Wasted

When a Vancouver builder issues a media release yearning for tighter mortgage rules, well, you know the party’s over. It’s like the fox pleading for chicken rights legislation. Clearly we’re running out of birds.

But that’s just what Bright Coast Homes did on Wednesday. “I think the tightening of some of the lending standards is favourable in our current housing market,” said spokesguy Ken Gee, in a spasm of common sense rarely witnessed in the housing industry. And he’s right. It’s why that elfin pugilist F is on the verge of murdering the 30-year mortgage, which is as much a part of young couples’ lives as (in my case, anyway) edible bras.

In fact, this builder’s little media campaign laments exploding household debt, too-cheap rates and contains this quote from BC builders’ pocket economist Tsur Somerville:  “All you have to do is look around and you’ll see that if a substantial correction does happen, that would be a real big problem. So let’s not let the housing market be driven by a wave of cheap and easy-to-access money.”

Too late, Tsur baby. Horse. Barn. Over.

Many blog dogs sniffed out the latest smelly news from the Okanagan, for example. Just months after local realtors were proclaiming victory over the forces of inevitability, markets in Kelowna, Vernon and Penticton – traditional burial grounds for GTA Boomers – have cratered. As reported yesterday, foreclosures are running at ten times the level of three years ago, with 170 court-ordered sales.

In the last month there have been 60 new foreclosures. Not only is this more evidence Kelowna is Canada’s Stockton (the SF exurb which birthed the US housing crash), but there are two must-know implications. First, the speckers, flippers and HGTV porn addicts have been crushed. Wiped out. Sent packing down the highway and over the Coquihalla.

This is a sure sign of a market approaching the cliff. Speculators can only make money in a continuously rising scenario, full of greater fools too whacked by house lust to see what they’re doing. After all (like Toronto and Vancouver), nobody can make money any more buying a single house or condo unit and renting it out, because rent/price ratios melted down long ago as real estate turned gaseous. So when prices moderate, then flatline, then start to trend lower, the gig’s up. Tens of thousands of amateur property geniuses in Toronto will soon learn the same lesson.

Said a Re/Max guy: “The market in the Okanagan has really come to a standstill on that speculative investment front, and that is really what has been a major portion of the court ordered sale thing that has increased so dramatically.”

But foreclosures have an even bigger impact on sellers. It ain’t pretty. Suddenly there are dozens and dozens and dozens of houses thrown on the market by banks which care only about covering their loans. The effect on prices can be chilling. It was a wave of similar bank-forced sales in the US which infected entire neighbourhoods and subdivisions. Dwindling numbers of potential buyers were sucked off to the bargains, leading all sellers into a race to the bottom. The final destination was negative equity for close to a third of all families.

But there’s more.

CREA’s latest numbers are equally ominous, especially knowing how much lipstick was slapped on before they went public. Seasonally adjusted (ie ‘enhanced’), the real estate association’s report shows existing home sales dropped a substantial 4.5% from December to January. It’s the sharpest plop in two years. Meanwhile prices are up – but the 1.2% annual advance is half the inflation rate and a drastic trimming from just six months ago. In fact, it means all the equity most people are sitting on would have performed better in the orange guy’s shorts.

Is this emblematic of what’s to come? You bet, says TD economist Jacques Marcil. “This month’s decline is reflective of what will shape up to be a softer year in sales.” And as sales fall, so do prices – in fact, the lag time between the two can easily be nine months, depending on the market.

So how do we square this growing body of evidence of housing angst with bidding wars for North Toronto shacks and a near-riot on Sunday outside a Richmond Hill developer’s office?

Why bother trying? If markets were efficient there’d be the instant dissemination of the information investors need to make wise decisions. But that’s utopian. And despite the non-stop news cycle, web-connected devices in every pocket and the glorious existence of this pathetic blog, shocking numbers of Canadians will do exactly what they did with Nortel, Bre-X and RIM. They’ll chase prices to the pinnacle, then wonder what the hell happened.

This is why the builder guy in Vancouver is right.

To save himself, his company and his industry, somebody’s got to take the punchbowl away. Before we’re all wasted.

236 comments ↓

#1 Randy on 02.15.12 at 10:02 pm

First is Worst !!

#2 Arse on 02.15.12 at 10:04 pm

first???

#3 Corban on 02.15.12 at 10:09 pm

First was wurst. So what was the running tally on the nimrod motion?

Blog 1. Nimrod 0. — Garth

#4 Lawn (South) Asian on 02.15.12 at 10:10 pm

And then you have this…

http://news.ca.msn.com/local/britishcolumbia/home-foreclosures-skyrocket-in-kelowna

I was thinking of vultching some lakefront property in the next 5yrs… lol…

#5 not 1st on 02.15.12 at 10:15 pm

Won’t be long for the GTA meltdown to begin after the province got the real word on their 3rd world status. Hello Greece.

http://www.theglobeandmail.com/news/politics/drummond-delivers-gloomy-wake-up-call-to-ontario/article2339489/

#6 zman on 02.15.12 at 10:20 pm

almost first

#7 blase on 02.15.12 at 10:21 pm

I google street-viewed that $1.7 million Toronto property from yesterday’s blog post. Looked like a street in Calgary! Hardly any trees, narrow street. I know it’s close to things, but geez. Love the little hobby house beside it, granny inside must be laughing at the price of her neighbor’s chateau!

Question to the blog dogs in Ontario: What is London, Ont. like to live in? Thinking of moving back to Canada in a couple years from Korea, could buy a 3 bdrm 2 bath house there for under $230,000, we could slap down $100,000 for a downpayment, put another $100,000 in investments, get a couple homestay students from Korea for $2,000/month, and I would work. Wondering about the city, jobs (could live comfortably on $30-$40,000/year). Any input on life there would be greatly appreciated! P.S. my dad lives in Hamilton, so thinking it would a reasonable distance away, but not too close!

#8 DUI on Money Road on 02.15.12 at 10:24 pm

He sucked. He blowed. He cajoled, and tried contrite. But in the end he just irritated. The vote was utterly democratic, overseen by impartial observers from Syria and North Korea, and the results are crystal. You are off the island, dude. — Garth
———————————————————
In case you missed it. Effing LOL man.

#9 East Van on 02.15.12 at 10:25 pm

A few months ago my friend’s kids moved out. I tried talking him into selling his house in Coquitlam and renting. He took a few weeks off work to do some painting to get it ready to sell. I saw him today, and he said he bought a condo presale, and will wait to sell his house until the condo is built in 2014.

I fear he bought at the top and will sell near the bottom…

#10 DUI on Money Road on 02.15.12 at 10:28 pm

#7 blase on 02.15.12 at 10:21 pm
——————————————-
London’s nice (known as the ‘forest city’), it’s not all built up like other cities (lots of house and low rises, although there are apartments). It’s also a big university and college town (Western, King’s etc.), so you’ll have a lot of drunk young people downtown on the weekends. But I’d chose Hamilton, much closer to T.O., CFL team, and the possibility of getting an NHL franchise, Niagara region just down the road, beaches and fishing on lake Ontario etc.

#11 AACI Okanagan on 02.15.12 at 10:29 pm

About 30% of my business is foreclosures, that is the highest I have seen it in the 25+ years I have been doing this. I just appraised a farm owned by a single lady who is a cleaning lady, she has a $600,000 mortgage on the place and she is being foreclosed on.. how does a cleaning lady qualify for a $600,000 mortgage.. the system is broken

#12 Rafinator on 02.15.12 at 10:32 pm

Well with forclosures popping up everywhere in the Okanagan, I think it’s safe to say that it’s a crashing market.

http://www.cashmoneyinvesting.com/article/2012/02/what-fuels-real-estate-bubble

#13 Devil's Advocate on 02.15.12 at 10:34 pm

#247Devore on 02.15.12 at 8:44 pm
#242 Devil’s Advocate

You know what I want, hmm? Why am I not surprised.

No. I am quite sure I do not know what you want. Why don’t you repeat it in clear unmistakable terms that I may then reiterate it back to you such that you can then confirm that I do, in fact, understand, or not as the case may be, what it is you want. Once we have established I have a clear understanding of what you want I will answer your question. You may then confirm that my answer addresses your question or not. Because if you ever did ask me such a point blank question as you suggest you did it was so long ago in these blogs that I care not to waste the time looking for it. So rather than continuing this dance let’s just cut to the chase.

#14 Hoon on 02.15.12 at 10:35 pm

You’re still here.

#15 Brenner on 02.15.12 at 10:35 pm

London is great, but there is a reason you can find housing there cheap. Its too far from the GTA for the madness there to have an impact and good luck finding a job.

#16 Eggy man on 02.15.12 at 10:41 pm

It’s a real pity what Vancouver has become. I haven’t lived there since the late 90’s but even then one could feel how shallow the city was becoming. High real estate prices have ruined the city. I used to view it as probably the best place to live on the planet, but now I would gravitate to smaller cities that are not consumed by a financial pyramid schemes. Vancouver used to be cool… Now it’s just full of financial insects with their creepy blonde wives.

#17 DUI on Money Road on 02.15.12 at 10:41 pm

#214 Canadian Watchdog on 02.15.12 at 5:29 pm
——————————————————-
Isn’t it funny how humans are so reactionary (and not proactive)?

Successive Ontario governments have just kicked the can down the road, hoping that the economy would perpetually increase in robustness. Now that manufacturing is leaving in droves, and as you pointed out we’re on Moody’s credit watch, the penultimate minute is now. This is definitely an interesting time to be an Ontarian.

#18 DUI on Money Road on 02.15.12 at 10:43 pm

#12 Devil’s Advocate on 02.15.12 at 10:34 pm
————————————————-
Anyone sense some sexual tension building up in here?

#19 blase on 02.15.12 at 10:44 pm

Thanks DUI on Money Road!

Noticed houses are quite a bit more money in Hamilton though. Don’t care about the sports; aren’t there beaches close enough to London? I grew up in Calgary, so don’t know what a beach is, Ontario is like a foreign country, so pardon my ignorance, just know from pictures it looks infinitely nicer (and cheaper!) excepting for Toronto of course.

#20 René Kabis on 02.15.12 at 10:47 pm

You know the exploding rate of Foreclosures? It’s actually quite funny. With it being about the Okanagan, that is.

From about 2005 onward, I posted quite a bit on the Castanet forums (the local news site) about how Kelowna home values were wayyy too high, and that we were in for a catastrophic collapse, and that the rate of foreclosures would be one of the first signs of an impending collapse.

From the moment I started to post on their forums, I was overwhelmed by bubble deniers who openly mocked me. There was at least a 20-to-1 ratio of bubble deniers that openly refused to believe that home prices could ever crash, compared to those who said I might be right.

In fact, one of my threads (started in December of 2007) became one of the biggest ever on Castanet (5,665 posts) before someone politely asked to have all threads dealing with Real Estate deep-sixed into the smallest, deepest and least-visited part of the forum. Even though most of said threads were clearly about Kelowna, and had nothing to do with the “Economic Crisis” category they were thrown into.

In the end, the subject ended up getting as many visitors in a month as it used to get in a single day when it was in the Kelowna category of the forum, so it was painfully obvious to me how loudly money talks, especially money of the advertising variety.

What I find so amusing now is how so many of the hard-core bubble deniers have been quietly changing their tune, even up to the point of denying that they were ever bubble deniers. Yes, Dirtrider, I’m looking squarely at you. Nice for you to finally realize that things are NOT different here.

Oh, and that news article that is all over CBC.ca and other news organizations, about how the number of foreclosures in the Central Okanagan have pretty well exploded? Not a sign of it on Castanet’s front page yet as of 2012-02-15 1841hrs UTC-8. In fact, a Google search shows that the news isn’t even on the site, just on the forums.

And yet, they’ve got OMREB-authored “news articles” about increased housing starts in the North Okanagan.

Oh, yeah. Money talks, all right.

#21 Van guy on 02.15.12 at 10:48 pm

No Tsur. Yes Garth!

#22 Van guy on 02.15.12 at 10:54 pm

#9 East Van on 02.15.12 at 10:25 pm
A few months ago my friend’s kids moved out. I tried talking him into selling his house in Coquitlam and renting. He took a few weeks off work to do some painting to get it ready to sell. I saw him today, and he said he bought a condo presale, and will wait to sell his house until the condo is built in 2014.

I fear he bought at the top and will sell near the bottom…
_____________________________________________

I hope you have room in your house when he needs a place to stay. He’s screwed already.

#23 The BioTech Guy on 02.15.12 at 10:58 pm

“So how do we square this growing body of evidence of housing angst with bidding wars for North Toronto shacks …”

You are right Mr. Turner. No need to square this. We just need to know the way forward in this fog.

Today a house on my street went on MLS for 3 (three) times what I paid for my (better) shack years ago.

On neighbouring street another house sold above the list price in a week.

Selling , then, seems a no brainer. Alas wife, kid and a dog have to live somewhere. It is the next move that I am really worried about.

#24 John East side on 02.15.12 at 10:59 pm

Sally, this ones for you:

Why leave the best place on earth?

http://www.youtube.com/watch?v=CuOC0kH_Ado

#25 Spiltbongwater on 02.15.12 at 11:01 pm

Vancouver is one of the greenest cities in the world and people want to live here because of that. Sustainability is so strong some people actually eat the petting zoo animals.

#26 Herb on 02.15.12 at 11:01 pm

Good pic of Smoking Man. He’s actually better-looking than I thought.

#27 shanks on 02.15.12 at 11:06 pm

what happens to all those people who took out a 40year mortgage if/when the 30 year mortgage is killed off? will they have to renegociate their mortgage into a 25year amo?

Upon renewal. Surprise! — Garth

#28 Van guy on 02.15.12 at 11:09 pm

poco,

Go back to Larry’s blog now. You just learned something new today.

#29 Deano on 02.15.12 at 11:10 pm

#7….Brantford is a good spot (though I’m partial). 200k buys a pretty nice place in a decent neighbourhood. 260 buys a nice house in a beautiful neighbourhood. That being said, I think prices will come down a little here. Not as much as the big centres, but I wouldn’t be surprised to see 10%. It’s also a little light on listings here right now. A sign of things to come maybe.

#30 Renting in the GTA on 02.15.12 at 11:21 pm

Real Estate is as HOT as Jeremy Lin and the Knicks…
But they will eventually lose and so will Real Estate…

http://www.youtube.com/watch?v=rR3NhE8fBs8

#31 nice read on 02.15.12 at 11:21 pm

especially well written today, garth.

#32 vancouver the hamlet on 02.15.12 at 11:23 pm

#25 Spiltbongwater

Vancouver is a city?!?!?

