01.04.12 at 2:14 am

This is a great remark from BEN at: the economicanalyst
CMHC’s board of governors made of housing industry representatives

Kudos to Fishy’s real estate blog for discussing CMHC’s board of governors and highlighting the glaring representation of the real estate lobby on this board: The 10-person board contains 3 developers, 1 CMHC paid employee, 1 real estate broker, and 1 partner in a plumbing/renovation company. From the Fish’s mouth:

A rather small board considering the Hundreds of Billions which are at stake. …Iam sure they are well meaning people. However I am not reassured. Neither it would seem is the IMF which has called for more supervision.

Where are the well-known Business and Economic Professors from U of T or McGill? Where is the seasoned insurance executive who has dealt with major losses? Where is the representative from the Canadian Tax Payers Association? WHERE is the significant representation of NON-housing interests?

Great questions

#67 ASM on 01.04.12 at 2:57 am

#48: The girl is Russian. That’s all I’ve got.

I am shocked how fast some people live. Slow down a bit. You are 25 y.o., make 90K a year, have another income on a way. Stay put, invest your wife’s income, wait for RE prices to come down completely and that make your move.

You have something most of us don’t have – TIME. Use it wisely.

#68 The Dividend Yield Investor on 01.04.12 at 2:58 am

Circular Payment Inflammatory Disease (C.P.I.D.) is on the rise!

Don’t you become a victim! Always use protection when handling debt based products! They can be hazardous to your financial health!

When I’ve had conversations with young and sometimes not so young couples about personal finance and their use of debt; their response is “The payment is so low” and I respond “What is the total debt?”

Then they respond “But the payment is low!” Then I ask “What will this large debt do to your net worth?”

And they respond “But the payment is sooo low!

And then I want to respond again, but it is too late!
The circular logic has inflamed the brain and the house horny couple is now running on total C.P.I.D.! First the house, then new furniture, ultra wide screen T.V.’s. Yes, multiple T.V.’s especially in the marbled bathrooms, electronically inter-connected to all of the rooms playing different episodes of HGTV.

Compulsive viewing of HGTV has been linked as a pre-condition to C.P.I.D. However, the real estate and their loyal banking lobby, has a study that refutes this claim. Later it was found that the RE and banking lobby paid for the clinical trials. When asked if there could be a conflict of interest, the RE and Bankers lobby responded with this quote, “We have an arms length approach to this study, creating the most highest ethical, moral, and legal environment that has embodied our two industries.”

It has been rumored that a recovering C.P.I.D. victim was present during the press conference. Many onlookers thought that the C.P.I.D. victim[recovering] simply had a common cough. But sources have revealed to this writer, that when he went to cover his mouth with his hand [I have two witness’] that he used a two letter word “B.S.” to express his distain.

The pathogens of C.P.I.D. has infected Europe and all 50 States of America plus Washington DC! This public health menace knows no borders and has traveled north to Canada to its major cities. It appears that C.P.I.D. has rooted into the political system of Ottawa, including many M.P.’s and possibly the Prime Minister!

Unfortunately the infection rate is highest in Vancouver BC where the only cure will be a 50% drop in residential and possibly as high as 70% decline in condos to FULLY BURN OUT THIS DISEASE! Miami, Las Vegas, San Diego are the American examples.

The best cure is always prevention. If you are a young couple the standard preventative protocol is first accept that you could be affected [YES YOU!] and that HGTV acts as a gateway drug changing the neuro-transmitters allowing a breeding ground for C.P.I.D. No HGTV period, not even a casual glance while channel surfing especially in Vancouver where the affected rate is at biblical proportions.

The second is rent; home is where heart is not the overvalued house that belongs to the bank for the next 25 years. Stay away from Credit Cards [another cause of C.P.I.D.] and then move your stash of cash into the only know vaccine protocol of high quality income producing securities.

If you are the older crowd sell your house or condo yesterday! Then vaccinate yourself with a heavy dose of high quality income producing securities. Since this is the same prescription as the young people it will even improve your night life when that moment is right with the Mrs.!!

One word off caution to those who have sold their house or condo at a gargantuan profit and are living from their income producing securities like the Roman emperors of antiquity.

STAY HUMBLE!!! You could suffer from I.S.D.S.M.B.H.N.S. THERE IS NO CURE for , I’m so damn smart my bathroom habits NEVER stink!

SAVE YOURSELF and YOUR FAMILY!!

Don’t end up in the financial hospital [foreclosure, bankrupt, or possibly divorced] as many Americans have experienced.

We need to stamp out Circular Payment Inflammatory Disease TODAY!!!

The Dividend Yield Investor
Atlanta Georgia

DISCLAIMER:
Always wear protection when engaging debt based products.

#69 Alan on 01.04.12 at 3:04 am

April #30 I posted my source in the next post after my first post. Vancouver condos for December registered a 4 percent increase in price over the previous month. There are no doubt sales that may have been lower in price but for the right location and quality of building, the buyers are still here. FWIW, no one is lining up around the block to buy either. Crappy real estate only sells in overheated markets.

#70 DML on 01.04.12 at 3:13 am

This article on the collapse of the San Francisco Bay area
economy is a good template for what’s coming to Vancouver.

http://www.mercurynews.com/top-stories/ci_19656382?source=patrick.net#http://www.mercurynews.com/top-stories/ci_19656382?source=patrick.net#articleTitle

#71 Jonny on 01.04.12 at 5:11 am

#48 Dear Garth
Yes… I have her number, that’s me behind her!

#72 VanLarry on 01.04.12 at 5:32 am

Note that big blue blob on the south east side of the map. I’m guessing it’s left of the Fraserview golf course. It’s hard to tell from the map.

Traditionally, if I’m correct, that’s a blue collar neighborhood. Lots of Vancouver Specials in that area. I’m not sure if the houses of that area are really worth over a million dollars.

We’re definitely screwed.

#73 Where's The Money Guido??? on 01.04.12 at 5:51 am

Re: Everyone who’s wondering if they should pay off their mortgage or refinance and buy investments to get to Garth’s 30% ownership in real estate.
Well, that wouldn’t have worked with me.
I bought and took less than 10 years to pay off my mortgage with all my extra income going to pay down the mortgage.
What happens soon (2 years) after I pay off the mortgage, I get sick and cannot work. If I didn’t have that mortgage paid off, i would have had to sell the place in the late 90’s when the property was worth the least.
So I was able to ride out the storm, kept my property, sold in 2007, bought into a better property and now my % in real estate is only 60%, but I haven’t had a mortgage payment since 1998 and still don’t. And my % in real estate continues to go down (even though I never returned to full time work because of illness).

#74 tkid on 01.04.12 at 6:59 am

Greg, there is NOTHING wrong with the townhouse. It’s not a take-a-fifty-percent-hit-in-value condo. It’s not a how-the-hell-do-I-pay-the-mortgage-off-when-we’ve-lost-one-job house. If you can’t bear to sell and rent, then stay and pay the father in law back his $14000.

But selling and renting is your best bet. But you already know this.

#75 Steven Rowlandson on 01.04.12 at 7:28 am

The financial screwing of the banks, realtors and the fools that bought hyper inflated real estate has barely even started. Garth what you are speaking of is the first warning signs of economic death and hell that will traumatise much of the world for a very long time and make talking about real estate as an investment and real estate values in a positive light a taboo subject in polite company.

#76 SB aka Mr. B. on 01.04.12 at 7:33 am

Just read ” what problem” and the 48 comments so far. Still got to get liquid. I Like the SFH map. When I’m visiting the tight quarters of the new Milton housing that is what I see, cardboard cutouts. Referring to comment. #7.

#77 Where's The Money Guido??? on 01.04.12 at 7:35 am

Merry Xmas and a happy New Year to everyone except the grinches in gov’t.
Had the pleasure of receiving my Terasen Gas and BC Hydro bills in the mail recently and guess what, a BIG raise in their shoving their hands in my pocket.
Carbon Tax on my Terasen bill went up by 25% from about .99 per gigajoule to 1.25 per gigajoule and right in time for December, thanks a lot Terasen.
BC Hydro didn’t get the 50% raise they wanted from the BCUC, so what do they do, they lower the 1st tier usage so you end up in the more expensive second tier much sooner. My bill shows my first tier went down from 1442 Kilowatt hours of usage to 1270 Kilowatt hours of usage before I go to the second tier. And they are doing this every year.
What thieves these BC Lieberal cons are stooping to bolster their deficit spending. Merry XMAS my ass and what’s so good about this for families first. Crusty Cluck and those lyin’, thievin’ BC Lieberals should be spending time in jail for the underhandedness.

And I just found out that the carbon tax on Natural Gas is going up another 25 cents per gigajoule this July. It has risen 25 cents per gigajoule a year since 2008 (from 42 cents to 1.42 cents per gigajoule). And those bastards have the gall to want another raise in rates???? Honey get me my gun, it’s time fer some huntin’…..and sum hangin’……
You can get the info on the BC Carbon Tax that was posted before here:
http://www.bcenergyblog.com/uploads/file/British_Columbia_Carbon_Tax.pdf

#78 househornyhousewife on 01.04.12 at 8:22 am

Hey Greg !

Live in the damned house you just bought, pay it off in full and for heaven’s sake, stop reading this blog and feeling like you need to do anything more !

Did you buy your house to live in or to invest ? Pay off the house and then at least you will actually own something worth something, even if it is less than what you paid (by the time you pay it all off, who the hell knows what it will be worth ?). At the moment it is a place to live in, that’s it that’s all.

You bought so that you don’t have to deal with a landlord, right ? So now you don’t. Enjoy yourself in your new house and move on to something else, like doing some good retirement planning ’cause brother are you ever gonna need that by the time you hit YOUR sixties. You are right when you say that time is on your side and this goes for investing as well. Forget trying to invest in real estate for heaven’s sake.

$90,000.00 and you are only 25 years old ?! Count yourself lucky and don’t indenture yourself to the bank by taking out another mortgage. Pay off what you owe asap and start saving a bit … but don’t forget to stop and smell the roses on the way.

When you own that townhouse and you have some retirement funds put aside … and you are more mature with different priorities and perhaps a different vision, then you can come back to the real estate thing and decide then what you want to do. You will be in a stronger position to do so.

Good Luck to you !

HHHW

#79 Hicksville Alberta on 01.04.12 at 8:26 am

Ireland house prices now back to 2000 price levels

http://www.guardian.co.uk/business/2012/jan/03/ireland-house-prices-2000-levels

Some great posters comments to the article and since there was a big move up in house prices there starting in the earlier 1990’s i would bet they still have a long way to fall.

#80 Smoking Man on 01.04.12 at 8:37 am

http://guava.ca/indicators.html

Dec stats

Price up in GTA, days on market down. Big spike in new listings in Dec. remeber all the gloom in media. Last month.

#81 Crash Callaway on 01.04.12 at 8:42 am

Calgary Realtor offspring:
“and den when da wife starts to werk we’ll buy a more expensive place”

An den we’ll get dad to pay her student loans!

Realtors should be spayed.

#82 House on 01.04.12 at 9:04 am

They pay $90,000 a year to a guy with a grade TWO education in Calgary. No wonder everyone is moving there.

#83 The American on 01.04.12 at 9:36 am

This is hilarious. This map is a heat map showing TAXABLE values, based on assessments from LAST OCTOBER. WEll, as Garth pointed out, the crumble in BC has already begun. This means Vancouverites are going to get hurt in their property tax bills as they are paying more than their properties’ values are worth. 47thBPOE stated this is a “work of art.” I seriously think he must be sick. Anyone who doesn’t understand this means Canadians are directly getting hurt must be the greatest fool of all. By the way, HST issues would have sorted themselves out of the market by now. The tax was in place for less than two months. The buyers would have come back to the market. As we’ve been saying, this is a letigimate crumble that isn’t going to end. The peak has come/gone, and the downward turn has hit. A year ago, people will be looking in the rearview mirror wondering why it hasn’t “bounced back.” Well, that’s because it isn’t for several, SEVERAL years.

#84 T.O. Bubble Boy on 01.04.12 at 9:38 am

At least “Greg” bought at the lower end of the market… It will be much easier to handle a $20k drop in value vs. A $200k drop in value. Also, with a $265k mortgage, monthly payments are probably around $1400/month, which should be relatively easy to carry on $90k/yr.

The banks would have gladly given this guy 2x what he ended up borrowing (backed by CMHC of course).

#85 T.O. Bubble Boy on 01.04.12 at 9:44 am

@ #80 Smoking Man on 01.04.12 at 8:37 am
Price up in GTA, days on market down. Big spike in new listings in Dec. remeber all the gloom in media. Last month.

>> call me crazy, but it looks like guava just copied November’s numbers over to December by accident? The actual stats should come out today/tomorrow.

#86 Devil's Advocate on 01.04.12 at 9:50 am

#123Form Man on 01.03.12 at 3:15 pm
Devil’s Advocate
I note you carefully ignored my question of yesterday……still trying to untwist the pretzel you have tied yourself in, with your constant self contradictions ?

Believe it or not I don’t hang on every word of this blog with abated breath waiting for opportunity to address the incessant barking of the pups and poodles.

It will, no doubt, disappoint you Form Man to hear that I had a VERY busy day yesterday and will today and tomorrow and for the balance of this month and expect all year to be busy in consequence. The market IS, believe it or not, alive and well. In fact here are a couple observations I would like to share with you and the blog dogs:

A couple colleagues and I were talking and we get the general feeling (yes a “feeling”, “gut instinct” or “intuition” but no scientific evidence as yet) that the market is shifting once again. I have learned over the years to trust my “gut instinct” which rarely lets me down but too often in the past I it have let down by not listening to it.

A good portion of sellers over the past three and four years were motivated by trying to sell at the peak of the market afraid that if they did not it would fall out from under them. Now three and four years later they are coming to the conclusion that it is not going to crater as they were led to believe it might after that 2008 global financial fiasco. Many not serious sellers appear to be leaving the market and thus supply levels are abating. Those who remain interested in selling are starting to get it and realize that the market is something other than those lofty expectations they had warranted and are adjusting their prices to realistic levels that they may garner the attention of buyers. But it does not take so much a price reduction as you might think to do so. Often it takes but a very modest tweak in price to turn a shelf worn home into a hot commodity just as overpricing by low single digits can be the kiss of death to an otherwise successful marketing plan.

There is one area of the market though that is particularly uneasy right now and it is reverberating through the whole industry and that is condos. You see there is a reason so many condos were being built and sold to “flippers” at the peak of the market and that is because there is, or was, a lot more gross profit to be had by building condos than a single family dwelling. Condo’s were also a less costly venture for a newbie flipper to get into to be true but that market was first driven by developer greed.

Yes greedy “flippers” played a part but it is with greedy developers where it started. The profit potential in building condos is/was so much more lucrative than single family. So the market became saturated with condos – an excess supply. And we all know what happens when there is an excess supply – prices fall one way or another.