And all this time, I thought it was a village.

No wonder it’s different there ;)

#33 Form Man on 02.15.12 at 11:26 pm

#13 DA

I think you forgot your meds…….

The Okanagan is a ‘retirement area’……..another way of saying the place where people go to die…………..

#34 Snowboid on 02.15.12 at 11:29 pm

#20 René Kabis on 02.15.12 at 10:47 pm…

I followed your posts on their site, and the crappy way you were treated.

I had posted a few times there as well, but was banned. When asked what I did the forum moderator couldn’t remember and had no record of why.

At that point I realized I must have said something to offend the RE gods that back Crasstanet.

Anyway, appreciate your diligence in following the RE market there and all the work you put into your posts.

#35 Puzni on 02.15.12 at 11:31 pm

Here is an interesting article that thinks ” The low number of listings means there could be a rush of sellers trying to capitalize on the spring market ” , worth a 30 second read anyways:
http://www.theglobeandmail.com/report-on-business/economy/housing/housing-cools-as-sellers-hold-back/article2339028/

#36 Brew on 02.15.12 at 11:33 pm

@#19 Blase

London is a good city and close to two famous beaches, Port Stanley a half hour away and Grand Bend an hour away and on two different lakes. You can actually eat the fish but I wouldn’t touch the fish from Hamilton Harbour. If you need or want to go to Hamilton or Toronto it’s only an hour and a half to two hours down the road. Then you only have to put up with the ever present traffic jams occasionally.

Brew

#37 John Prine on 02.15.12 at 11:33 pm

#13 DA.

Blablahblahblahblahblah…200 words just thrown together, amazing.

#38 palebird on 02.15.12 at 11:34 pm

#10 Are you serious? Beaches and fishing on Lake Ontario? Go for it buddy..

#39 45north on 02.15.12 at 11:35 pm

But foreclosures have an even bigger impact on sellers.

US banks have kept distressed homes off the market. I don’t know if Canadians banks can do the same. I mean a Canadian bank can hardly ask CMHC to pay its losses on a delinquent mortgage if it hasn’t foreclosed.

Up on the Hill, Jim Flaherty is writing the budget. Pros and cons. Jim make the cuts.

#40 Form Man on 02.15.12 at 11:38 pm

#20 Rene and #34 Snowboid

agree with you about Castenet. This is the same webpage that recently supported a pro-development slate for city council……because what Kelowna really needs right now is more development……I kid you not………help me, I need some of the meds that DA forgot to take……..

#41 mid-Ontario on 02.15.12 at 11:38 pm

“The market in the Okanagan has really come to a standstill on that speculative investment front…”
————————————————————-
Speculative investment is not driving the RE market across Canada. There is no reason to believe a slowdown in the speculative market areas will bring RE down across Canada.

I await a bigger reason for a significant RE correction nation wide.

The reason is not evident yet.

#42 TurnerNation on 02.15.12 at 11:40 pm

Re. today’s blog picture – I always knew it, American beer tastes like dog pizz.
Throw another shrimp on the barbie.

#43 inmississauga on 02.15.12 at 11:40 pm

Garth, I noticed today that 5304 Glen Erin Dr is sold. Wonder how much it sold for and the DOM?

#44 Devil's Advocate on 02.15.12 at 11:42 pm

“But foreclosures have an even bigger impact on sellers. It ain’t pretty. Suddenly there are dozens and dozens and dozens of houses thrown on the market by banks which care only about covering their loans. The effect on prices can be chilling. It was a wave of similar bank-forced sales in the US which infected entire neighbourhoods and subdivisions. Dwindling numbers of potential buyers were sucked off to the bargains, leading all sellers into a race to the bottom. The final destination was negative equity for close to a third of all families.” – Garth

Might want to bone up on your understanding of the foreclosure process. Even if the lenders were able to blow out those delinquent properties the market tends to dictate that the price gets bid up. I recently watched a local property go before the courts only to end up selling for $100,000 over the list price. Foreclosures selling for more than list price tends to be more the rule than the exception. In any event the lender is pretty much obligated to push the property through in a manner as to make their very best effort to achieve the highest price possible. Should they not do so they jeopardize their interest in the property as the courts tend to frown on that kind of thing. Believe it or not debtors still very much maintain an interest in the property too and the courts are cognitive and protective of that interest.

In fact I have a client who is going through the foreclosure process right now. That client has more than 70% equity in the property. So why are they letting it fall into foreclosure? Well aside from the fact that their credit has already taken the hit, through the foreclosure process all the vultures are attracted to the property and in the frantic feeding frenzy and ruffelling of feathers they start bidding against one another driving the price up higher than it might ever go through the MLS. In any event the delinquent mortgagor can always step in up to and on the court date and halt the process as any bidder. There is more to this particular case – I just tell you these particulars to make a point – foreclosures are usually not such wholesale carnage for anyone but bidders.

Bottom line, your earlier comments about the number of foreclosures in Kelowna are not so far wrong and they have not in any way affected the market here I assure you. As I mentioned in yesterdays blog there have been 126 residential sales in Kelowna this month to date. The same period last year yielded 125. Nothing has changed. Nothing.

#45 DUI on Money Road on 02.15.12 at 11:43 pm

#38 palebird on 02.15.12 at 11:34 pm
——————————————-
Huh?

Beach:
http://www.barangas.ca/

Fishing:
http://www.salmonexpress.com/about_salmonexpress_fishing.htm

#46 shanks on 02.15.12 at 11:44 pm

Upon renewal. Surprise! — Garth
WHAA, this IS going to be bad… maybe not for me personally in that way, but for a lot of people I know for sure.

#47 eviee1973 on 02.15.12 at 11:49 pm

Alway wondered how the real estate economy in Kelowna took off after Daimler closed the Western Star Trucks plant in 2002. Must have something to do with the magic forests in the area.

#48 Mr Buyer on 02.15.12 at 11:49 pm

The Bubble has topped…
Universal Health Care is essential.
…Buy now before everyone can afford to…
…and they landed softly ever after….

#49 Devil's Advocate on 02.15.12 at 11:49 pm

“Oh and what about prices?!?” I hear you cry in refute of the last two lines of my previous post. Well they too remain constant. This month to date the average price of those 126 residential properties sold was $367,085. For the same period last year it was $363,839. Now you tell me what to make of that?

#50 MrHulot on 02.15.12 at 11:55 pm

I was taking a pee and I could see through the small window, a new black Mercedes sedan driving up to check out the south-side West Van half-constructed view property right across ours. A well dressed, typical thirty-something smarmy West Van real estate type with the perfunctory five o’clock shadow, plus, a high-heeled Prada-wearing Chinese concubine exited the car.

As I was zipping up, I noticed her instead motioning to our house. Whereupon the Agent walked up to our front door and rang the door bell.

I could smell the cheesy perfume before I opened the door. Before he could ask me if I was interested in selling my house, I told him to F-off.

Of course, I didn’t tell him it was a rental.

#51 Pacific on 02.15.12 at 11:55 pm

Really enjoy reading your blog, Garth. And I couldn’t agree more.

Also really impressed by your writing, and ability to churn out well-researched and entertaining op-ed pieces night after night.

Interesting to note, I am a Vancouverite but have several friends in Toronto, many of whom are also fans of yours (and no I didn’t put them onto it).

It really is a shame that the media relentlessly quotes shills (I can’t think of a better descriptor) like Tsur Sommerville, Helmut Pastrik (who completely missed the US RE crash) and of course, Cam Muir, he formerly of CMHC and now CREA.

In our discussion with ‘media types’ we were told in no uncertain terms that bearish RE commentary was discouraged at the best of times. They know who butters their bread.

#52 poco on 02.16.12 at 12:00 am

#13Devil’s Advocate on 02.15.12 at 10:34 pm
No. I am quite sure I do not know what you want.
____________________________________________

how about you post the price changes that appear on the OK mlsexchange for one week–not vetted like i fear you would do–and the previous purchase price–that might be a good start–or you could just tell us how many sellers per week who will be bringing a cheque to the closing upon selling—real numbers–not percentages

ya if we’ll ever see that

i imagine the numbers would be greater than the tri cities where we have 35 to 45 per week –all downward–and did you accept that challenge

#53 Devil's Advocate on 02.16.12 at 12:00 am

#40 Form Man on 02.15.12 at 11:38 pm
#20 Rene and #34 Snowboid
agree with you about Castenet. This is the same webpage that recently supported a pro-development slate for city council……because what Kelowna really needs right now is more development……I kid you not………help me, I need some of the meds that DA forgot to take……..

That’s not the kind of development we were after Form Man. The kind of development we are after is the kind that brings jobs to the Valley. Commercial development precedes industrial development. We need industry, ideally clean industry, which will provide good jobs to the young people we need to be able to retain here.

We have lost a lot of good employers over the years and we need to replace them. That is what this progressive new council is about. It’s not about resurrecting your business of building senior focused housing – that we have plenty of already.

#54 Bill Gable on 02.16.12 at 12:02 am

The best summation of where we are – and where we are going.

This blog is a gem.

Thanks.

#55 Devil's Advocate on 02.16.12 at 12:04 am

#37 John Prine on 02.15.12 at 11:33 pm
#13 DA.

Blablahblahblahblahblah…200 words just thrown together, amazing.

132 actually.

#56 Peterfromcalgary on 02.16.12 at 12:05 am

From the New York Times:

“WASHINGTON — A string of aggressive gestures by Iran this week — assassination attempts on Israelis living abroad that were attributed to Tehran, renewed posturing over its nuclear program and fresh threats of economic retaliation — suggest that Iranian leaders are responding frantically, and with increasing unpredictability, to the tightening of sanctions by the West. ”

http://www.nytimes.com/2012/02/16/world/middleeast/frantic-actions-hint-at-pressure-on-iran-leaders.html?_r=1&hp

Wow hope the fecal matter hits the fan before the election then Americans can blame $20 per gallon gasoline on Obama for cancelling the Keystone xl pipeline. President Romney has a nice ring to it.

Keystone XL built has an even nicer ring to it. Sounds sort of like cha ching!

#57 sluggo on 02.16.12 at 12:10 am

After about a 2 year sabbatical from any West Side project, I was shocked to see the number of For Sale signs on Marine Drive between Dunbar and Granville in close proximity to my next project.

If the realtor signage is any indication, HAM is getting cold and these aren’t the $ million crack shacks the poor speculators are buying, these are more like the cartel’s head quarters which cut a swath of misallocated leverage from Southlands through Kerrisdale.

Ground Zero

http://www.realtor.ca/map.aspx?&vs=VEResidential&beds=0-0&baths=0-0&minp=0&maxp=0&area=vancouver&trt=2#acr:false;ac:false;baths:0-0;beds:0-0;fp:false;gar:false;pmin:0;pmax:0;rmin:0;rmax:0;openh:false;pool:false;stories:0-0;buildingstyle:;buildingtypeid:;viewtypeid:;waterfront:false;forsale:true;forrent:false;orderBy:A;sortBy:1;LisStartDate:;mapZ:14;page:1;mapC:49.224520472658355, -123.15454959869385;curView:;curStyle:r;leftMin:false;rightMin:false;chkSchl:false;chkTran:false;chkPol:false;chkMed:false;chkWrk:false;chkFire:false;chkAll:false

#58 Form Man on 02.16.12 at 12:15 am

#45 DA

excellent post !
the winds of reason are once again opening your mind

#59 sluggo on 02.16.12 at 12:15 am

Ground Zero

http://www.realtor.ca/map.aspx?&vs=VEResidential&beds=0-0&baths=0-0&minp=0&maxp=0&area=vancouver&trt=2#acr:false;ac:false;baths:0-0;beds:0-0;fp:false;gar:false;pmin:0;pmax:0;rmin:0;rmax:0;openh:false;pool:false;stories:0-0;buildingstyle:;buildingtypeid:;viewtypeid:;waterfront:false;forsale:true;forrent:false;orderBy:A;sortBy:1;LisStartDate:;mapZ:14;page:1;mapC:49.224520472658355, -123.15454959869385;curView:;curStyle:r;leftMin:false;rightMin:false;chkSchl:false;chkTran:false;chkPol:false;chkMed:false;chkWrk:false;chkFire:false;chkAll:false

#60 Devil's Advocate on 02.16.12 at 12:18 am

#52 poco on 02.16.12 at 12:00 am
#13Devil’s Advocate on 02.15.12 at 10:34 pm
No. I am quite sure I do not know what you want.
____________________________________________

how about you post the price changes that appear on the OK mlsexchange for one week–not vetted like i fear you would do–and the previous purchase price–that might be a good start–or you could just tell us how many sellers per week who will be bringing a cheque to the closing upon selling—real numbers–not percentages

ya if we’ll ever see that

i imagine the numbers would be greater than the tri cities where we have 35 to 45 per week –all downward–and did you accept that challenge

Ya right. Hey tell you what…. I’ve got a BRA you can sign and I’ll do all that and more.

#61 Uh Oh Canada on 02.16.12 at 12:20 am

Garth- Can we vote someone else off the blog?

#62 Soper Eats Babies on 02.16.12 at 12:23 am

@ #15 Tenemos — (from Monday’s blog)

“Worst case, Vancouver will simply see a multi-year flatline while inflation catches up to house prices, followed by a renewed march upwards. They aren’t building any new land in Canada’s only year-round city are they?”

They aren’t building any new land in California’s year-round Bay Area cities either, where urban spaces are hemmed in by sea, mountains and parks. Crashed and still burning:

http://housingbubblebust.com/OFHEO/Major/NorCal.html

#63 Axehead on 02.16.12 at 12:28 am

#7 Blase. London is a pleasant city, good restaurants downtown, big enough to get most things you need, good highway access to 401/402, lots of trees, dirty river (the Thames, like London England) and cheap housing…but you have to fight all those university students for work and jobs…and they get wicked thunder storms, sometimes tornadoes there in the summer. If you work there (probably in Insurance industry) then it’s a good place to live.

Here in Calgary, I am seeing a lot more retirees competing with the homeless for the thriving bottle return industry. Everywhere you look there are older people digging in the garbage for bottles, some right downtown in bankers alley brushing elbows with bank executives who just dumped their Snaple in the recycle bin. Many of those who will loose their overpriced home and forsaken saving for retirement will end up like this…but be forewarned – the competition is already fierce.

#64 poco on 02.16.12 at 12:32 am

#28Van guy on 02.15.12 at 11:09 pm— or is it now bubble boy–you use a different handle on every blog you post on

come on man, don’t tell me you didn’t know about the Land Transfer office–it’s in New West–been there a few times
tell me –when you sold your condo or any of your condos?? who discharged the mortgage???-bet the bank did or who ever held your mortgae

did you know that you can do it yourself?–at about one tenth the cost–you just stand in line for an hour or so–do you know who does it for the banks??–the local courier–who else–the banks make a killing

#65 Nick on 02.16.12 at 12:38 am

Tough time coming soon:

“Another piece of telling data: As of the end of September the CMHC had guarantees on $541-billion of outstanding home loans — roughly equivalent to the Canadian federal debt and just shy of its government mandated $600-billion cap.

The sudden jump in demand for so-called “bulk insurance” on securitized home loans took even the CMHC by surprise. It acknowledged last last month that due to “an unexpected level of requests” it is establishing “an allocation process” (aka: sharp reduction) for big lenders so it can keep doling out insurance to average Canadians.

Meanwhile, the government led by Stephen Harper, which is deeply worried about runaway consumer debt, is said to also be leaning on the CMHC to curtail bulk insurance.

“There has been increasing speculation that upcoming legislation will not permit the use of CMHC insured mortgages as collateral,” said BMO Capital Markets analyst George Lazarevski.

Whether such a move will have the desired impact remains to be seen but it’s further evidence of the dilemma the government finds itself in as it struggles to rein in consumer borrowing without destabilizing an already frothy housing market.”

http://business.financialpost.com/2012/02/15/housing-crutch-abandoning-banks/

#66 Mr. Lee on 02.16.12 at 12:40 am

friggin nuts…

http://11skelton.com/

check it out… i know the realtor… he just sold this home.. 23 offers and it sold for 110K over asking.

is this craziness or what?

#67 Big Mike on 02.16.12 at 12:47 am

Well the good thing is austerity measures in Ontario wont hinder the boom there.

They have to Leafs to keep the spirits up.

#68 Rigged on 02.16.12 at 12:47 am

It’s comical. This “dream home” in surrey is “one of the BEST that south surrey has to offer” and it is only 2.5M oh wait, reduced to 2,388,000 after a week.

http://www.realtylink.org/prop_search/Detail.cfm?MLS=F1202682&REBoards=All&From=MLS

Also funny how every listing has as many 8’s as possible in the price like some HAM will be drawn to the magical 8’s in the price. Looking forward to the pop.

#69 Smoking Man on 02.16.12 at 12:48 am

sluggo,

You aint got any idea friend, of how bad things are about to get in Chinatown (VanWest).

Hold on, the ride down is a steep one.

#70 new-era on 02.16.12 at 12:49 am

Spiltbongwater on 02.15.12 at 11:01 pm

Vancouver is one of the greenest cities in the world and people want to live here because of that. Sustainability is so strong some people actually eat the petting zoo animals.
===================

The only reason why we are one of the greenest cities is because it MJ capital. Can’t you smell the POT

#71 Mike on 02.16.12 at 12:50 am

Van guy & poco:

I’ve been following you two battle it out. You two have issues. First, poco you are wrong about realtors being able to retrieve the original price of a brand new condo directly sold by a developer. Van guy, leave the poor guy alone.

#72 terces on 02.16.12 at 12:53 am

Here’s a link to an interesting old book by Charles McKay about bubbles. One of the chapters is about Tulipmania. This bubble business has been going on a long time!

http://www.econlib.org/library/Mackay/macEx3.html#Ch.3, The Tulipomania

#73 nonplused on 02.16.12 at 12:54 am

Too late! As you put it Garth; Horse. Barn.

I only bought because I followed all the Garth rules for vultching as best I could, and because MF Global seriously worried me. If money in seggregated accounts can “vapourize”, the system is screwed. And still not one single indictment. Not one.

#74 Carpe Diem on 02.16.12 at 12:57 am

Spiltbongwater

I lived in Vancouver for 14 years until 2008.

1. From the edges of Stanley Park to Chilliwack – where exactly is it green? OK I love the endowment lands for mountain biking or Stanley Park when I live downtown. West Van sucks aside for a couple of trails around cypress. North Van thinks it is West Van in home prices with The Grind and Lyne Canyon Suspension bridge. But in the end, these do not justify the city being green or home prices.

2. Looking southward. Richmond might have been considered green 20 years ago but now is a swamp that was paved and condos or mega-home cemented on top. I remember what the Olympia, USA earthquake did to the #4 road in 2001. Delta to US border = 1 + hour to get downtown – ouch!
3. All the farms in the Fraser Valley spread chemicals on their lands – how green is that and are the affects to the delta? How about all the Vancouver pollution going the Fraser Valley?

4. Prices are crazy….

I left in 2008, live in Ottawa and with the greenbelt, 10-20 minutes to parks (ski hills, mountain biking and trekking), 20 minutes to rural townships and in the west the high lands and sure beats Vancouver. Plus home prices are cheap and if you sail, you can either take a weekend going up/down the Ottawa River or sail for weeks on lake the Great Lakes that is not far away (1-2 hours) Ski hills in the area are pretty good – the best being Trembent being 2 hours away.

No wonder Money Sense Magazine rates Ottawa #1 place to live in Canada. It just makes a lot more sense than Vancouver with its gang violence, grow ups in the house down the street, crystal meth kids floating all over the place (easy to spot if you are looking), and people drowning in debt.

Me … no debt. 20 minute from downtown renting 2 acres mansions and being very diversified these days.

Don’t spill too much water, cause it stinks.

#75 AACI Okanagan on 02.16.12 at 12:58 am

#44 Devil’s Advocate on 02.15.12 at 11:42 pm

Bottom line, your earlier comments about the number of foreclosures in Kelowna are not so far wrong and they have not in any way affected the market here I assure you. As I mentioned in yesterdays blog there have been 126 residential sales in Kelowna this month to date. The same period last year yielded 125. Nothing has changed. Nothing

I call BS and I can support the negative impact that foreclosures have on values in ALL of the Okanagan. Sales volume is the same as last year, Yes, but that has not stopped the downward spin on values we are experiencing. What we are seeing now is bottom feeders picking off the low end which is causing downward pressure within most sub-markets. This is not a normal market by any means. The gap between the mid stream and upper end homes is getting too close and something has to give, and I don’t think we will see price increase within the upper end so the pattern I see is more price reductions in the mid and low end. Again, just because sales volumes is the same as last year does not mean the market is back to the norm. regards

#76 J on 02.16.12 at 12:59 am

Devil’s Advocate. You are a realtor or a realtor’s assistant. You can almost smell the desperation in your posts.

#77 West Coast Woman on 02.16.12 at 1:02 am

sluggo @57

It’s the same all over the west side. Despite all the hype, and 10 listings (mostly flips) in my immediate neighbourhood, I haven’t seen any HAM purchasers roaming the streets like they were last year.

One other thing that’s not been reported it the number of vacant houses all over the west side. Houses purchased as “investments” (i.e., to flip) that are just sitting there empty waiting for prices to go up, or so that they can be demolished to build another 8 bedroom, 8 bathroom unaffordable house. There are at least 10 of these in my area as well.

#78 Carpe Diem on 02.16.12 at 1:05 am

49 Devil’s Advocate

It equates to 1.1% ROI … wow … zzzzz

#79 Canadian Watchdog on 02.16.12 at 1:05 am

CMHC – THE HIDDEN RISK

I discovered something alarming this past week with a little research on CMHC’s LTV portfolio allocation, along with some major risks attached that should have been sounding off alarm bells like yesterday. CMHC claims its portfolio is risk-free to tax payers and is mitigated by hedging with derivatives and other protective measures, however one look beneath the layers reveals all that is there, or not.

Based on the information I could obtain from their annual and quarterly reports; in 2009 CMHC’s portfolio held approximately 38% of mortgages that were +80% LTVs; in 2010 that share increased to 43%, almost half its portfolio; in Q3 2011, the total share of +80% LTVs had decreased to 28%. Good news right? Not so fast.

In recent reports, CMHC stated borrowers have been adding more principle above their maximum payments, but with their share of +80% LTVs going from 43% in 2010 to 28% in 2011, it’s impossible so many could have contributed that amount, which leads to the next scenario; with the recent announcement of banks cutting out non-stated-income loans (you know all those freshly landed immigrants and self-employed individuals they were streamlining), begs to question if their lower LTV portfolio share was due to more quality borrowers. I highly doubt it.

https://p.twimg.com/AlLLkFBCQAMcMpM.png:large

So what happened? Their low LTV portfolio share increased to 72% because CMHC calculates appreciated home value as equity, so higher home prices shifted high LTV loans into the lower bracket, which is credible to some degree, but, this also means if house prices were to decline back to 2010 levels (5-10%), this would put their +80% LTV portfolio share back to a 35-40% range, and with the latest borrowers now underwater creating a snowball correction, anything beyond a 10% correction becomes a full scale AIG collapse.

Now when you’re an institution that only holds $12-14 billion in total equity to cover nearly $530 billion in liabilities, well…you know how the rest goes, we’ve seen this before…

#80 Mr Buyer on 02.16.12 at 1:11 am

Devil’s Advocate…So why are they letting it fall into foreclosure? Well aside from the fact that their credit has already taken the hit, through the foreclosure process all the vultures are attracted to the property and in the frantic feeding frenzy and ruffelling of feathers they start bidding against one another driving the price up higher than it might ever go through the MLS
……………………………………….
So let me see if I get this correct. Foreclosure is a good thing for house prices. Well I am starting to think you are saying things you do not truly believe. Why even have MLS. Lets just stop paying our mortgages when we want to sell. You have succeeded only in that you may have extended the hypnotic state in some buyers out there but I am not convinced foreclosures are the way to drive up house prices. You got your message posted twice on the blog comments and I think that after all was your purpose. The mythic vultures that prefer to wait wait wait to spend more money then they otherwise would. Nice try.

#81 Canson on 02.16.12 at 1:17 am

To the poster asking about London, Ontario: the price is definitely right but I would rent there first and see if you like it and which part you could live in. Ontario is a whole other thing compared to Alberta. And lordy knows Ontario is having some trouble. There is a lot of unemployment and bit of anger going on there in London but if you end up in a neighbourhood you like you’ll be alright.

#82 SafetyBear on 02.16.12 at 1:31 am

http://safetybear.voot.com.au/

In Australia what was first a Mexican standoff has turned into little upticks for the economy and hosuing. We’ve reached what I am calling the Bull Trap phase, the most dangerous and deceptive of them all. Yet housing is up and unemployment is down to 5.1%. I must just be wrong I guess. Would be very honoured if you would read this hopelessly out of its depth blog, Garth and G’day from Canada’s southern hemisphere bubble brother.

#83 Nmh on 02.16.12 at 1:34 am

Bnn posts 4.5 % decrease in existing home sales in canada for January 2012, source : CREA….
I did a quick search on kijiji.ca, and found over 2500 advertisements for condos for sale. In GTA. Most of which are private listings.
Nice!!!!!!

#84 Waterloo Resident on 02.16.12 at 1:37 am

(not even close to being ‘FIRST’ ! )

#85 John G. Young on 02.16.12 at 1:39 am

#7 blase

London is great if you’re Caucasian, Christian and straight.
Otherwise, not so much.

#86 John G. Young on 02.16.12 at 1:53 am

#7 blase

Oh yes, and being a royalist helps too.

#87 Lee on 02.16.12 at 1:54 am

I wouldn’t ask a crack dealer if I should start smoking crack; why would I ask a realtor/realtress if I should buy a house?

#88 Nostradamus Le Mad Vlad on 02.16.12 at 1:55 am


“Wasted. Horse. Over. Barn. Clearly we’re running out of birds in a spasm of common sense rarely witnessed that elfin pugilist F is as much a part of young couples lives as edible bras.”

At least F is progressing, but no one is quite sure where to or what in.

“First, the speckers, flippers and HGTV porn addicts have been crushed. Wiped out, exploding household debt, too-cheap rates . . .” — That is one major reason behind the 4closures in the Okanagan, with individuals becoming too greedy for more without bothering to repay that debt.

Who gave people the right to take on huge amounts of debt (via cheap rates), but didn’t bother to tell them of the consequences if that debt wasn’t paid back? Seems there are two parties at fault here.
*
China selling off US treasuries, and Russia; Iran “Iran has the third-largest oil reserves and pricing oil in currencies other than dollars is a provocative move aimed at the US.” March 20 is when they start. Remember Iraq was about to do the same thing; Soros — sound familiar? “Corporate-fascist feel-good scam seeks to crush competition & establish global monopoly.” and Soros Gold; When one door closes, another opens, but 1.1 mln. women unemployed in UK; Ontario’s debt Can be applied to all provinces, which is why I would prefer renting as all bills are heading north; Syria Libya was raped, looted and pillaged for their resources. Same for Syria (except Russia’s in the way); 9:55 clip The goal is a junk recovery, to put us into the poorhouse; Portugal’s warning for Greece; Saving for Retirement This lady has started (at least); Car Sharing is sweeping NAmerica.

Smoking Man — Recall you said you collected nickels, and this; 13:56 clip Life is not getting any easier in the west; Not Hiring; Japan wrecking the yen, and 2008 continues; N.Gas A contrarian view; Correction Time; The Decline and Fall of the Roman Empire More like the west; 4:01 clip Austerity vs. Stimulus, a.k.a. Baffle ’em with bullshit; Immigration Look at Chile; Foreigners dumping US debt; The Money Masters Living in fear; Thorium instead of uranium. Possible uranium shortage by 2016.
*
US nukes The first few sentences are good. If one reads between the lines, realizes that Soros / Obama wants to kill the 2nd Amendment (no guns), it seems to be setting the US up to be taken over; Monsanto A picture is worth a thousand words; The Next World Order? Lost Clout If Scotland separates; EZone asking Google to do some of its dirty work; Obomba’s gas increase. Yup, change is good (for TPTB); 2:21 clip Ghost towns of Fukushima; CC 650 dead; Link in Ron Paul quietly taking over the GOP? Aston Martin 1-77 “First, they gave it a 750 horsepower V12 and then they decided to only ever build 77 of them.” Hummer material, Garth? Secrets of the Universe Hubble pictorial.

#89 Sgip on 02.16.12 at 2:14 am

The only thing i look forward to is steve harper wearing this housing meltdown, finally something to wake sheeple up

P.s. what is your problem on bob rae? Who the heck do you think is going to replace teh neocons anyway?
.

.
.
.

#90 guy from toronto on 02.16.12 at 2:22 am

waaaaiitt a minute

I thought the vote was that DA would stay away?

Now he’s gone and littered this post with a bunch of his hype and arrogance.