Anyone, “flipper” or end user, who bought a condo at the peak of the market anchored their investment at that given cost then. When the market tanked, such as it did in 2008/09, if some time afterward those condo buyers became condo sellers they often found themselves under water as prices had fallen. But the developer who was sitting on unsold inventory had wiggle room in-a- much as they could cut their anticipated profits thus dropping their price to a saleable level. They who recently bought could not compete. This is easily evidenced in the numerous new developments across the country where new product was offered a huge discounts by a still thriving still developers who were clearly still making money. How could a condo unit end owner compete? Their price was anchored and real at peak prices while the developers had wiggle room by merely reducing their anticipated profits to something less lucrative – no contest – advantage developer by a wide margin. So then developers began after cutting the throat of end users to cut that of their competition further exasperating the whole matter. And, of course, this spilled over, somewhat, into other areas of the market including single family but not nearly so much as you have been led to believe.

The resale condo market sucks big time. The older the condo the harder it is to sell. Older condos just don’t offer the amenities that new do and on top of that the sellers of older condos, in most cases, don’t have the ability to concede in price, like a developer of a new condo does, without selling at a loss.

My point in explaining this to you is to point out that every market is different vertically and horizontally. Yes there is interplay amongst them and one is influenced by the other but not necessarily nearly so much as you might be led to believe. You have to decipher where the constant bombardment of negative publicity on the real estate markets comes from at to what it speaks to fully understand what it means. You cannot simply take it prima facia.

The current state of the condo market does exert some negative influence on the housing market from the bottom up but not nearly so much as you might think. The single family housing market from what I see is alive and well as I am very busy right now in the midst of it. When you hear negative news of the real estate market you have to dig deeper to understand what they are talking about.

Make of it what you will, this short (lengthy) essay was written without edit as I just don’t have the time right now but wanted to point these intricacies especially to you Form Man, because I think you ought to understand this better than most coming from where you do – or propose to.

#87 Devil's Advocate on 01.04.12 at 9:58 am

Canada’s housing boom among longest in Western world

http://tinyurl.com/8952uoa

#88 Timbo on 01.04.12 at 10:09 am

http://money.cnn.com/2012/01/04/real_estate/Manhattan_home_prices/index.htm?iid=HP_LN

http://www.bloomberg.com/news/2012-01-04/french-consumer-spending-falls-on-joblessness-euro-debt-crisis.html

no recession here. Wages will always rise with inflation and an ever expanding middle class.
——

http://www.youtube.com/watch?v=_EpeF1fcji0

Just throwing this out as it is a very sober view on how we got here why we need to change things.

#79 very good link

#89 Beach Girl on 01.04.12 at 10:28 am

#149 Timing is Everything on 01.03.12 at 7:08 pm

Beach Girl

Hey B.G., you should pretend you like sex rather than pretending you know how to cook. Things will be ‘cooking’ in no time.

__

Why do you assume, I have no interest in sex. I was not put on this earth to entertain men. It’s supposed to be the other way around.

___

Herb. You protest too much. I am quite sure you are handsome and virile. But a true gentleman. I shall enjoy my wings tonight, but might have a quiet thought of you.

___

#187 Bottoms_Up on 01.03.12 at 10:23 pm

#135 Beach Girl on 01.03.12 at 5:17 pm

Ever wonder if your kids turned out the way they did because of you?

____

I kinda wished they were more like me. I once told the 2 idiot’s father, of all the millions of sperm required in the sex act, these are your best results.

When you were young, you probably bored the shit and revulsed more than few, telling your unique birth story. Enough said.

#189 Valkyrie on 01.03.12 at 11:22 pm

#185

but you can’t put a price on their innocence, joy, and excitement …

Get a dog

____

Brilliant!!!!

#90 AACI Okanagan on 01.04.12 at 11:06 am

It was based on valuations accurate to last October. And this is now. The crumble has started.

where are you getting October from? The valuation date is July 1st , now that is dated.

#91 disciple on 01.04.12 at 11:22 am

Iran has already been secretly invaded and will soon be publicly toppled, in a sort of global dramatic production – disciple will explain to you below how the banksters have performed their greatest coup de grace ever:

Post revolutionary Iran has a theocratic government, whose elected officials are subject to oversight by a religious authority. However, it is the religious authority itself that is currently the subject of most accusations of corruption and reported to be behind the new deal with Israel. Additionally, Iran had chosen to invest around the imagined stability of the Euro, both out of poor financial judgement and a belief it was a way of opposing the influence of the United States in the region.
However, as the Euro is currently in total collapse and the banks looked to for providing support for the Euro, banks Iran is heavily invested in, are insolvent due to hundreds of trillions of Euros of toxic assets, worthless securities they have used to underwrite their most profitable lending activities.

Thus, Iran’s financial picture isn’t very hopeful and much less so if oil markets are under threat. A collapse of oil prices would lower Iran’s GNP (Gross National Product) significantly, causing additional social discord and the inability on behalf of the government to subsidize key constituencies. Currently, veterans of the Iraq/Iran war are one of the key political constituencies in Iran and are very mobilized for political action. They stand ready to act against the current government if financial policies threaten their interests, as does the military and the Revolutionary Guard.
Within a span of less than a decade, Iran has been effectively assimilated into the global agenda. No matter what happens with Iran now, it will ultimately lead to war and disaster.

So, you see, BOTH Iran and the US would absolutely love to see the Strait of Hormuz blocked, or the imminent threat thereof to remain. And Israel would definitely love to help out as well…

“Fossil” fuels are no longer needed. The price of these including natural gas would fall to almost zero if not for the artificially manufactured market. More on this later…

#92 disciple on 01.04.12 at 11:44 am

What Energy Crisis? MIT suppressed cold fusion since 1999… here is the proof.

Nuclear reactions can be catalyzed in cold water, the same way chemical reactions can be. There is little difference scientifically, but then where would MIT get its funding for hot fusion? Why would we need oil? Why would we need money itself? —– Ah. There’s the rub. Peakoilist, this one’s dedicated especially to you… print out the report, sit down for a day or two to absorb it, and begin tinkering in your garage or boat. I would love to see a Canadian dash in where others fear to tread. Not only would John Lennon smile from his grave, you would receive the disciple medal of honour, presented to you right here on this precocious yet pathetic blog…

http://www.infinite-energy.com/images/pdfs/mitcfreport.pdf

#93 Daisy Mae on 01.04.12 at 11:50 am

#83 THE AMERICAN: “HST issues would have sorted themselves out of the market by now. The tax was in place for less than two months….”

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

The HST is still in effect. And will be until 2013.

#94 disciple on 01.04.12 at 12:03 pm

I know, I know, this isn’t a cold fusion blog… yadda yadda yadda…. BUT…..

Why has it taken twenty plus years for a commercial cold fusion technology to be developed? It is a tragedy beyond measure that an institution like MIT would allow such inappropriate behavior. Everyone involved has blood on their hands from all the people on this planet that have died due to the suppression of this technology. Literally, due to their suppression of cold fusion, children have needlessly starved, millions have suffered dehydration due to a lack of clean water, the environment has been trashed, and the global economy has been almost destroyed.

And this is but one of many such stories about the suppression saga from 1989. The suppression from back then has had phenomenal staying power due to the brainwashing that pronounced “cold fusion” to be “junk science,” no matter what.
Ignored are thousands of replications worldwide, with several making significant gains toward marketplace viability, and the E-Cat actually reaching the marketplace on October 28 of this year with a 1 MW unit.