Drat.

#91 TRT on 02.16.12 at 2:34 am

“upon renewal, surprise! ” Wrong. Original mortgage amortization remains.

Another thing, something tells me the H gov and the sidekicks F etc. are gonna be a 1 term majority gov. There is no way i see them winning again…

#92 Bobby on 02.16.12 at 2:38 am

So 170 foreclosures and Devil’s Advocate is getting really testy. Is that what he meant by a return to a normal market?

Here in Victoria, a colleague is looking at downsizing to a condo. Looked at a few units recently that were originally marketed at 1 million plus. Now listed for under 600k and still not moving.

I wonder, with over 1100 realtors and an average of under 350 sales the last two months, I suspect most realtors don’t like this new normal.

#93 eagle eyes on 02.16.12 at 2:49 am

what happens to all those people who took out a 40year mortgage if/when the 30 year mortgage is killed off? will they have to renegociate their mortgage into a 25year amo?

Upon renewal. Surprise! — Garth
_________________________________

Someone correct me if I am wrong. I usually am not. From my knowledge if you do not change the amount/terms of the mortgage when it comes time to renew, if you have a 30/35 yr mortgage you will be able to continue with it. Any mortgage brokers out there that can verify this?

#94 poco on 02.16.12 at 2:58 am

Van guy—-heres one of the listings on High St–didn’t get much help from Larry –did you??–don’t know why you are so concerned with this particular complex but many “speckers”have lost big money on these places

http://www.realtor.ca/propertyDetails.aspx?propertyId=11217085&PidKey=-1753349042

read the story on this –check this years assessed value -its over 75k less than asking price-it will never sell anywhere near this asking price–then phone 604-313-8098–tell him poco sent you –ask him the original purchase price in Apr 09—you know this isn’t even 10% off from the original purchase price–many others in this area are 15% down already

if this doesn’t work for you go to the land transfer office –pay the fee–i’ll reimburse you–ya right

#95 Ex-Cowtown on 02.16.12 at 3:38 am

#41 Mid Ontario

Speculative investment is not driving the RE market across Canada. There is no reason to believe a slowdown in the speculative market areas will bring RE down across Canada.

I await a bigger reason for a significant RE correction nation wide.

The reason is not evident yet.
+++++++++++++++++++++++++++++++++++

How about this reason. Buyers are unable to borrow more money. This is not to say that they are “out of money” …. To say they are “out of money” would mean that at some point in time they “had money”.

And they didn’t.

You can only fish down the food chain for so long before even the guppies are cleaned out.

#96 Renting in Kelowna on 02.16.12 at 3:43 am

Seeing that article about Okanagan foreclosures has made me the happiest cat on the block. Too bad I don’t dare post it on Facebook/Twitter due to numerous friends who just bought. I tried telling them…it’s math…1+1 doesn’t equal 3 unless you are talking to the CREA or your local realtor but unfortunately they still hear and believe what they want to believe.

#97 Daisy Mae on 02.16.12 at 6:39 am

“It’s why that elfin pugilist F is on the verge of murdering the 30-year mortgage…”

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

Well, you were right, of course…and now those stupid asses in Ottawa know it.

What amazes me is that there are people out there who STILL think the government is doing a great job. They continue to dismiss the facts, they will not face reality…they just don’t get it.

The world has gone absolutely mad…

#98 jess on 02.16.12 at 7:23 am

Caterpillar
Advantage of Cheaper, Non-Union Labor in Indiana
Tuesday, February 14, 2012
-$12 an hour for assemblers to $18.50 for maintenance technicians.

Between 2005 and 2010, Caterpillar’s overseas workforce grew by 15,900 employees. During this time period, the company added only 3,400 Americans to its payroll.

Once word got out that Caterpillar was coming to town with 460 new jobs, residents of Muncie applied by the thousands, with some showing up at 4 a.m., five hours in advance, outside the company’s offices.
-Noel Brinkerhoff, David Wallechinsky

To Learn More:
Caterpillar Closure Underscores a Growing Export: Canadian Jobs (by Grace Macaluso, Postmedia News)
Progress Rail Grows, Finds No Shortage of Workers (by Rick Yencer, Muncie Free Press)
Corporate Welfare: State Taxpayers Pay to Train Workers for Large Corporations (by Noel Brinkerhoff, AllGov)

#99 jess on 02.16.12 at 7:43 am

All this financial innovation has led to economic growth ? Where is the evidence.

-the inflation adjusted dow average is around the same level that it was in mid to late 1990s
-the income of the typical american family is at the same level that it was in 1996 however unlike in 1996 over 28 percent of american homes are underwater

PDF]
Occupy the SECwww.sec.gov/comments/s7-41-11/s74111-230.pdfYou +1’d this publicly. Undo
File Format: PDF/Adobe Acrobat
8 Feb 2012 – has not followed suit. The inflation-adjusted Dow Jones Industrial Average is around the same level that it was in the mid-to-late 1990’s. 16 …

#100 Ralph Cramdown on 02.16.12 at 7:50 am

Hmm, looks like sales volume in the GTA for the first two weeks of February is going to be lower than last year, which was lower than the year before. Will TREB blame unseasonably warm and dry weather, or unseasonably warm mortgage rates? Oh wait, they’ll blame lack of inventory, of course!

#101 Celine Dion on 02.16.12 at 8:12 am

Garth, as you know, it’s only a matter of time when everyone knows how right you are. No one can argue with you. I tried to tell my family that unless you’re going to spend 25 years in a house, why would you buy it? But then they all got angry and ate their pea soup quietly. Our karoke game still went on but the songs weren’t so much about love but of a false sense of accomplishment. When will they open their eyes?

http://www.youtube.com/watch?v=5WKa83iK7R4

#102 jess on 02.16.12 at 8:40 am

Moody’s puts 114 European banks on downgrade review
Moody’s warned last night that it may cut the credit ratings of 17 global and 114 European financial institutions in another sign that the eurozone debt crisis is spreading throughout the global financial system.

#103 Bobby Brown on 02.16.12 at 9:38 am

“Noticed houses are quite a bit more money in Hamilton though. Don’t care about the sports; aren’t there beaches close enough to London? I grew up in Calgary, so don’t know what a beach is, Ontario is like a foreign country, so pardon my ignorance, just know from pictures it looks infinitely nicer (and cheaper!) excepting for Toronto of course.

London is 40 mins from Grand Bend which has arguably the best beaches in Southern Ontario. We go there all the time in the summer, its a great place to spend weekends. I grew up in Niagara – beaches on Lake Onatario – blah.

#104 Devil's Advocate on 02.16.12 at 9:39 am

#74AACI Okanagan on 02.16.12 at 12:58 am
What would YOU call a market in which both volumes and prices were stable? I merely provided the statistics. What you do with them is your business. Like I said earlier – no one here believes what I report. I get that. It’s their problem not mine.

#77Carpe Diem on 02.16.12 at 1:05 am
49 Devil’s Advocate

It equates to 1.1% ROI … wow … zzzzz

Isn’t that what I alluded to? Zzzzzz

#79Mr Buyer on 02.16.12 at 1:11 am
So let me see if I get this correct. Foreclosure is a good thing for house prices. Well I am starting to think you are saying things you do not truly believe. Why even have MLS. Lets just stop paying our mortgages when we want to sell. You have succeeded only in that you may have extended the hypnotic state in some buyers out there but I am not convinced foreclosures are the way to drive up house prices. You got your message posted twice on the blog comments and I think that after all was your purpose. The mythic vultures that prefer to wait wait wait to spend more money then they otherwise would. Nice try.

I am not proposing that foreclosure is a good thing. But, other than the social stigma that goes with it, there is not a lot of damage done by it – certainly not to prices which are set by the market neither by the banks nor the courts.

It’s got something to do with that fear and greed thing although in this instance it’s the “greed” part of it as the vultures flock to the recent kill. One of the ugliest things I deal with in the marketplace is the inclination for so many to seek to prosper by picking the carcass of an unfortunate other. Why do you think so many REALTORS advertise “Get a Free List of Foreclosures… just call me”? It’s the most attractive of bait it seems. Hideous I know, but true. The Blog Dawgs should understand this better than most as so many of them exemplify these qualities.

Want an education on this? Attend your local courts proceedings. They don’t charge admission. Hell you might even get caught up in it all and want to place a bid of your own. So take a blank contract of purchase and sale along. Oh and another HINT… the initial offer which initiated the court hearing is public information, so you know at what price the bidding will start. Just go to the front wicket and ask they will tell you. It’s a freaking carnival man. Guess which are the clowns – you do have BIG shoes and a BIG round red nose don’t you?

#105 Halifornia on 02.16.12 at 9:44 am

Sounds like Garth is going all-in on the F killing the 30-year mortgage bet.

I had a 35-year, when it was time to renew after they killed it, I was allowed to keep the 32+ year amortization. Existing mortgages must be grandfathered in?

#106 Gord Morrow on 02.16.12 at 9:49 am

Finally someone in the housing industry taking a stand and saying get rid of cheap credit. And yes perhaps the Fed’s will make the 30 year mortgage disappear. But I think we need to go further, much further to get things back to some sense of normality. In a recent post on my blog, “Make it harder to get debt” (http://www.timeandmoneyconnection.com/2012/02/make-it-harder-to-take-on-debt.html), I advocate for the elimination of the CMHC insured loans. If the lender is not willing to assume the risk of the mortagage then the the borrower does not get the loan. Why should the taxpayer have the final responsiblity for poor lending practices. Yes that would mean a need for 20% downpayment, but if you do not have the 20% down you realisitically can not afford the house anyway. The goverment would actually be doing a real service by protecting us for ourself’s and to quote you Garth saving the house horny from their addiction to house porn

#107 McFurnish on 02.16.12 at 10:01 am

@92 Eagle Eyes

According to this link, you’re right:

“I already have an insured mortgage. How will these changes affect me?

CMHC mortgage insurance is good for the life of the mortgage.Borrowers renewing an insured mortgage will not be affected by these changes. For example, if a borrower had a 40 year amortization and there are 37 years remaining on the mortgage, the mortgage can be renewed with a 37 year amortization, as long as no new funds are being added to the mortgage. ”

src: http://www.cmhc.ca/en/corp/faq/faq_008.cfm

#108 Tanya on 02.16.12 at 10:32 am

Blase: I’ve lived in both Hamilton and London … I miss Hamilton, but haven’t been back to London for even five minutes. Both cities have pockets of ‘dirty’, but London has more of it. Hamilton also has some seriously nice people, might be the predominantly blue-collar workforce.

There are areas of Hamilton that are lovely: check out real estate South of Main Street, East of Locke Street, and West of Gage and you’re good to go.

Your career field may influence your choices, too. If you move to London, you kinda have to be able to find a job in London, since there’s no other major metros in the area. But if you’re in Hamilton, you can go East for an hour to Toronto, South for an hour to Niagara, or North for an hour to Wellington. Lots of choices.

#109 Kip on 02.16.12 at 10:39 am

I just heard on 680 news that a condo in New York just sold for 88 million and it’s now the most expensive in that city.

I gues Toronto is second place again.

#110 AACI Okanagan on 02.16.12 at 10:41 am

#44 Devil’s Advocate on 02.15.12 at 11:42 pm

A thing that you are missing D.A. about foreclosures is that before a property in foreclosure is offered for a sale via the mls system the bank has already had 2-3 appraisals done on the property and all foreclosures appraisal are based on a “quick sale” marketing period, which is typically 30 days. If all the homes in a neighbourhood are taking 4 months to sell , then a 30 day marketing period is going to be discounted. Yes, some do sell above the list price, but even the ones that do are selling close to fair market value.

#111 Donn on 02.16.12 at 10:43 am

Garth, interesting confirmation of your sage advice to house hungry people…

http://www.reuters.com/article/2012/02/15/us-housing-americandream-idUSTRE81E1LG20120215

“Examining 250 properties around the U.S., and going through close to 40 client files to project the financial impact of owning real estate versus liquidating it, Arzaga, an adjunct professor in personal finance at the University of California at Berkeley, found that, “100 percent of the time it was better to rent, rather than own.”

That’s right: 100 percent.”

#112 When I come to this blog and it says "0 comments", I know that 25 blogdogs are typing their 1st comment on 02.16.12 at 10:56 am

Is the voting still open for Shawn Allen? Personally , never had a problem with his posts. Although I stayed away for a couple of months, (got bored), now back a bit, but read Garth fast and maybe scroll quickly through.
I think maybe he crossed a boundary of common civility. So in the spirit of getting tough on crime in this country, I vote to use this fellow as an example to others, and keep him out. Sentence: 6 months to a year. Garth can be the judge. (here come da judge) go Garth.

#113 poco on 02.16.12 at 11:04 am

#60Devil’s Advocate on 02.16.12 at 12:18 am

#52 poco on 02.16.12 at 12:00 am
#13Devil’s Advocate on 02.15.12 at 10:34 pm
No. I am quite sure I do not know what you want.
____________________________________________
how about you post the price changes that appear on the OK mlsexchange for one week–not vetted like i fear you would do–and the previous purchase price–that might be a good start–or you could just tell us how many sellers per week who will be bringing a cheque to the closing upon selling—real numbers–not percentages

ya if we’ll ever see that

i imagine the numbers would be greater than the tri cities where we have 35 to 45 per week –all downward–and did you accept that challenge
—————————————————————-
Ya right. Hey tell you what…. I’ve got a BRA you can sign and I’ll do all that and more.
——————-

with that answer it certainly confirms, for me anyways, that the Kelowna market is in far worse shape than anyone on this blog can imagine—

my numbers of 35 to 45 per week (i know you get easily confused) are those losing money –you know –net worth from the time of purchase–when they sell or if they sell—the numbers must be staggering in the OK

#114 Devil's Advocate on 02.16.12 at 11:10 am

#109AACI Okanagan on 02.16.12 at 10:41 am
#44 Devil’s Advocate on 02.15.12 at 11:42 pm

A thing that you are missing D.A. about foreclosures is that before a property in foreclosure is offered for a sale via the mls system the bank has already had 2-3 appraisals done on the property and all foreclosures appraisal are based on a “quick sale” marketing period, which is typically 30 days. If all the homes in a neighbourhood are taking 4 months to sell , then a 30 day marketing period is going to be discounted. Yes, some do sell above the list price, but even the ones that do are selling close to fair market value.

No AACI, what YOU don’t understand is any effective marketing of a home will result in an offer within the first 30 days. Beyond 30 days the listing becomes stale – due mostly because it was overpriced at the onset. Once you go past that 30 days you are chasing the market down in any market – buyers or sellers as you miss that “hot new listing” excitement period. There are ALWAYS buyers out there for any home – it just has to be priced right. “Priced right” does not mean a blow-out price nor does it mean over market – it means “Priced Right” “priced intelligently”. Expect to get an equal dollar less than true market value for each and every dollar you overprice at the onset.

Market value is the price. Price it at market value and ALL those overpriced homes will make yours look like a bargain. NOTHING sells for less than market value but a whole lot of homeowners think their home is worth MORE than market value.

Appraisers should be required to do a professional development gig in which they actually market properties to gain a good understanding of the realities of the marketplace rather than the academics of it.

#115 the bubble machine on 02.16.12 at 11:15 am

Mid February report (TERB) for the GTA —
Price rise again (9%) from the same time a year ago,
however new listings up 13%, sales up 9%

Sounds like the inventory will start to flood the market just in time for the spring frenzy.

It will only take 4-5 months of new listings outpacing sales to start to effect the prices.

#116 Party on Garth on 02.16.12 at 11:17 am

@#84 John G. Young,

So you basically mean mainstream Canadian before the divisive, toxic, “Multicultural” lefty nonsense of the GTA/GVA took hold like a cancer? Sounds great.

#117 Houman on 02.16.12 at 11:27 am

I was driving home on young around 2:45am last Friday when I saw about 200-300 people lined up in the cold for the next release of lots. They were standing in -17 waiting in line.

DELETED

#118 Skyce on 02.16.12 at 11:35 am

Jay Bryan: Inevitable housing crash? It’s been called off

http://www.montrealgazette.com/touch/business/story.html?id=6160485

#119 Brad in Van on 02.16.12 at 11:35 am

From the previous thread here is my response

At #249: NoName are you seriously sick enough to challenge that? Here is why you are not faced with the same challenge as what my family was right now… You simply would have said so in the first place, instead of passing it off to your friend’s say so. Anyone in this situation would have gotten it. Otherwise, you would have empathized with the situation if you actually had a child or family member of your’s going through the same thing. You’re a typical Canadian who cannot see past the propaganda of our system. You are just too proud and egotistical and you are a right fighter. Right fighters never win.

But let me answer your questions. Our experience is that it is BOTH an inept system and a failure to diagnose it correctly. Hence why we crossed the border to Washington. When your child is at stake, who the F*CK really cares WHAT or WHY we weren’t getting the answers? Forgive me if my state of mind at that time didn’t permit me to prioritize the reasons why our system failed my family. The bottom line is it was the hospital and doctors in Seattle who were able to see me and my family IMMEDIATELY, without question, and were able to promptly and properly diagnose it and begin treatment. I DID NOT RECEIVE THAT WHATSOEVER HERE IN VANCOUVER. Capiche? Free healthcare? Who gives a good god damn.

I’m not going to bother with anything within our system from now on. My son was NEVER diagnosed in Vancouver because they weren’t able to diagnose it. Did you read my post? My son was diagnosed in Seattle at Seattle Children’s Hospital. And your comment about ohip paying for treatment outside of Canada is totally moot.

Your statement saying “ohip pays for treatments outside canada if backlog for that treatment exist.” Are you freaking kidding me? That in itself is laughable. IF treatment is backlogged? The point is that it SHOULD NEVER BE BACKLOGGED in a top notch and efficient system! This is a life-threatening illness, and to force us to go to another country just to get the right kind of care is proof enough that our system is equally as broken but only in a different way.

And your stupid f*cking ohip point could not be more incorrect. Read for yourself.

“OHIP will pay very limited amounts for physician services and hospital/health facility services, and only if certain conditions are satisfied (refer to section below “What is not covered by OHIP?”). Under Ontario’s Health Insurance Act and regulations, physician services are subject to different conditions than hospital services.”

Here is your proof http://www.health.gov.on.ca/en/public/publications/ohip/travel.aspx

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

I am sorry to hear that, but what make you think that my family does not have similar situation, and that i didnt have same or very similar experience.

Help me to understand this,
“Had we chose to stay with the first doctor’s diagnosis here in Vancouver…”
is this bad diagnosis due to doctor being inept or is a system failure?
YES, I want IMMEDIATE ACCESS TO HEALTHCARE and THE BEST THAT MONEY CAN BUY.
where did you son get a diagnosed and where hi was treated? ohip pays for treatments outside canada if backlog for that treatment exist.
I know this first hand!

#120 Kip on 02.16.12 at 11:36 am

“Canadians will do exactly what they did with Nortel, Bre-X and RIM”

This is one of the reasons that Canadians do not trust the criminals on Bay St. in pinstripe suits. Most of them should be wearing prison stripes.

The criminals controlling the TSX have done far more damage to average Canadians than real estate ever has.

Idiot comment. — Garth

#121 Daisy Mae on 02.16.12 at 11:49 am

“Upon renewal. Surprise! — Garth”
_________________________________

#92 EAGLE EYES: “Someone correct me if I am wrong. I usually am not. From my knowledge if you do not change the amount/terms of the mortgage when it comes time to renew, if you have a 30/35 yr mortgage you will be able to continue with it. Any mortgage brokers out there that can verify this?”

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

Upon renewal, the homeowner is re-negotiating an entirely NEW contract. So, it’ll be a 25-year amortization.

#122 Junius on 02.16.12 at 11:50 am

Good article from Simon Johnson on the Bank of Canada’s objections to the Volcker Rule. What is Carney thinking ormis this payback to Goldman Sachs? Makes no sense for Canada to object.

http://economix.blogs.nytimes.com/2012/02/16/paul-volcker-vs-the-bank-of-canada/

#123 2or3orsometimes7 on 02.16.12 at 11:55 am

at #7
London is a fantastic city, and I’d pick it over Hamilton in a heartbeat. 45 min from Lake Huron with white sand beaches and known for gorgeous sunsets. Park/trail system running through city great for cycling. Lots of great restaurants. University keeps the city ‘youthful’. The cost of living is a lot cheaper than GTA and you don’t feel like you’re stuck in the maddness of neverending sprawl. If you live downtown or older established neighbourhoods (Old South, Old North), you can walk to your corner store, etc. There are lots of suburbs too though, that are not pretty in the general suburb sense (can get to anything you need within 10 min by car). The unsavoury characters mostly in the east end (east of Adelaide), not much in terms of crime, homelessness. A great place to raise a family.

#124 bigrider on 02.16.12 at 11:55 am

I really am starting to turn people off round me with my anti-house sentiment.

Nobody wants to hear it. “Houses are always a good investment” A universal truth.

From now on , I will use this venue and this venue alone to spew.

Garth, you be the marytr.

#125 Van guy on 02.16.12 at 12:01 pm

pocoyo,

I don’t care about these condos. You keep bringing stuff up that’s irrelevant to my points. Which is, what Larry answered, and the fact that you pointed out properties that were in trouble when they weren’t (eg. Homesteader). I told you I know some properties in your area are in trouble, just some that you’ve pointed out. You keep changing the topic now. And telling me I don’t know how to use the tools. That’s all my Korean friend

#126 Devil's Advocate on 02.16.12 at 12:19 pm

Employment Impacts of the Housing and Mortgage Industries

http://www.caamp.org/meloncms/media/Housing%20and%20Mortgage%20Impacts%20FINAL.pdf

#127 DUI on Money Road on 02.16.12 at 12:24 pm

What was that about betting against the US?

“Finally, while American workers may cost more per
hour than Chinese workers do, they put machines and automation to much greater use. “U.S. productivity is about 3.4 times as much as it is in China,” said Sirkin. “We now produce about 2.5 times as much goods in the U.S. as we did in 1971, with 30 percent less labor.

Add it all up, BCG concludes, and for goods in which the labor content is moderate — about 25 percent of the total cost — China’s cost advantage will decline to a mere 10 percent by 2015. When that happens, “appliances, television, computer equipment, furniture, machinery, plastic, and rubber — those are the kind of goods that are likely to reshore,” Sirkin says”

http://finance.yahoo.com/blogs/daily-ticker/president-obama-touts-onshoring-made-america-back-221759270.html

#128 Devil's Advocate on 02.16.12 at 12:25 pm

#109 AACI Okanagan on 02.16.12 at 10:41 am

If that is so (that the foreclosing banks obtain 2 to 3 fee appraisals) why do they (the banks) ask for and value my opinion of value?

#129 refinow on 02.16.12 at 12:25 pm

40 year mortgages are grandfathered, renewals on those mortgages will not effect the amoritzation as long as the mortgages are not increased.

You can move them from one lender to another and not affect the amortiztion.

However if you need to refinance that mortgage, any increases will void the 40 year amortizations and you will back to 25 years…

So the current 40 year amortizations are not in jeapordy

#130 Milk Man on 02.16.12 at 12:38 pm

What 25 year mortgage ? I can still get 40 year mortgage. Just got to know where to find it.

#131 Silver on 02.16.12 at 12:39 pm

In B.C. your property tax assessment is based on legislation that dictates only the top selling properties can be used to set the assessment rate.
It completely favors only the high end sales.

my property tax’s on a $315,000 sale building built in 1950’s with no upgrades has gone from $6000in 2008 to 14,000 in 4 years. 2012.
That’s a 233% increase in taxes over 4 years..no inflation there…

the assessments values are a “Cherry Picked Formula” using a public law specially designed to support the real estate market claims of flying value
It states only the top properties sold are to be used as a comparison for the assessment value of your property

an extra $ 20 + thousand in property coasts over 3 years.
Now add that to you fucking paper thin purchaser’s cash costs and see how long the margin buyers last. the increase in tax’s was basses on 1.3 sales a year in my property class and would have been even higher if I had not spent 5 months arguing my position.

the market value can be driven up and justified by one sale…
the Real Estate vulture love this formula… it completely favors the real estate market sales boards.
Again …
No Properties that did not sell, not one….
are included in this real estate board weighted sales value.
they are legislated to ignore all non sales and only very use top sales as a comparison fore your tax base.

Its a legal fraud upon the public tax base.
B.C.Assessments is used to legitimize the fraud and theft of real equity from cautious purchasers and rubber stamp the process for the real estate market.

No real accurate market comparison can be made using cherry picked selected for high value numbers

…but hey it cover 15% ish pay increases’ for they employees of the city and a 30% ish increase for the councilors….

I call it what it is ..Theft, and fraud upon the public…
As my wife says.. the only good flipper is a dead one…

Silver

#132 Dorothy on 02.16.12 at 12:49 pm

If everything you say is correct Garth, it’s already too late for F to make any changes that will make a difference to the outcome. So why keep beating the same drum?

#133 45north on 02.16.12 at 12:49 pm

AACI Okanagan: before a property in foreclosure is offered for a sale via the mls system the bank has already had 2-3 appraisals done on the property

that’s in BC, I have a question AACI Okanagan, could you send me an e-mail at [email protected]. Please.

#134 Daisy Mae on 02.16.12 at 12:54 pm

#92 EAGLE EYES and #106 McFURNISH: “For example, if a borrower had a 40 year amortization and there are 37 years remaining on the mortgage….” it will be renewed at 37 years.

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

Hmmm…..appears the feds changed the rules again to suit themselves. The alternative would have been many more foreclosed houses.

#135 disciple on 02.16.12 at 12:55 pm

Wasted. This describes entire populations addicted to drugs, the trade of which is the cornerstone of global power and politics. It’s why Vietnam and Afghanistan happened. Here’s all you need to know right here:

http://www.bibliotecapleyades.net/biggestsecret/biggestsecretbook/biggestsecret14.htm

#136 Silver on 02.16.12 at 1:05 pm

Garth I was told that I had to get the tax law changed to change the weighted assessment and the formula requiring only top sales be used that was legislated here in vancouver…
any suggestions as to the most direct way to do this.

the powers that be are not making it easy for me to find out how to properly challenge the weighted property assessment laws here.
I am only being given information as i force it from the departments and then only barely.
Everyone in the departments that I talk to admit they are getting clobbered by the property tax formula …. but no one has an idea of how to challenge it… they are not rich people with big lawyers either…
No one will give me a legal position or paper…
so that I can figure out which court of law do I enter to get the most effective and direct challenge entered.
I have no problem paying tax’s but this is getting insane here. This is a hidden tax increase covered by an assessment increase, and is not voted on by a mill rate increase.

A real comparison include standing stock that has not changed hands, and none personal additional properties be subject to investment rules, and not treated as personal homes.
or shoot me down so that I learn something more
You are more than free to use my Email if You need to.
It’s my version of trying to stop the bubble.

Silver

#137 Bill Gable on 02.16.12 at 1:06 pm

#57 sluggo

Try tinyurl.com for Links. Yours were a bit long and ungainly.

Cheers.

#138 Bill Gable on 02.16.12 at 1:12 pm

Rich Arzaga owns a luxury home in San Ramon, California, but he’s not betting on it as an investment.

The founder and CEO of Cornerstone Wealth Management, who bought the 5,000 sq. ft. property in 2005 for $1.8 million and has spent $500,000 improving it, considers the abode a wonderful place for his family. But ask him to rate his home — or any home, for that matter — as a financial investment, and Arzaga balks.

“It’s the American Dream to own a home, but whoever said that didn’t do the analysis on it,” says Arzaga, knowing he’s taking a contrarian stance to conventional wisdom.

Examining 250 properties around the U.S., and going through close to 40 client files to project the financial impact of owning real estate versus liquidating it, Arzaga, an adjunct professor in personal finance at the University of California at Berkeley, found that, “100 percent of the time it was better to rent, rather than own.”

That’s right: 100 percent.

Link> http://tinyurl.com/7eyb9tl

#139 BPOE on 02.16.12 at 1:29 pm

Folks, remember a house is NOT illiquid. Never has never will. In the wrong neighbourhood you could lose money but they ARE NOT I repeat NOT illiquid.
Let’s say you paid $300,000 for your house.Now the houses on your street are selling for $290,000. If you list a $200,000 your house will sell. At a loss but no different than a stock. A stock is illiquid in the same way. You buy GE at $18 and the market tanks. You need out. You just hit the bid. You have a loss but you are free. I hope I have made crystal clear the FACT that a house is never illiquid.

#140 Genghis on 02.16.12 at 1:29 pm

More commentary from the UK:

http://www.moneyweek.com/investments/property/rest-of-the-world/canada-house-price-bubble-20700

MoneyWeek is apparently the UK’s best selling financial magazine.

#141 Mixed Bag on 02.16.12 at 1:35 pm

“If markets were efficient there’d be the instant dissemination of the information investors need to make wise decisions. But that’s utopian.”