A few individuals in the mainstream are coming around and waking up to the reality of cold fusion, like NASA’s Dennis Bushnell who claims cold fusion is the number one most promising alternative energy technology on the planet. However, to protect hot fusion research, protect the status quo, and to keep the public from realizing how the scientific community suppressed cold fusion, he calls the phenomena LENR (Low Energy Nuclear Reactions). In addition, he claims there is no fusion in cold fusion, in order to try and make the technology seem more mundane, and more acceptable.
There were enemies of mankind in 1989 that wanted to prevent the proliferation of cold fusion, and there are still such enemies today. Reading about how cold fusion research was attacked from the very start can help us prepare for attacks from these in the future.
We cannot let greedy, selfish, and power-hungry monsters and their countless minions suppress cold fusion for another twenty years or more. There are too many lives at risk. Simply put, the future of our civilization is at stake.

#95 disciple on 01.04.12 at 12:10 pm

What problem?

The closer you look, the more you realize there aren’t any problems we can’t solve. For example, please don’t count yourselves among those who fall for the world over-population myth. One of the oldest tricks of the mind control game:

http://www.relfe.com/2009/world_population_growth_energy_solar_renewable_solution.html

#96 disciple on 01.04.12 at 12:22 pm

THEY don’t need to find you… You must find THEM… that is, if you are to prove you are worthy to enter into their fraternity. Thus is the logic of your real rulers. I totally and utterly reject it, but some of you that think there is merit to being an “insider”, I say think again, fool. The following is very hard to find information. You’re welcome.

http://www.freemasons-freemasonry.com/beresiner7.html

#97 Jenn on 01.04.12 at 12:23 pm

Shaking My Head

Where else except BC do you have the government worried about people being able to pay their property taxes!!! Homeowner grants to help – new level -to qualify $1.28 MILLION lol lol

#98 Ret on 01.04.12 at 12:32 pm

#38 Electro-Motive

This has happened over and over again in Hamilton. Burlington Street in Hamilton is basically a hollowed out shell of what was once one of Canada’s most concentrated industrial areas. No one cared then under the Liberals and no one cares now under the Conservatives.

The pension costs for a retiring work force and high Canadian wages killed them all off, one by one. The government will throw out some token money at this, maybe, but ultimately it’s left up to the management and unions to make a go of it. The industrial environment has changed world wide. This is news?

Every year a major employer or two walks out of Hamilton, often to the US. There is nothing much left here except for government sponsored projects. Who do you sell steel to when many of your customers have left town?

No foreign buyer wants to get into the mess that US Steel got into when it took $150M of sucker money from the Ontario government and wound up paying out 8000 Stelco pension checks a month. For their efforts they got a disfunctional labor group, a clapped out steel operation, and millions of dollars in legal bills. Other foreign buyers got a wake up call with this takeover fiasco.

Prediction: The older Japanese auto plants will also leave southern Ontario in the next 10-15 years once pension costs start to erode their profits. The Big 3 did it and so will they. It will then be time to get a State government in a depressed area to give them lots of state aid to build a fresh new cutting edge plant staffed with a young, eager non-union workforce willing to work for $22-28 an hour all in.

I sincerely hope that this dispute at Electro-Motive can be resolved by the company and the workers. Both sides need to realize that their battle is more with the world forces around them in their industry than with each other.

#99 Form Man on 01.04.12 at 12:34 pm

#86 DA

that was an incredibly long essay that still failed to answer my question. What part of reading comprehension do you not understand ?
question again :
In your previous posts you claim ‘buyers are lined up to get into the Okanagan, because everyone wants to live here’ . Then you claim that realtors are just as busy moving buyers out of the Okanagan, because it is too nasty a place for them to survive. The comments taken together make no sense. Care to elaborate ?
Glad to see you are finally agreeing that condo prices are crashing in Kelowna ( only took you 3 years. pretty quick thinking for a realtor )
Kelowna home prices will continue to slide all this year, just like they have since 2008. You will see ( although it may take you 3 years to figure it out…….)
I will give you a hint : prices will not stabilize until MOI drops below 6 months. We have a ways to go.
Glad to see you have entered 2012 just as deluded as ever.

#100 Spiltbongwater on 01.04.12 at 12:34 pm

If someone can’t afford to pay their property taxes, they can always call Capital Direct or any of the other home equity lenders and take a loan to pay for them. Or if they have children, B.C. lets you defer your proerty taxes until they are 18.

#101 Daisy Mae on 01.04.12 at 12:35 pm

Local news (radio) as of this morning:

“Property assessments in the Kelowna area are relatively unchanged from last year”.

#102 Waterloo Resident on 01.04.12 at 12:50 pm

That’s funny, the sales of homes here in the Kitchener-Waterloo area are still BOOMING. If a ‘for-sale’ sign goes up, its sold less than 2 weeks later, usually for OVER list price too !

So I guess we have our own small little world here, separated from reality ? Seems like it to me.

Here in the K-W area there is talk about a shortage of inventory, that is why prices are still skyrocketing.

———–
( 24,600 teaching school graduates, all competing for only 200 potential jobs Nationwide, that is what his wife is facing ! )

You said that Greg from Calgary writes that his wife is a student in the education program, graduating in 2013: OH YEAH ! Cannot wait for her to graduate and find out how much IN DEMAND SHE IS !!! As we all know, teachers are in a huge shortage right across Canada and they are being given $50,000 signing bonuses if they sign on with a school board — RIGHT ??? ( Please ! )
– Its more like she will be accepting a job where she says “Will you want fries with your order?”

They said that they found a 1300 sq ft townhouse, in the burbs for $279,000.: WOW, such a thing here in K-W costs well over $400,000 so they found themselves a BARGAIN ! I would say ‘go for it’ even with a bum-wife who has little to no job prospects.

My advice to the couple is to just sit still and wait until his wife actually DOES get a job in teaching, and that might take another 284 years, so just wait for now. Don’t worry about a $14,000 loss, if you were renting your place you would be losing about $7,000 per year in rent, so after 2 years of rent you’re in about the same boat as you are now. Just wait as you’ve got a good deal, and with only one income you won’t be able to afford the carrying costs on an more expensive house.

#103 Victor on 01.04.12 at 12:54 pm

http://opinion.financialpost.com/2012/01/03/bear-snarls-at-housing/

So: housing prices have for many years been rising faster than Canadians’ incomes, and those households’ abilities to take on new debt to afford that housing will eventually be tapped out. Meanwhile, the pace of investment in new housing construction has been persistently and uncomfortably high, and the dark spectre of forests of less-than-full condo towers begins to loom.

This view is consistent with three market outlooks, the first being that house price appreciation will thoroughly stall out; this is the brightest view. Next is the likelihood of what housing market forecasters might call a market correction, a price drop of 5% to 10%. The third possibility, which becomes more likely in the event of a significant hit to labour markets, is a bursting bubble, a bigger average price drop, and a lot more households financially underwater.

No aspect of the data supports a bullish view of housing markets. Sound monetary policy from the government and the Bank of Canada aimed at hitting the 2% annual inflation target, and that does not encourage household debt accumulation, and does not seek to prick any bubbles, would be supportive of either of the two relatively benign outcomes. A burst bubble need not be in the cards for Canada. But it would be hard to avoid in the event of a flagging global economy and its inevitably nasty impacts on local labour markets.

All in all, a safer time to be a bear.

Financial Post
Finn Poschmann is vice-president, research, at the C.D. Howe Institute in Toronto.

#104 Form Man on 01.04.12 at 1:07 pm

#87 DA

we are supposed to be comforted by the fact that our housing bubble has grown larger and for longer than most other places in the world ?

on another note, BC assessment numbers out today show Kelowna property prices have dropped twice as much in 2011 as Kamloops. This seems odd, given that realtors constantly tell me ‘everyone wants to live in Kelowna, no one wants to live in Kamloops’
could this be because Kamloops has an actual economy beyond housing ? tell me it isn’t so DA……

#105 bill on 01.04.12 at 1:44 pm

Remember how “this will not end well?”.
didnt notice an ending yet there stevenson….
nervous?