That’s also, most likely, intentional.

“And despite the non-stop news cycle, web-connected devices in every pocket and the glorious existence of this pathetic blog, shocking numbers of Canadians will do exactly what they did with Nortel, Bre-X and RIM. They’ll chase prices to the pinnacle, then wonder what the hell happened.”

Sometimes you just can’t save a person from himself.

#137 Bill Gable on 02.16.12 at 1:12 pm
Thanks for the link, interesting.

#142 MoneyMyHoney on 02.16.12 at 1:35 pm

Email from MorningStar – Copy_N_Paste –

Debt is to markets what opium is to addicts. Each debt injection is a rush, the sensation of prosperity created out of thin air. After 30 years of piling on debt ever higher, it looks like the bender is coming to an end: Since the financial crisis, households and corporations have begun to hack away at their debts, while rich-world governments are solemnly promising austerity — eventually.

After several years of pain, it’s natural to think vigorous recovery is around the corner. This nicely fits the historical experience, where deep recessions are soon followed by brisk growth. However, recent history is misleading at best. The best analogues to the U.S. economy’s current state are the latter half of the Great Depression and Japan’s own lost decade, when debt binges gave way to painful decade-long deleveraging. From this perspective, U.S. stocks look worryingly overvalued.

A long slog

It’s helpful to understand how the U.S. ended up with so much debt. Some of the blame rests with democracy. Politicians get elected by promising more bread and butter now, and the easiest way to do that is to borrow money or quietly underfund future liabilities (like pensions and entitlements). Our stateside neighbours aren’t alone. Nearly all the big, modern democracies have accumulated massive debt and even bigger unfunded liabilities.

Encouraging democracy’s spendthrift tendencies is the fact that debt creation leads to a temporary rise in incomes and asset prices as debt is recycled through the economy, gulling borrowers and lenders into thinking it’s safer to assume even more debt. The process snowballs, often for decades, until debtors can no longer roll over their debts, leading to financial crisis. Economist Hyman Minsky dubbed this process the “financial instability hypothesis…

#143 DUI on Money Road on 02.16.12 at 1:36 pm

#135 Silver on 02.16.12 at 1:05 pm
————————————
keep up the good fight. it’s people like you that change the world.

#144 John on 02.16.12 at 1:36 pm

To Mid-Ontario:

You are looking for a bigger reason for a national real estate meltdown in Canada?

Take a day off, draw down all the blinds in your house and look up “dervatives and the global economy”.

Imagine my surprise a couple of years back when I found out that the water rights business here in Chile is controlled by….the Ontario Teachers Pension Fund?

The river boat gamblers have been mighty busy since September 11th 2001. Follow derivatives growth world wide since that date. The false enemy was quite a cover.

Know what funny money fiat Canada says to that? Unbelievably, “conspiracy theory”.

You won’t have to find the reason for Canadian Real Estate nation wide to tank. It’ll find you.

Stop watching the news. Completely.

#145 eagle eyes on 02.16.12 at 1:41 pm

#128 Refinow

If someone got a 40 yr mortgage, say 5 years ago, when they renew would it be set at 35 yrs or 40 yrs since there is 35 years remaining on the amortization? If they didn’t change the terms?

#129 Milk Man

Where can you find a 40 yr mortgage still? Private lender?

#146 DUI on Money Road on 02.16.12 at 1:42 pm

#116 Houman on 02.16.12 at 11:27 am
—————————————–
Derogatory comment Garth, suggest you remove.

Agreed. Done. — Garth

#147 Form Man on 02.16.12 at 1:43 pm

#129 Milk Man

Interesting……….seems our bank regulations may have some gaps……….

#148 Canadian Watchdog on 02.16.12 at 1:47 pm

#125 Devil’s Advocate

What’s that another doctrine publication by CAAMP? The same institution that somehow calculated outstanding LOC debt per capita at $215 (yes two hundred dollars) in their May publication?

Here’s what they don’t publish http://i41.tinypic.com/24pkl52.png

#149 DUI on Money Road on 02.16.12 at 1:52 pm

#137 Bill Gable on 02.16.12 at 1:12 pm
——————————————–
The ‘better’ to rent vs. own 100% of the time is completely related to “financial impact” only.

Most people know that owning a cottage is a liability — yet they buy them anyway.

It’s hard to put a value on the things you can’t, such as having a place to call your own, being able to ‘go up to the cottage on a moments notice’ etc..

Same thing applies to primary residence, even if it costs a bit more to own, at least you know you’re the only one with a key to the front door.

#150 not 1st on 02.16.12 at 2:00 pm

Thought the canadian banks were so stable? What happens to client rates when the bank gets a down grade? I assume their borrowing costs will go up.

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/rbc-at-risk-of-two-notch-downgrade-moodys/article2340545/

#151 Daisy Mae on 02.16.12 at 2:05 pm

CBC: “There could be a new look to the Vancouver skyline with the proposal to build a unique 49-storey condominium tower at the north end of the Granville Bridge.

The $200-million project envisioned for the corner of Beach Avenue and Howe Street is a provocative design by Danish architect Bjarke Ingels that starts out as a triangle at the base but turns into a rectangle higher up.

In addition to condos, the tower would offer rental accommodation and also feature commercial space at street level — described as a sort of Granville Island north, with markets, shops, a beer garden or an outdoor cinema.”

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

Just never ends….

#152 Kip on 02.16.12 at 2:10 pm

“Canadians will do exactly what they did with Nortel, Bre-X and RIM”

This is one of the reasons that Canadians do not trust the criminals on Bay St. in pinstripe suits. Most of them should be wearing prison stripes.

The criminals controlling the TSX have done far more damage to average Canadians than real estate ever has.

Idiot comment. — Garth”

Ad hominem

You brought up those three companies in your post not me and they have screwed billions from average people with made in Canada white collar crime. Few will face the music in the courts and those that do will get a mere slap on the wrist.

Me, I’m keeping the house, sorry.

#153 AACI Okanaagn on 02.16.12 at 2:16 pm

#74AACI Okanagan on 02.16.12 at 12:58 am
What would YOU call a market in which both volumes and prices were stable? I merely provided the statistics. What you do with them is your business. Like I said earlier – no one here believes what I report. I get that. It’s their problem not mine.

Prices are not stable.. get your head out the sand.. I have the pair set analysis to prove it.. that is the true measure of where values are at, not your mls stats. Most realtors don’t understand what a pair set analysis is, are you one of them?

#154 Daisy Mae on 02.16.12 at 2:16 pm

131Dorothy on 02.16.12 at 12:49 pm
“If everything you say is correct Garth, it’s already too late for F to make any changes that will make a difference to the outcome. So why keep beating the same drum?”

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

Because Flaherty is a jerk — he bugs the hell out of us and we need to vent.

#155 AACI Okanaagn on 02.16.12 at 2:27 pm

#113 Devil’s Advocate on 02.16.12 at 11:10

No AACI, what YOU don’t understand is any effective marketing of a home will result in an offer within the first 30 days. Beyond 30 days the listing becomes stale – due mostly because it was overpriced at the onset. Once you go past that 30 days you are chasing the market down in any market – buyers or sellers as you miss that “hot new listing” excitement period. There are ALWAYS buyers out there for any home – it just has to be priced right. “Priced right” does not mean a blow-out price nor does it mean over market – it means “Priced Right” “priced intelligently”. Expect to get an equal dollar less than true market value for each and every dollar you overprice at the onset.

Market value is the price. Price it at market value and ALL those overpriced homes will make yours look like a bargain. NOTHING sells for less than market value but a whole lot of homeowners think their home is worth MORE than market value.

Appraisers should be required to do a professional development gig in which they actually market properties to gain a good understanding of the realities of the marketplace rather than the academics of it.

OMG, are you serious?? 30 days marketing period is the norm? It might of been a few years ago when a monkey could sell real estate but it isn’t today.. you better start pulling sales and see how long they have been on the market before selling..

and for the record, I sold real estate before I became a appraiser, so I well aware of marketing properties. Come and see my President Gold awards hanging on my wall.

#156 Daisy Mae on 02.16.12 at 2:27 pm

Further to previous post….”appears the feds changed the rules again to suit themselves. The alternative would have been many more foreclosed houses.”

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

Amortization periods and renewals never used to be an issue — 25-year amortizations, renewed for 20, 15, 10 years — until this idiot government changed it all. So their backs are against the wall and the 40/35/30 amortizations will have to be honoured.

#157 Temenos on 02.16.12 at 2:27 pm

@ #15 Tenemos — (from Monday’s blog)

“Worst case, Vancouver will simply see a multi-year flatline while inflation catches up to house prices, followed by a renewed march upwards. They aren’t building any new land in Canada’s only year-round city are they?”

They aren’t building any new land in California’s year-round Bay Area cities either, where urban spaces are hemmed in by sea, mountains and parks. Crashed and still burning:

http://housingbubblebust.com/OFHEO/Major/NorCal.html

Thanks for the link. Consider the fact, though, that the whole west coast is year round living in the USA, while Vancouver is the only Canadian city with year-round appeal. For many immigrants, Canada is the most attractive city in North America because of our leniency (lack of enforcement) in dealing with foreign income reporting. Also, consider that TWO THIRDS of population growth in Canada is from IMMIGRATION, and it all becomes quite clear why Vancouver prices are where they are.

Vancouver will probably see short-term declines, but I will bet that 2 million dollars for a detached home will seem like a bargain if we move forward 10 years from now. Over the long term, prices always trend up, just as surely as the money supply inflates.

#158 Victor on 02.16.12 at 2:34 pm

Now when somebody is telling me “It’s different here” I will answer (sometimes with a smile, sometimes very serious or ironic), “No, it’s just later here…”
Canada was given the lessons, but did not learn…

#159 Stevenson on 02.16.12 at 2:34 pm

WOW we are as indecisive as a squirrel crossing the road. So now we believe what realtors say? Oh wait his words support our theories.

People can not get mortgages unless they can afford them. No speculating investor can purchase second or third mortgages unless they can afford. This is unlike the US. There will be no crash in RE. On top of that if immigration policies were as easy as Canada(800k for 5 years = family citizen) then no one would be coming to this ice age country Canada.

#160 Preciousss on 02.16.12 at 2:34 pm

Renting is not for everyone.

As a home owner I can fish from my own dock, hunt in my own yard, burn garbage in a barrel, rip around the yard on dirtbikes atv’s and sleds, dogs can crap anywhere sleep anywhere or chew anything. I can collect old cars, junk, and never cut the grass, unlimited free firewood, clean air. I can also walk around in my gonch and flip the neighbors the bird.

It is not just about money, money, money. Money is easy to make. Quality of life is more difficult to attain.

Lots of miserable, drunken, addicted souls with wads of money.

I do not pay any rent to a bank but I do pay rent to the government, and I agree with Silver, they are outright fraudulent crooks.

I suppose if I were a 9 – 5 office slave or concrete jungle dweller, my view would be different.

Have the neighbors tried to execute you lately? — Garth

#161 AACI Okanaagn on 02.16.12 at 2:35 pm

#109 AACI Okanagan on 02.16.12 at 10:41 am

If that is so (that the foreclosing banks obtain 2 to 3 fee appraisals) why do they (the banks) ask for and value my opinion of value?

They always ask what a realtors think the list price would be.. tell you clients to take your opinion to a bank and see if they give them a mortgage on it?? That is how valuable your opinion is to the bank.. it is worth nothing because NO bank will lend on what a realtor tells them. PERIOD

#162 NorthOf49 on 02.16.12 at 2:37 pm

RealityTrac report the following US foreclosure stats today:

* New January 2012 national foreclosures: 210,000
* Percent change from December 2011: +3%
* Percent change from January 2011: -19%

Notable highlights:

* Some state lenders are increasing foreclosure activity (end of Delay & Pray practices)
* Florida saw a 60% decrease in foreclosure activity during 2011 however January 2012 is seeing a year-over-year increase of 14%.
* California dominates foreclosure activity holding 9 of the 10 top national cities. Good news is foreclosure rates are decreasing y-o-y in California.
* Chicago foreclosure activity increased 14% in January 2012 from Dec 2011 and 13% increase in January y-o-y activity. Judicial foreclosure process created backlog of delays in 2011 but now the process is speeding up.
* Nevada has highest foreclosure rate followed by California and Arizona
* New York state has one of the lowest foreclosure rates compared to other states.

#163 Incubus on 02.16.12 at 2:48 pm

New American Dream Is Renting to Get Rich

http://finance.yahoo.com/news/new-american-dream-is-renting-to-get-rich.html?l=1

#164 Kilby on 02.16.12 at 2:52 pm

#129 Milk Man.

Share where you can get 40 year mortgages, it would be interesting for all here, shouldn’t be a secret….

#165 reasonfirst on 02.16.12 at 2:56 pm

#44 Devil’s Advocate

“Nothing has changed. Nothing.”

Well – except that foreclosures have gone up by 1000% but that is just an inconvenient detail.

DA – Why have they gone up?

#166 Herb on 02.16.12 at 3:14 pm

#135 Silver,

there should be a provincial law/Assessment Act that regulates the assessment process and spells out reponsibilities and procedures. A municipality has no influence over the assessment process and certainly can’t change it.

#167 Nickolaos Vlittas on 02.16.12 at 3:38 pm

Now the Rich are starting to panic! They’re walking away from their mansions even though they can still afford them. Isn’t that so awesome?

http://www.huffingtonpost.com/2012/02/16/homeowners-beverly-hills-walking-out-mortgages_n_1280878.html?ref=business

#168 Cato on 02.16.12 at 3:41 pm

This is how it starts, welcome to the great Canadian unwinding.

People are generally optimistic fools. Most believe wholeheartedly they will be making more money in 5 years. The financial industry feeds on this naivety and tailors products accordingly, at some point though optimism needs to hit wall of reality.

Foreclosure rates are about to skyrocket, its unavoidable. Its going to be driven not by speckers and flippers but your average Joe who over reached and got into homes they simply couldn’t afford. When they were signing on the dotted line in 2007 everything was coming up roses, now its a struggle to just hold on. They were holding onto the forlorn hope of never ending double digit price appreciation, now they simply hope to sell and be made whole and get out of the financial prison they find themselves in. Its a fools hope.

The first initial wave starts the cascading effect. Court ordered sales are at first barely perceptible but over time begin to seriously drag pricing of comparables. Buyers sense blood in the water and promptly sit on the fence. Values across the board start slipping and those in financial duress begin taking stock of their situation. These are your neighbors who can make their mortgage payments (barely), its a struggle but they managing to keep it together by sacrificing other aspects of their lives. They start realizing their struggle and sacrifice is in vain, that they will never be made whole. They decide to walk away. This is when the floodgates truly open and markets get overwhelmed by supply as assets are liquidated at distressed pricing. Suddenly the majority of homeowners are now under water. Moral hazard creeps in, those fully capable of making their payments simply choose not to do so.

This is how it started in every other western economy, recourse lending is irrelevant. Its all about perception, when people lose faith the tides can turn quickly. Three years ago I would have laughed at the thought of a US style housing collapse, now I’m not so sure. The country is sitting on a power keg of debt, as other countries have already proven maybe there is no graceful way to deflate a housing bubble. Perhaps a crash is simply an inevitability.

#169 Mingeford on 02.16.12 at 3:45 pm

#163 Kilby

There are several lenders that still offer conventional mortgages (max 80% loan to value) with an amortization longer than 30 years. The restriction to 30 years was only for high ratio loans.

Merix Financial is one example.

#170 Ralph Cramdown on 02.16.12 at 3:47 pm

Yo BPOE:

Show me a time when GE was showing 11 months of inventory at the ask, and I’ll agree you can compare the liquidity of GE and housing.

#171 jess on 02.16.12 at 4:02 pm

stalagmites from the blue hole caves tell about climate change

NARRATOR: Much of what we know about climate history comes from two sources: sediment samples from the ocean floor and cores taken from glaciers and ice sheets. But stalagmites from these caves have one major advantage in recording climate history: their location.

The Bahamas lie beside the Atlantic Gulf Stream. For millions of years, this current has carried warm, salty waters north, where they cool and sink. That drives ocean circulation, also called the Atlantic gyre, which shapes the climate.

PETER SWART: Stalagmites record changes, right in the sub-tropical Atlantic gyre. So, here, we’re really at the heart of the action. We haven’t had that kind of opportunity to see the changes which occur in this region before now.

NARRATOR: So the stalagmite that Brian and Kenny have cut could provide a gold mine of global climate history. Using that history, Swart may be able to answer a critical question. While most scientists believe that Earth’s climate is changing, they are struggling to figure out how fast. This stalagmite could help answer the question.

But then he notices two curious details: first, the way the bands formed suggests that at least one of these climate episodes came on very abruptly.

At the end of the last Ice Age, about 11,000 years ago, conditions changed radically, from dry to wet, within 50 years. This change was probably accompanied by a rise in temperature and sea level.

http://www.pbs.org/wgbh/nova/earth/extreme-cave-diving.html

#172 Mike on 02.16.12 at 4:08 pm

@#155 Daisy Mae ” the 40/35/30 amortizations will have to be honoured.”

Are you kidding?

Why is it that prudent, sane buyers get priced out by these ludicrous mortgages, but idiots who take them get the rules changed for them when they’re in danger of losing sleep at night?

A mortgage’s amortization was never a guarantee that the mortgage would be “renewed” by the same lender or at terms which were anything close to the same.

Do you have any references? This is nuts.

#173 Pr on 02.16.12 at 4:23 pm

“Whoever controls the volume of money in our country is absolute master of all industry and commerce…and when you realize that the entire system is very easily controlled, one way or another, by few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” – President James Garfield, 2 weeks before his assassination.

#174 triplenet on 02.16.12 at 4:25 pm

#13 – DA said…..

No. I am quite sure I do not know what you want. Why don’t you repeat it in clear unmistakable terms that I may then reiterate it back to you such that you can then confirm that I do, in fact, understand, or not as the case may be, what it is you want.

Is this what you’d say to an undercover street prostitute in order to protect yourself from “john” incrimination?
Even we cannot obfuscate like that.
You obfuscator!!!

#175 Devil's Advocate on 02.16.12 at 4:30 pm

#152AACI Okanaagn on 02.16.12 at 2:16 pm
#74AACI Okanagan on 02.16.12 at 12:58 am

Prices are not stable.. get your head out the sand.. I have the pair set analysis to prove it.. that is the true measure of where values are at, not your mls stats. Most realtors don’t understand what a pair set analysis is, are you one of them?

What a friggin anal dip shit know it all… You are worse than me! “pair set analysis”! Are you friggin serious! You’re going to try anchor your great wisdom by dropping such terms… Do YOU understand statistics? You take one method of analysis and think it the “Gold Standard”. What a friggin idiot.

You think a “Pair Set Analysis” is a friggin crystal ball?!?! Ya right. Good luck with that one Einstein.

I don’t give a rats ass what kind of analysis you want to use. If you are an accredited licensed appraiser you must them have access to the MLS and can verify or deny those number I recently posted for the volumes and average price this year to date compared to the same period last year. Do it instead of cranking the numbers through some academic equation that spits out some irrelevant number that better suits your argument. The numbers are what they are;

This month to date residential sales volume of all types for the Central Okanagan Division as at Feb 14th was 126. The number for the same period last year was 125.

This month to date the average price, as at the 14th, was $367,085. Last year for the same period it was $363,839.

That sounds pretty friggin stable to me.

Take those numbers and plug them into your “pair set analysis”. That they ARE what they ARE and have been consistently so for some time amid the turmoil so often regurgitated and reiterated on this “pathetic” blog says something of the current state of the market.

I am seeing a lot of buyer jumping off the fence. Believe me or not, the choice is yours. If enough of them do they will ignite the market to act quite differently than you and the Blog Dawgs foresee.

As an appraiser, you should have access to the MLS, pull the numbers for yourself and prove me wrong.

OMG, are you serious?? 30 days marketing period is the norm? It might of been a few years ago when a monkey could sell real estate but it isn’t today.. you better start pulling sales and see how long they have been on the market before selling..

and for the record, I sold real estate before I became a appraiser, so I well aware of marketing properties. Come and see my President Gold awards hanging on my wall.

I repeat (paraphrased) you stand your very best chance of maximizing your sale price by achieving a sale within the first thirty days. If you perused the data and compared those who were successful doing so with those who were not you would see that to be true in ANY market.

But you apparently have the plaques on the wall to prove otherwise. Good for you. You continue to do what you do and I will want I.

Oh and I couldn’t tell you how many times I have been asked by an appraiser what a home sold for when they were doing a bank appraisal on it for the bank to ensure the chattel was ample. Aren’t you supposed to figure that out independently? And when the market was moving so fast that recent comparables were not recent enough to keep up with the changes in the market appraisers seemed to place a lot of value in what the real estate community might provide in terms of values.

#164reasonfirst on 02.16.12 at 2:56 pm
#44 Devil’s Advocate

“Nothing has changed. Nothing.”

Well – except that foreclosures have gone up by 1000% but that is just an inconvenient detail.

DA – Why have they gone up?

Simply because not too long ago people were gambling (speculating) with money they didn’t really have. They lost the wager and now the bookie, tired of excuses and postponements, wants the dough.

#176 45north on 02.16.12 at 4:30 pm

BPOE: Let’s say you paid $300,000 for your house.Now the houses on your street are selling for $290,000.

you mean in an entirely hypothetical way? You don’t mean you paid say $800,000 for a house in the Best Place on Earth and then later this year you had to sell it? I mean if you sold for $900,000 it wouldn’t be worth your while considering transaction costs. What if you put down 5% and found out that that you could only get $600,000. What then? Let’s say that the Royal Bank of Canada generously gave you a mortgage.

Your friendly Royal Bank will tell you that it has an iron-clad mortgage agreement and that it fully expects you to honour the terms thereof. So it’s a very fine thing that you are living in the Best Place on Earth because that’s where you are going to stay.

#177 Rob now in Nova Scotia on 02.16.12 at 4:32 pm

Wow, we are truly witnessing the bubble bursting for housing in Canada. Garth, on June 19, you ran a contest with everyone’s predictions for 2012. Here’s what I wrote back then:

My prediction is at the end of this year (2011), home values will be down 1-2% across Canada, with Vancouver and the GTA 4-5% up, skewing the results. Next year, the average home is 5% cheaper across Canada with Vancouver and the GTA down 1-2%. My prediction assumes no major rogue events like a default in Greece, QE3 in the US, no major war anywhere, etc.

So, how did I do? Can I get a free book now?

Cheers, Rob (still a silver bug, baby).

#178 s harper on 02.16.12 at 4:33 pm

Garth,
you are still fired
Stephen

#179 Re-diculous on 02.16.12 at 4:46 pm

Well well, even Fox North (i.e. BNN) is airing stories relating to the insane market in Vancouver. Love this Brian Ripley.

http://watch.bnn.ca/#clip620598

#180 John G. Young on 02.16.12 at 4:46 pm

#115 Party on Garth

Sounds like you should move there.

#181 cujo on 02.16.12 at 4:49 pm

BNN finally has someone with a brain on explaining the bubble is popping now.

http://watch.bnn.ca/#clip620598

#182 Devil's Advocate on 02.16.12 at 4:51 pm

#147Canadian Watchdog on 02.16.12 at 1:47 pm
#125 Devil’s Advocate

What’s that another doctrine publication by CAAMP? The same institution that somehow calculated outstanding LOC debt per capita at $215 (yes two hundred dollars) in their May publication?

Here’s what they don’t publish http://i41.tinypic.com/24pkl52.png

WTF is your point? Did you read the article? I think the graph your link leads to supports it more than detracts from it.

#183 Form Man on 02.16.12 at 4:52 pm

#167 Cato

good post

#184 jess on 02.16.12 at 4:55 pm

HMRC say the loans are earnings
..”It’s believed this particular EBT or employment benefit trusts,scheme involves something like £48million in payments, basically made in the form of loans. scheme worked like this:Players agreed the club would make contributions to an independent offshore discretionary trust and the beneficiaries would be the players themselves and/or members of their families.Rangers were able to make recommendations to the trustees as to how the funds may be applied. But the trustees were independent, meaning they didn’t have to follow those suggestions.The players could then request that the trustees of their own funds consider investing by making a loan to the players, but on a commercial basis. So, the trustees would lend money to the players at commercial rates.These loans were repayable after 10-15 years, unless the trustees agreed to extend them. But ultimately the loans would have to be repaid on the death of the player and the trustees would then distribute the trust funds to other beneficiaries.Crucially, as the club were not making payments, as earnings, this money wasn’t subject to tax.”
http://www.dailyrecord.co.uk/news/scottish-news/2012/02/16/rangers-in-crisis-facts-behind-bitter-battle-with-taxman-that-could-ruin-ibrox-club-86908-23753505/
==========
re: Volcker rule
Definition of Loans
7 of 325
http://www.sec.gov/comments/s7-41-11/s74111-230.pdf
=============
the 88m. condo
The seller was Sanford I. Weill, the former head of Citigroup Inc. It was bought by a trust for the daughter of Dmitry Rybolovlev (dih-MEE’-tree rih-bah-LOHV’-lehv).
‘Ms Rybolovleva was born in Russia, is a resident of Monaco and has resided in Monaco and Switzerland for the past 15 years.’ ( daily mail uk)

#185 Devil's Advocate on 02.16.12 at 5:02 pm

#158Stevenson on 02.16.12 at 2:34 pm
WOW we are as indecisive as a squirrel crossing the road. So now we believe what realtors say? Oh wait his words support our theories.

People can not get mortgages unless they can afford them. No speculating investor can purchase second or third mortgages unless they can afford. This is unlike the US. There will be no crash in RE. On top of that if immigration policies were as easy as Canada(800k for 5 years = family citizen) then no one would be coming to this ice age country Canada.

I generally agree with you, certainly with the premise of your message but for one small thing…. I know personally that I was offered access to a lot more credit at the peak of the market than I was comfortable with. I know I could have “speculated” with a lot more dough than I had capacity to pay back if push came to shove. In retrospect I am damned glad I didn’t bite off more than I could chew while attending that gluttonous real estate smorgasbord and cautioned successfully many to follow my lead.

Absolutely credit was being offered to many it should not have been. No one can tell me otherwise as I have in my inventory many a property offered by sellers who are being forced to gag and spit out what they cannot digest and pass through.

Colourful description I know, but one which I think aptly describes their plight.

#186 Smoking Man on 02.16.12 at 5:15 pm

Inflation a Coming

Bubble heads Party on, Kalona kaput. Right?

But not so fast…………..I am really starting to feel sorry for you guys, just as it looks like your redemption cake for being a chicken sh!t buyer is about to be served, something strange happens in the middle of the night.

Overnight the world was flooded with more fiat currency, ECB has is basically making sure Greece can not pull the Credit Default trigger, Which with 67 Trillion in credit default contracts the world as you know it will not exisit.

Translation, If F does not want a 2 dollar Lonnie anytime soon, Carnage is going to have to do the same.

Only way for status quo the top .1% to keep there heads firmly attached is to inflate their way out of this mess.

Tic Toc………………So You think Real Estate is high now, You aint seen nothing Yet

Certified Post http://dyslexicsmokingman.blogspot.com/

#187 BPOE on 02.16.12 at 5:15 pm

My point is stocks can change and change fast. Just cause yuo can hit the bid doesn’t mean you won’t lose out big time. Just ask anyone holding RIM stock. That stock story changed real fast. Essentially you were “illiquid” because you couldn’t get what you wanted. A house is never illiquid to state so is false. A house will always sell but the market determines the sale price just like a stock. Houses and stocks are both liquid difference being a house you are selling 1 item and a stock you might need to get rid of 100,000 shares which makes the stock scenario even more illiquid depending on the bids
*********************************************
Ralph Cramdown on 02.16.12 at 3:47 pm
Yo BPOE:

Show me a time when GE was showing 11 months of inventory at the ask, and I’ll agree you can compare the liquidity of GE and housing.
.

#188 reasonfirst on 02.16.12 at 5:16 pm

#174 Devil’s Advocate
164reasonfirst on 02.16.12 at 2:56 pm
#44 Devil’s Advocate

“Nothing has changed. Nothing.”

Well – except that foreclosures have gone up by 1000% but that is just an inconvenient detail.

DA – Why have they gone up?

Simply because not too long ago people were gambling (speculating) with money they didn’t really have. They lost the wager and now the bookie, tired of excuses and postponements, wants the dough.

Sounds like change to me.

#189 Devil's Advocate on 02.16.12 at 5:18 pm

#173triplenet on 02.16.12 at 4:25 pm
#13 – DA said…..

No. I am quite sure I do not know what you want. Why don’t you repeat it in clear unmistakable terms that I may then reiterate it back to you such that you can then confirm that I do, in fact, understand, or not as the case may be, what it is you want.