#106 bill on 01.04.12 at 1:51 pm

Crappy real estate only sells in overheated markets.

so now the market is overheated?

#107 bill on 01.04.12 at 1:57 pm

49 BPOE on 01.04.12 at 1:04 am
gee and I thought it vindicated Garth completely.
not to mention it is a year out of date…..
kinda like you ,past the ‘good before’ date.

#108 bigrider on 01.04.12 at 2:00 pm

Ross McCreadie CEO Sotheby’s International Realty says there is a lack of supply causing bidding wars in T.O for luxury properties including condos.

General conclusion is foreign demand plus lifestyle changes among uber rich in Canada driving demand.

His quote “simply more rich people”

http://www.theglobeandmail.com/report-on-business/video/video-torontos-luxury-property-market-flourishes/article2270678/?from=2277801

You really are out there on your own with your opinion Garth.

#109 The InvestorsFriend on 01.04.12 at 2:26 pm

NUMBER 102 bigrider says: “You really are out there on your own with your opinion Garth.”

Warren Buffett says (paraphrasing from memory) You are neither right not wrong because others agree with you. Public opinion is no substitute for analysis.

******

A confident analyst does not base analysis on who agrees with it.

TIMBER…

#110 prairie gal on 01.04.12 at 2:38 pm

@ #77 Where’s the Money Guido:

Did it ever occur to you to actually try to… *gasp* use less power? Talk about being entitled to your entitlements…

God forbid people actually take responsibility for their consumption.

#111 April on 01.04.12 at 2:44 pm

#109- The InvestersFriend. NO, HE IS NOT!. Many in the financial sector agree with him.

#112 Timbo on 01.04.12 at 2:45 pm

http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fwww.eleconomista.es%2Finternacional%2Fnoticias%2F3644474%2F01%2F12%2FFrancia-aplicara-el-IVA-social-antes-de-las-presidenciales-de-mayo.html&act=url

“The French government intends to implement the so-called ‘social VAT’ levied on products imported from countries with low production costs in order to apply a reduction in social contributions”

A warming of protectionism?

All we need now is $110 oil and another commodity spike and walls will begin to be built. Iran is a wildcard now.

Get out of debt and stay liquid.

#113 spaceman on 01.04.12 at 2:47 pm

“Garth, Vancouver avg SFH price is down 13% from peak. Sure, some of this is noise (ie. sales mix), but prices are crumbling (Victoria is getting hammered)”

Sorry but Victoria average price is down about 7%, inventory is stable, sales are still happenning but at the lowest level in many years, and any listings that still exist, and have not been pulled (and there are lots) sell for 30 – 40K below assessment. I wouldn’t say hammered, but declining, or slow melt is more like it. this is exactly what Carney and Flaherty want, a slow leak in the bubble. They may wind up popping it big time with any move in the spring, but interest rates will remain where they are till May/June/July…

This will be an interesting spring…

#114 Form Man on 01.04.12 at 2:50 pm

#103 Victor

excellent link

#101 Daisy Mae

according to the BC assessment infographic on the Vancouver Sun webpage, Kelowna average property values dropped 1.81 % in 2011. Vernon dropped 3.1%
Penticton dropped 1.2%. Kamloops dropped .19% ( making my assertion to DA wrong, Kelowna did not drop twice as much as Kamloops…..it dropped 10 times as much……..) These numbers are certainly not reflecting reality, as Kelowna prices have dropped more like 15% in the last year, but for comparison purposes we will use them.

#115 Blacksheep on 01.04.12 at 2:58 pm

Disciple # 96,

“THEY don’t need to find you… You must find THEM…”
————————————————

No problem, I just saw them outside Safeway, selling hotdogs.

See…no need for Drama. Just let ’em know you worship Horus (or pink unicorns) and you’re in like Flynn!

Of coarse my Grandfather and Uncle on the “inside” will help me, thus greasing the rails, to world domination.

Want to join the “Dark side” but I’m waiting for the hair
to grey up more, that and the wife say’s my menacing Vincent Price laugh, needs work :)

take care,
Blacksheep

#116 Herb on 01.04.12 at 2:59 pm

#108 Bigrider,

there will always be people to whom a million here or a million there does not add up to real money. They do not the real estate market make. It’s the schmucks functioning several levels below them who do, and they won’t be able to trade up or size down, grinding the market to a shuddering halt.

So what’s your point about Garth’s opinion?

#117 City Slicker on 01.04.12 at 3:02 pm

Calgary assessments are out and down 3%. But this is as of July 1st, not sure it things have gone more downhill from there. Not sure if I’d trust a smile like that:

http://www.metronews.ca/calgary/local/article/1062953–calgary-property-values-drop-for-2012

#118 poco on 01.04.12 at 3:46 pm

#108bigrider on 01.04.12 at 2:00 pm

You really are out there on your own with your opinion Garth.
____________________________________________

i was always under the opinion Garth was agreeing with me concerning the downfall of this delusional housing market

#119 disciple on 01.04.12 at 3:49 pm

After I read today the latest pronouncements from Bill Gross of PIMCO, the world’s largest bond fund, I was left shaking my head and asking myself, “What the hell is this guy doing?”

Earlier this year he made the blunder of betting 100% (yes 100%) against US Treasuries… his explanation: “I’m having a bad year”. No, Bill, that is not likely, not with your track record. And now his new baby ETF Total Return Fund will have half of its portfolio in Mortgage Backed Securities???

If I didn’t know better, I’d say he is systematically ripping away his clients’ retirement funds for his bankster friends. But that can’t be it, can it? I think you know what my answer would be…

Get out of bond funds! Good ol’ Bill is telling you that the writing is on the wall… Boomers, they’re coming after your retirement money and after that your social security. They won’t be happy until they take EVERYTHING. You can bet on it…

#120 disciple on 01.04.12 at 4:06 pm

#115 Blacksheep… au contraire, mon frere… there is always a need for drama. I have more work to do today, but I think I have just enough time for another link …here goes… Proof that banks are directly funding war:

http://www.express.co.uk/posts/view/289195/British-banks-fund-cluster-bomb-makers

Do you really think that these criminals want every single person on the planet to enter the digital age? Of course not, for then, they would be out of business. Brave New World indeed, but only for the 1%, eh?

#121 Wally on 01.04.12 at 4:11 pm

Back in 2006 both my sister and I had $500K budgets for homes in Vancouver. She bought a somewhat run down townhouse on the Westside. I was regularly reading this type of blog, rented rather than buy and thought she was would lose her equity in a big way.

I look at her place now and it’s assessed at 900K… and I have a piddling return on my original down payment. I hope things do change at some point as Garth continues to proclaim.

#122 Dorothy on 01.04.12 at 4:44 pm

People need a place to live, and while renting works out better than buying for some, for others buying works best. It all depends on both your temperament and financial circumstance. One size does not fit all.
However, no-one should buy unless they have a sizable downpayment and a reasonably secure job. That has ALWAYS been true, regardless of the state of the economy at the time of purchase. It is only when people become overleveraged that they get into financial difficulty, REGARDLESS of what they bought with the money they borrowed. It doesn’t matter whether it was cars, holidays, dining out, or a fancy house; if you borrowed more than you could afford in order to pay for it, you’ll end up in financial difficulty sooner rather than later.

I’m old enough to have lived through several periods of prosperity and recession, because one always seems to follow the other. Consequently I’ve seen RE market booms, and RE market crashes, and at the end of the day the lesson I’ve learned is to live beneath my means, pay cash for as much as I possibly can, and always have some money saved for a “rainy day”. If you do that, you’ll survive even the difficult times, and come out at the end of it doing just fine.

So if you want to buy a house, have saved a decent down payment, and feel your job is reasonably secure, go ahead and do it, because you’re only on this earth once and for a very short time. But if you prefer to rent, and spend your capital on something else, then that’s fine too. Just don’t spend your life sitting around doing the opposite of what you’d really like to do, while waiting for some sort of financial armageddon to happen. Because whether it happens or not, your life is ticking away in the meantime, and precious time is being wasted.

What I’m trying to say is that instead of putting your life on hold while you wait to see what will happen, decide what it is you want and then take the necessary steps to achieve it. And if what you want happens to be a house, save up a good downpayment, shop around for a good buy, haggle for the best price, and then move in and enjoy. Don’t spend the rest of your life living in a basement apartment waiting for the world to come to an end!

#123 bigrider on 01.04.12 at 4:56 pm

#116 Herb #109 The Investorfriend.

I have no real point to the post Herb. Just thought I would give the contrarion point of view to this blog. Yes , Investor ,I know Buffett quote well.

I guess as bearish as I have been on RE I am as equally frustrated at the resiliency of it’s bullish relentless march upwards. Baffles me to no end.

My arguments to others to augment risk away from RE and into financial assets have fallen on deaf ears. Following my own advice, so far anyway, has not worked out as good. RE humpers and condo collectors are still “winning”

I do follow G advice on RE verse financial asset mix, currently about 35/65.

Can you both guess which side of that equation has done better?

#124 BPOE on 01.04.12 at 5:04 pm

Desperate postings of a caged wolverine who has been exposed for being totally wrong. The map tells the truth folks.
*********************************************
83 The American on 01.04.12 at 9:36 am
This is hilarious. This map is a heat map showing TAXABLE values, based on assessments from LAST OCTOBER. WEll, as Garth pointed out, the crumble in BC has already begun. This means Vancouverites are going to get hurt in their property tax bills as they are paying more than their properties’ values are worth. 47thBPOE stated this is a “work of art.” I seriously think he must be sick. Anyone who doesn’t understand this means Canadians are directly getting hurt must be the greatest fool of all. By the way, HST issues would have sorted themselves out of the market by now. The tax was in place for less than two months. The buyers would have come back to the market. As we’ve been saying, this is a letigimate crumble that isn’t going to end. The peak has come/gone, and the downward turn has hit. A year ago, people will be looking in the rearview mirror wondering why it hasn’t “bounced back.” Well, that’s because it isn’t for several, SEVERAL years

#125 BPOE on 01.04.12 at 5:09 pm

Truly clueless in Seatlle. He has no understanding of HST issues and how this caused new homeowners to wait on buying a new home. The savings are HUGE! Every post made by this individual expose the ignorance and arrogance
*******************************
Daisy Mae on 01.04.12 at 11:50 am
#83 THE AMERICAN: “HST issues would have sorted themselves out of the market by now. The tax was in place for less than two months….”

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

The HST is still in effect. And will be until 2013.
.

#126 Cato on 01.04.12 at 5:27 pm

Most cities/municipalities have seen spending increases that far outpace rate of inflation and population growth. The wealth effect made everyone feel a little richer opening their property assessments year after year. Now that the party is ending you gotta wonder what is going to be cut thanks to the frivolous pet spending projects that have been going on over the last several years.

#127 Timing is Everything on 01.04.12 at 5:35 pm

#77 Where’s The Money Guido???

Burn wood.

#128 Reality on 01.04.12 at 5:43 pm

#115 Blacksheep

Sad that so many today find reality to be a (bad) joke.

#129 Westernman on 01.04.12 at 6:06 pm

Hey DA,
Watch out for Form Man, if you disagree with him he’ll try to get Garth to ban your posts… a very enlightened, inclusive, new age Canadian liberal that Form Man.
Let this be a lesson to all of you that think liberalism is about caring and equality…

#130 jess on 01.04.12 at 6:26 pm

How many canadians are doing this?

Millions use payday loans to cover mortgage and rental
costs Housing charity Shelter says research showing millions of families using unsecured borrowing to pay housing costs is evidence of a debt spiral

Hilary Osborne
guardian.co.uk, Wednesday 4 January 2012 09.54 GMT Article history

Ohio Closes Fracking-Related Injection Wells after Earthquakes

Wednesday, January 04, 2012
After Three Decades, Tax Credit for Ethanol Expires (by

http://www.allgov.com/Top_Stories/ViewNews/Ohio_Closes_Fracking_Related_Injection_Wells_after_Earthquakes_120104

#131 Homer on 01.04.12 at 6:41 pm

#114 Form Man

You take what I assume is a pretty reliable and objective data source – BC Assessment – to quote a 1.81% drop in Kelowna.

What secret source do you have to trump this estimate with your “reality-reflecting” 15% drop?

#132 jess on 01.04.12 at 7:37 pm

the super visa

The federal government requires that one year of $100,000 in health coverage for those 55 and older has to be purchased up front, he said. It costs at least $1,200 a year and there’s no monthly payment plan. If your parent stays for just a few months, there are no refunds.(winnipeg free press)

=

The amount of wealth that was lost to the median family here in Florida is really staggering,” Sean Snaith, an economist at the University of Central Florida says. “If the median family of four in Florida were to save at twice the national savings rate, it would take something like 18 years to save back what they lost in home equity.”

http://www.npr.org/2011/12/30/144455950/fla-s-economic-pain-anger-could-shape-2012-race

#133 Keeping the Faith on 01.04.12 at 7:39 pm

#43 Pumper Stevenson …. Shhhutt-up!!!
any defenders of Stevenson, pretending themselves not be be Stevenson in drag, you can shut your pumping mouths too!

#134 TurnerNation on 01.04.12 at 7:39 pm

The TV keeps us distracted with First World problems:

– How to get you whites their whitest
– The static cling problem
– Book your dream vacation today
– A diamond is forever
– Go ahead, you deserve it!

#135 TurnerNation on 01.04.12 at 7:42 pm

Received this by email from my local mortgage broker:

“Many of our clients over the last few months have purchased a second home in Arizona in order to take advantage of the low home prices found there. Their timing maybe perfect since the Phoenix Business Journal just reported that the number of Phoenix foreclosures is now below the national average for the first time. (A somewhat dubious announcement but still very revealing)

Even more revealing is the fact that the current housing inventory in that market has fallen to just over 17,000 units from a high of 35,000 units 8 months ago. Things may be finally turning better for the Arizona housing market.

We believe a big part of the reason the Arizona market may be bottoming out is the strong rental market. Many of our clients are not buying these properties to live in, but are buying them as rental properties. The cash flow on the rentals properties in the Phoenix area is far better than most communities in Canada. For example, in Phoenix, generally, a good estimate is to expect from $2-3 per sq. ft. rent, based on a nicely furnished rental, in season. This means that a 1200 sq. ft., 2 bedroom condominium is likely to rent for $2400 – 3600 per month from November to April; and a condo like that would cost between $250,000 and $300,000.

But remember, the owner is expected to maintain utilities, local phone and cable and cleaning services, all of which can be arranged through a property management company.

So many of our clients are choosing to take the plunge and buy a US property, specifically in Arizona, we have interviewed several Realtors working in that area, so that we can recommend one that is both professional and understands the Canadian mentality.”

#136 TurnerNation on 01.04.12 at 7:43 pm

Second part from email – true?

“Financing a US purchase

Financing a home purchase in a foreign jurisdiction could be a daunting task. A typical Canadian attempting to get mortgage financing in the United States will require a down payment of between 20-30%, and will incur a fixed rate of approximately 6.5%.

We have a selection of products for our clients to use if they wish to tap the equity in their Canadian home in order to pay cash on a US property.
In fact, ING Direct recently launched a line of credit product suitable for this purpose. They chose ******* Mortgage to be part of a pilot project during their LOC roll out at a rate of P+.65%.

Since we know many of you already have a mortgage with ING this could be an easy way to grab some cash to buy a US property.”

#137 Keeping the Faith on 01.04.12 at 7:48 pm

Let idiocy rain … or rein.
This blog is going to turn almost unreadable I’ve decided over the next 12 months, except for Garths posts of course.

The reason?
Because the polarizing views expressed here will be ground zero for home-debtors that want to try and argue the RE market back up.

This is going to be entertaining, I’m stocking up on popcorn to laugh at people I know who will be stuck with their RE debt!!!
It will be a G rating, PG-13 comedy or R rated horror flick … depending on how much debt you have.

I’m sitting with Barney in the kids section in bean-bag chairs for this one, extra butter please ;-)

#138 Macrath on 01.04.12 at 8:00 pm

Ann Barnhardt is back with Jim Puplava, guns a blazing.

http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/01/04/ann-barnhardt/financial-house-of-cards

#139 Bobby on 01.04.12 at 8:02 pm

For# 121,
Poor Wally, trying to blame someone else for their woes. I’m a regular reader of this blog, but I don’t recall it being in existence back in 2006.
Perhaps you are a realtor, wondering where your next sale and commission are coming from?
If I knew going back many years, what I know now, I would have done things significantly different. In 1982 I would have bought a 30 year government bond for $10,000 that was yielding in the high double digits. In 1986 I would have bought Dell stock at $.50 a share that has since split an unimaginable number of times. My favorite is lake front lots on Alta Lake in Whistler for only 10k when I first used to ski there in the late 70’s.
My point, make your decisions with the info you have and move on. And please don’t blame someone else. It’s unbecoming. Oh yes, remember the one that guesses right is the expert!

#140 Form Man on 01.04.12 at 8:12 pm

#131 Homer

the assessment is an average for all property types ( residential, institutional, industrial, commercial, etc. ). This blog is focussed on residential. CREA puts the average price drop for homes in Kelowna at closer to 15%, which coincides with what I and other developers are seeing.

#129 westernman
I blush at your suggestion of the influence I have over Garth………
be afraid westernman, not only am I a liberal, but apparently one with power, the most dangerous kind…..

#141 Nostradamus Le Mad Vlad on 01.04.12 at 8:21 pm


Good posts 2day — disciple, one 4 U further down re: alternative (cheap) energy.

It will be interesting if China and Japan flatline at approx. the same time, call their IOU’s from Uncle Sam then merge into a different currency. Fun times, that’s fer sure! Don’t know how that affects the bond / stock markets, ‘tho.
*
2012 Bank foreclosures surge; US economic forecast Either follow the stock markets or the fairy dust blowin’ in the wind; Gold and Silver 2012 forecast; 5:09 clip Greece wants out yesterday; Life without the middle class; MF Global sold assets to GS before collapse.
*
disciple This one is for you re: alternative energy sources; Thwarting US defense plans, so obviously they’re going in, Buffer Zone in Syria, and Deploying Troops (straight from Iraq). But China opposes sanctions; 10:13 clip Romney will not beat Obomba (another prediction). Unless the elite want him there, and Obomba “President Obama stated: “Two critical limitations in section 1021 confirm that it solely codifies established authorities”.; Ohio Fracking caused ‘quakes; Romney vs. Paul “I think Ron Paul’s votes were “accidentally misplaced” into Santorum’s totals at that secret counting location.” wrh.com.

Siberia “The nukes haven’t even started flying and already they are re-drawing the map of the world! Putin now has an eastern front to worry about in the coming war.” wrh.com;UK Their politicos and bought and paid for, just like NAmerica’s and the m$m; BP payments stalled. Figures; Rick Santorum’s nephew endorses Paul; The Dogs of War The west is on a march, trying to hold on to its place as #1 but it won’t work; Calcium and Cholesterol The public has been duped; Hallsville, Texas Entire police dept. fired; Obomba and FigNewt have one thing in common. Guess!

#142 Canis on 01.04.12 at 8:44 pm

#122 Dorothy: or, to summarize, BUY NOW! It’s a GREAT time!

#143 Devil's Advocate on 01.04.12 at 8:50 pm

#114Form Man on 01.04.12 at 2:50 pm
#103 Victor

excellent link

#101 Daisy Mae

according to the BC assessment infographic on the Vancouver Sun webpage, Kelowna average property values dropped 1.81 % in 2011. Vernon dropped 3.1%
Penticton dropped 1.2%. Kamloops dropped .19% ( making my assertion to DA wrong, Kelowna did not drop twice as much as Kamloops…..it dropped 10 times as much……..) These numbers are certainly not reflecting reality, as Kelowna prices have dropped more like 15% in the last year, but for comparison purposes we will use them.

Form Man I just can’t help myself from calling you out and saying you don’t know jack shit. BC Assessment is so far outta whack. I’ve sold properties for $100,000 more than assessed value and I’ve sold properties for $100,000 less than assessed value. It really doesn’t matter to the end user either way because that end user isn’t you and me it is the municipality which at the end of the day just figures out how much money they need to run things and then adjusts the mil rate accordingly. They don’t give a rats ass what your home is assessed at and neither should you as a gauge of it’s value because it is about as accurate as your assessment of what the housing market is doing – a grossly inept guess at best.

#144 Ret on 01.04.12 at 8:52 pm

#15 Wonderland in Oakville.

SF home zoning makes this operation illegal. Contact municipality and sent the link for room rentals but don’t hold your breath that anything will happen. If Oakville lets this kind of operation slide, it starts a tsunami of slumlords. They start bragging to their buddies about how easy it is to set up an illegal operation in Oakville and score big $.

Probable fire code violations for egress windows if rooms are in the basement. Firewalls/doors not in place if an illegal duplex. Interconnected smoke alarms probably absent. Possible electrical code and building code violations as well. Permits for renovations, additional bathrooms etc.?

Oakville politicians and by-law need to be vigilant on this or the area will become a student ghetto and properties will steadily deteriorate. A home like that around McMaster would be good for at least 9 doors (rooms) $450-500 per month. Do the math.

Surprisingly, RE values often hold up as the slumlords move in but your community and quality of life dies. Lots of garbage, unkept lawns, parking issues etc. SFH owners leave.

The place was listed at $679,000 in the link. It sold for $600,000? That’s a drop.

http://www.canadapropertylisting.com/4-bedroom-House-for-Sale-in-2008-Elm-Road-Oakville,-ON-L6H-3K8-Oakville-pid827645s1

#145 john saccy on 01.04.12 at 8:59 pm

#121 Wally on 01.04.12 at 4:11 pm
Back in 2006 both my sister and I had $500K budgets for homes in Vancouver. She bought a somewhat run down townhouse on the Westside. I was regularly reading this type of blog, rented rather than buy and thought she was would lose her equity in a big way.

This blog did not exist in 2006. Go get a life.

#146 Devil's Advocate on 01.04.12 at 9:00 pm

#129Westernman on 01.04.12 at 6:06 pm
Hey DA,
Watch out for Form Man, if you disagree with him he’ll try to get Garth to ban your posts… a very enlightened, inclusive, new age Canadian liberal that Form Man.
Let this be a lesson to all of you that think liberalism is about caring and equality…

It’d take a lot more than Form Man to get Garth to ban me. And if it should ever come to it rest assured I can do a good job of that myself. But the fact is, despite our disagreements and his misunderstanding of the true intent of a BRA, I respect the man (Garth that is) too much to do what it would take. ;-)

If someday I really do need to wean myself of this “pathetic” blog I will do the dastardly deed and self-destruct myself with such reckless abandon I’d have to leave the country. Ya I know some might say I’ve already done that but I will let Garth be the judge of that if and when the time comes.

#147 HuffnPuffnBlowdaHouseDown on 01.04.12 at 9:24 pm

well tell the genius RealEstate relatives…you want your 14K$ back get me out of this place without costing me any more loses from when I started, thank you very much. and smile with a big grin!

some people are real slow learners..years to never in a lifetime seems to be normal for a large subset of the population.

thanks to Harper and F we are headed for amusing times.

So Garth are you shorting Mortgage backed securities?

#148 palebird on 01.04.12 at 9:46 pm

#143

I could not agree more regarding assessments, they are pretty much meaningless except for the fact that your taxes are factored on the assessment..and BC homeowners just got the shaft again..I laughed hard when I heard the news yesterday..

#149 The Thing in the Basement on 01.04.12 at 10:16 pm

Several years ago I appealed my assessment as it was
about 10% higher than other similar homes in my ‘hood.
Not that I disagreed with the figure, as it can be quite
meaningless as pointed out. I won a concession for about
half the difference, but I’ve noticed that since that time
these other houses all come withing a few $K of my
assessment, so I cant complain. Overall a drop of about
$24K over two years.

Also lowest SFH sales in the area (E coast VI) in last 10
years.

#150 April on 01.04.12 at 10:17 pm

#135 Turner Nation
What about the “shadow inventory” being held back by the banks so as not to “flood the market”. Just what I’ve read…………

#151 Snowboid on 01.04.12 at 10:27 pm

#113 spaceman on 01.04.12 at 2:47 pm…

The home we sold last year could have fetched about $ 650,000 at the peak in January 2010. Just checked the latest assessment and it is way down from last year – almost $ 40K.

So if you saying homes are selling for about $ 30-40K under assessment that would mean the new owner of the house has taken a $ 70K minimum hit in 10 months.

In fact it is closer to a 22% decline in 2 years – I call that being hammered!

#152 Junius on 01.04.12 at 10:30 pm

#59 trt,

I only need one home thank you very much. Anyone who has bought in Vancouver since 2008 will end up losing money.

As for Romeo Jordan, clearly he lost his Julietnand his mind.

#153 Junius on 01.04.12 at 10:35 pm

#125 BPOE,

You’re excuses regarding the HST is just a lame excuse or denial. Either way the jig is up. Vancouver’s bubble has burst.

#154 Devil's Advocate on 01.04.12 at 10:37 pm

#140Form Man on 01.04.12 at 8:12 pm
#131 Homer

the assessment is an average for all property types ( residential, institutional, industrial, commercial, etc. ). This blog is focussed on residential. CREA puts the average price drop for homes in Kelowna at closer to 15%, which coincides with what I and other developers are seeing.

If the predominant sentiment of the pups, poodles and Form Man can be that CREA is full of shit when they say prices went up X.X% then I have every right to say with equal impunity that they are wrong when they say prices in Kelowna went down X.X% this year. I see no evidence in the local market which suggests so and am happy to sit down with anyone and pull directly from the local MLS the raw data under their direction that they might seek to prove me wrong. I know that it just is not there.

Do not put your faith in what statistics say until you have carefully considered what they do not say. ~ William W. Watt

#155 Mark on 01.04.12 at 10:38 pm

For sure/At least one in three houses in my neighbourhood (Marpole/Oakridge) appear to be without any person/family living in it. This I notice when I take out my dog in the evening. All houses bought for speculation?
Same counts for all condo’s downtown. Just look at the amount of condos/ building with lights on/lights off at 8 pm at night.

#156 Junius on 01.04.12 at 10:42 pm

#126 Cato,

I agree with your post. It was not part of Garth’s post but I believe one of the reason’s Vancouver has run up such a huge bubble is the wealth effect from public spending, specifically the Olympics.

The timing of the Olympics and the 5-10 Billion dollar investment made it possible for Vancouver to almost avoid the recession of 2008. It fed into the “we are different here” attitudes and stimulated the myths. Now it is all unraveling as we learn it is not different here as many of us have been saying since 2009 or earlier.

#157 Snowboid on 01.04.12 at 10:51 pm

#135 TurnerNation on 01.04.12 at 7:42 pm…

This also reflects the latest reports from Cromford, and comparable sales in the last few months in our area.

Sales are up and of the total number of homes in our community there are 1.7% active listings – only a couple of short sales and foreclosures. Our place has very slowly gained in value as well.

While you are correct that a casita or condo will potentially bring in $ 2400-2500 a month during the peak season, it will only rent for less than half of that during the summer. Too much competition for rental properties around $ 1200 so not likely you could do short-term rentals in the off-season. The listed prices are a tad high – more like $ 180-200K to fetch that $ 2400 rent. We could bring in $ 2400 easily (SFH) and paid far less than $ 180K – it is usually properties backing on the golf courses or lakes that are around $ 180K and up.

Most Canadians we know that winter here didn’t buy to rent the property – they want to be here Oct-Apr or Nov-May.

The traditional snowbirds have a network of suppliers to maintain the properties during the summer – all pretty reasonable for the level of service.

There are a number of Canadian ex-pat agents here, who also have all the contacts a snowbird would need.

As far as your next post, all the Canadians we know paid cash. How they got the cash I haven’t asked yet.

The latest story here is the ‘rich’ North Dakota residents who have sold their homes at inflated prices (because of the oil boom about an hour south of the Sask border) and are buying here and using the extra cash to retire on!

#158 Bobby on 01.05.12 at 12:37 am

For Devil’s Advocate,
You are taking this all too seriously.
It’s interesting in my experience that a realtor will use the BC Assessment to promote a lower selling price, yet state they are irrelevant when trying to sell at a higher price. Personally, I use the assessment as just another tool to determine the value of a home.
It is just salesmanship and like everything it’s buyer beware.

#159 Where's The Money Guido??? on 01.05.12 at 2:37 am

Re: #110 prairie gal on 01.04.12 at 2:38 pm
Did it ever occur to you to actually try to… *gasp* use less power? Talk about being entitled to your entitlements…
Well Prairie Gal, that is exactly what I’m doing.
I have been doing everything the BC gov’t has told me to reduce my energy use and “green” my abode. But the funny thing is, with the less consumption, I haven’t saved a penny, with the bill being the exact same as last year’s. Isn’t that funny, using 30% less energy but still paying the exact same amount as last year. Looks to me like the BC gov’t was depending on thieving that amount from my pocket through BC Hydro-Terasen so their deficit wouldn’t be HUGE and they can justify their exhorbinant salaries and perks. Unless I get off the grid altogether, I can’t cut back any more, but I’ll bet dollars to donuts that BC Hydro’s first tier rate will drop another 10% next year to hide another tax hit to their customers, courtesy of us taxpayers.

#160 Unusual Business Ideas on 01.05.12 at 1:31 pm

An American company will pay your mortgage in exchange for turning your house into a giant, hideous billboard.

http://www.businessunusual.net/ads/adzookiepaintedhouseads/

Kinda wish this was in Canada, too.

J