Is this what you’d say to an undercover street prostitute in order to protect yourself from “john” incrimination?
Even we cannot obfuscate like that.
You obfuscator!!!

Man everyone around here seems awfully dense today.

No triplenet… I think I was making myself quite clear. I am seeking clarification. It’s called communication… trying to understand what the other person is saying rather than just taking for granted what you are hearing as the message.

It’s not what you say that matters so much as what they hear. };-)

#190 Lee on 02.16.12 at 5:23 pm

174 Devil’s Advocate said: “What a friggin anal dip shit know it all… You are worse than me!”

I vote no to Au Contraire… I mean Devil’s Advocate. Someone who can’t control their own emotions has no business advising others.

Agreed. That was intemperate remark which I considered deleting, but allowed as it said more about the author than the recipient. — Garth

#191 Form Man on 02.16.12 at 5:29 pm

#174 DA

Interesting place, Kelowna.
We have a real estate market that is being held hostage by some uncooperative players. We have 20 months of inventory plus a large shadow inventory, and rapidly increasing foreclosures. In spite of this, sellers are staunchly unmotivated. Hordes of buyers are desperately circling city limits unable to enter. Even more buyers are sitting on fences by the droves……..waiting to all leap at once and cause a ‘market surge’. Meanwhile all is quiet…………
Perhaps this vast contingent of seniors, cheque books at the ready, but lacking battery life in their scooters to continue circling, and equally unable to launch their arthritic hips onto a fence, will finally wear down the frustratingly unmotivated sellers…………
Then DA will get his long awaited redemption……….

#192 John G. Young on 02.16.12 at 5:44 pm

#138 BPOE

Congratulations, that is the most idiotic comment I have yet read on this blog.

#193 Canadian Watchdog on 02.16.12 at 6:06 pm

#181 Devil’s Advocate

The point is, the RE market is killing itself and reports such as these are basically brainwashing RE agents to continue the ponzimania into self-cannibalism. The chart shows how RE jobs are declining while construction jobs have risen, get it?

Here’s an interesting excerpt from that report:

“Secondly, we must avoid any policy changes that would artificially constrain housing activity or reduce the ability of lenders to provide mortgages to qualified buyers. The last thing Canada needs is a policy-induced housing market downturn.”

The only policy change announced was relating to non stated-income borrowers, which are considered low income individuals who hold more risk, and the possibility of reducing 30yr amortization to 25yr, that is actually good for supporting stronger underwriting.

So what is CAAMP implying? That low standard policies should continue? Putting more risk to Canadian tax-payers? Who is CAAMP referring to when they say “we”, and in whose interest when new policies are protecting taxpayers? They sound like cult leaders trying to brainwash you all into realtorcrats.

#194 AACI Okanagan on 02.16.12 at 6:19 pm

Devil’s Advocate

What a friggin anal dip shit know it all… You are worse than me! “pair set analysis”! Are you friggin serious! You’re going to try anchor your great wisdom by dropping such terms… Do YOU understand statistics? You take one method of analysis and think it the “Gold Standard”. What a friggin idiot.

You think a “Pair Set Analysis” is a friggin crystal ball?!?! Ya right. Good luck with that one Einstein.

I don’t give a rats ass what kind of analysis you want to use. If you are an accredited licensed appraiser you must them have access to the MLS and can verify or deny those number I recently posted for the volumes and average price this year to date compared to the same period last year. Do it instead of cranking the numbers through some academic equation that spits out some irrelevant number that better suits your argument. The numbers are what they are;

I was right, you don’t know what a pair set analysis is.. and here I thought you knew it all.. it has nothing to do with cranking numbers.. I have 10 paired sales within the last year, all of which indicate 1% to 1/2 % decline per month in values depending what sub-market.

We both know we can spin MLS stats anyway we want.. so knock yourself out..

#195 triplenet on 02.16.12 at 6:33 pm

#130 Silver
# DA

Silver – You are incorrect about BC Assessment.
I can answer your questions.

DA
I’m from the Appraiser school as well.
You know not what you talk about.
Paired sales and re-sales are the most empirical evidence you can use.

#196 Freedom 55 on 02.16.12 at 6:45 pm

Hey DA !!!

If you made as many cold calls as you did posts, you might make enough to take the family to Big Mac

#197 eaglebay - Parksville on 02.16.12 at 7:13 pm

#165 Herb on 02.16.12 at 3:14 pm
“there should be a provincial law/Assessment Act that regulates the assessment process and spells out reponsibilities and procedures.”
———-
That’s it, more government rules and control.
Big brother takes over. Liberty, freedom, who cares.
At least the kids and grand kids won’t have to make any decisions by themselves.
Can people use common sense and a bit of brainpower?

#198 Milk Man on 02.16.12 at 7:19 pm

#144eagle eyes
#146Form Man
#163Kilby

CMHC won’t insure 40 year mortgages. If a private lender or financial institute or banks wants to lend , its their business. If your credit history is good ask any mortgage broker, he should be able to arrange one easily.

#199 JRoss on 02.16.12 at 7:34 pm

DA,

Stable average transaction price does not mean stable prices of individual units. You are clinging to the former. AACI Okanagan’s sales pairs relate to the latter, and are more respresentative of the actual market. Is this really so hard for you to grasp? Or is the cognitive dissonance just too much to bear?

Here is a little example reposted from another blog to help you understand. (I apologize to the previous poster for not acknowledging but I lost track)

450 Curlew drive
MLS 10021178
Recently sold for 999,500.
Previously sold for 1,499,000 in 2008.

http://www.trishwise.com/kelowna-listings.html

Ouch. minus 33%. 500G haircut. But I’m sure this is an isolated example, and that all that decline happened before 2009, and that there will be no more declines, right DA?

#200 Daisy Mae on 02.16.12 at 7:50 pm

#171 MIKE:

Re Mortgage renewals….

http://www.cmhc.ca/en/corp/faq/faq_008.cfm

#201 Devil's Advocate on 02.16.12 at 7:52 pm

DELETED

#202 Nostradamus Le Mad Vlad on 02.16.12 at 7:52 pm


Copulating Religious Satellites is a new, unproven conspiracy theory. I heard of them recently, but not much success in finding any more on them. Nevertheless, my work continues unabated. [“He has never been known to use a word that might send a reader to the dictionary.” — William Faulkner (about Ernest Hemingway).]
*
2:40 clip Billary vying to become head of World Bank (now we really are doomed); Deflation precedes Inflation; Greece “All major banks ‘are instructed not to deal with euro exchange as of open of business in Greece on Monday 25th march. All Greek markets will close for one day ‘at least’.”; 29.18 clip The US recovering? Pull the other one, and Recovery? “. . . and some families are even eating rats.”; 5:08 clip Greece motoring toward the edge of a cliff, and 3:07 clip Greece again, but note the military is being expanded (for WW3); 15:27 clip Banxters and govts. vs. evolution; 30:55 clip Why silver can top gold; International Currencies rejected.
*
Russian military intervention possible in Syria, and another false flag exposed; The US wants a quick war with Iran; The Nazification of America is virtually complete; Iran “Why would Iran bomb one of its most important trade partners … Who is helping Iran to escape from sanctions by the west?”; The Bovine Excrometer and The Toilet sing a duet; CIA sponsors the Muslim Brotherhood; Ron Paul Having the wins knocked out of him (GOP fraud); ‘Net Censorship US, Caada, UK, Oz, ACTA etc.; Germany exporting electricity to France, not restarting nuke reactors (CC); Docs firing patients who refuse vaccinations.

#203 Mr Buyer on 02.16.12 at 7:59 pm

The Bubble has Topped…
The key element in the bubble cultivator strategy is to defend and deny so the bubble can continue to expand and inflate. Every aspect of mass media must be inundated with the usual jargon in the hopes of continuing the charade. Here on this blog the bubble cultivators simply wish to state ad nausium that all is well. Statistics, news, defaults, whatever simply do not matter. Sadly, I feel we fence sitting kapons, as some suggest we are, are in fact helping to prop up the bubble with every keystroke we commit trying to convince the bubble propegators the party is over. It is a matter of faith along with vested interest and not rationality. When we pile on the rabbit, reguardless of how in need said rabbit is in need of a piling on we play into various psychological and social mechanisms that ultimately work against us. The bubble has topped and we are indeed on the way back down. Those that have taken their position in Real Estate as it is put here in the comments section likely see the writing on the wall. Risk, once assumed, has quite an impact upon perception for most. Now is the time when even more brazen statements will be made in the hopes of transferring the ever increasing risks to uninformed types. Thus foreclosures are a sign of a healthy market.
…Buy now before everyone can afford to…
…and they landed softly ever after….

#204 OneMoreThing on 02.16.12 at 8:01 pm

DA, go try and sell some houses for all those clients who trust you by convincing them that if they dont price right they will never sell!

You would have to agree that the above is much better time spent than trying to moderate Garth’s blog all day!

#205 Smoking Man on 02.16.12 at 8:05 pm

Devil’s Advocate

You where just owned, and be-och slapped by
AACI Okanagan on 02.16.12 at 6:19 pm

looking forward to this on ice scap

DA your responce please?

#206 Mr Buyer on 02.16.12 at 8:09 pm

The bubble has topped…
We have now entered the twilight zone.
Foreclosures raise prices!!!
….buy now before everyone can afford to….
….and they landed softly ever after…

#207 TurnerNation on 02.16.12 at 8:09 pm

Oh dear: Royal Bank.

“Moody’s also said Wednesday it was reviewing JPMorgan Chase & Co. (JPM), Morgan Stanley (MS) and Royal Bank of Canada (RY, RY.T) for possible downgrade. Seven other financial firms’ reviews were extended Wednesday as part of a separate ratings action on European banks, while four more had other negative reviews extended “

#208 Smoking Man on 02.16.12 at 8:12 pm

#87 Nostradamus Le Mad Vlad on 02.16.12 at 1:55 am

Your liks where amazing today, were do you find the time

You had one on the interest rate derivatives, and CDS dead smack on.

After reading it, no way there going to allow CDS to be redemed, Then on Zero Hedge I find out that ECB has got the priniting machine in over drive.

Keep them coming bro

K

#209 Steven Rowlandson on 02.16.12 at 8:17 pm

If markets were efficient there’d be the instant dissemination of the information investors need to make wise decisions. But that’s utopian. And despite the non-stop news cycle, web-connected devices in every pocket and the glorious existence of this pathetic blog, shocking numbers of Canadians will do exactly what they did with Nortel, Bre-X and RIM. They’ll chase prices to the pinnacle, then wonder what the hell happened.

Garth that sounds about right. Unfortunately most people have to find out the hard way because like a hoard of lemmings they love to follow the crowd and believe what they are told by the official media and the financial and political authorities.
So trusting, so greedy, so gullible and of course foolish. Easy meat for financial and political predators.

#210 Daisy Mae on 02.16.12 at 8:21 pm

Milk Man on 02.16.12 at 7:19 pm
#144eagle eyes
#146Form Man
#163Kilby

“CMHC won’t insure 40 year mortgages. If a private lender or financial institute or banks wants to lend , its their business. If your credit history is good ask any mortgage broker, he should be able to arrange one easily.”

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

“CMHC mortgage insurance is good for the life of the mortgage. Borrowers renewing an insured mortgage will not be affected by these changes. For example, if a borrower had a 40-year amortization and there are 37 years remaining on the mortgage, the mortgage can be renewed with a 37-year amortization, as long as no new funds are being added to the mortgage.”

#211 Devil's Advocate on 02.16.12 at 8:33 pm

#198JRoss on 02.16.12 at 7:34 pm

I understand what AAIC was saying.

The fact is that when I do a market update for my listing clients I do search for properties which have been resold in a given period of time to exemplify what the market has done. Most recently I did so for a listing not so far away from that you mention on Curlew Drive (which is an interesting case example in its own right BTW. There is a lot more to THAT story than you seem to be privy to).

Anyway you would be surprised how difficult it is to find, especially in the more traditional established Okanagan Mission areas, properties which were bought at the peak of the market and then sold more recently for much less if any.

There is one I can point you to located at 4362 Kensington Drive in Kelowna’s Okanagan Mission area which was bought for $635,000 on February 16, 2007 (pretty much the peak of the market). That property was sold by the then buyer on July 5th of this year for $1,127,500.

So much for “paired set analysis” I’d say.

But if you wan to pick and choose please be my guest. I whole heartedly agree one should to one degree or another as each neighbourhood, city, province and country is indeed unique. But for the purposes of this blog we are generally speaking in general terms and I maintain the general state of the market is not nearly so dismal as the pups and poodles believe.

#212 Devil's Advocate on 02.16.12 at 8:43 pm

JRoss

The MLS number of that property I mentioned is 10028287.

While that was an extreme example specifically picked to contrast with that you provided at 450 Curlew drive
MLS 10021178 it is not so unique as you might think.

Would you like me to post more such examples where properties that sold at the peak of the market more recently were sold for as much or more?

In the last such update I provided a client I could only find two properties in an approximate 5 to 10 block radius which sold for less in the last 12 months than were purchased for at the peak of the market.

#213 Devil's Advocate on 02.16.12 at 8:50 pm

JRoss

For every such example you can provide like that you did I can provide you two or more like that I did. Care to take me up on the task?

#214 maxx on 02.16.12 at 8:51 pm

#50 MrHulot on 02.15.12 at 11:55 pm

ROFLMAO!!! Best laugh of the day!

#215 Devil's Advocate on 02.16.12 at 8:58 pm

Are there areas which have seen an overall price drop. ABSOLUTELY!!! But overall in Kelowna our market has dropped by little more than 15% since the peak. Given the huge equity gains leading up to that peak I’d say that overall 15% loss is insignificant unless you were a fool who got in over your head to begin with.

I know my own home is worth about 10% less that it was at the peak of the market. But then I bought it well before the ramp up commenced. Still the loss of the perceived equity gain is hard to take. On the other hand I sold personal real estate holdings just prior to the economic crisis. Could I turn back the hands of time I would not have done that. Those properties are worth today what they were then. The only one to prosper from that little transaction was the Federal Government through their take of the capital gain.

#216 Devil's Advocate on 02.16.12 at 9:03 pm

Believe me or not… we’ll not likely be doing business together. I have nothing to gain. As I have told you all before it doesn’t matter to me if prices go up or come down. People will still be buying regardless. In fact if prices come down as you all proclaim more people will be buying and that’s just damned good for business. So why would I want otherwise than for your predictions to come true?

I’m just telling you some of the other side of the story. And trust me pups and poodles there is a LOT more of it where that came from. This pathetic blog is but a vocal minority in your world. As Garth has pointed out time and time again, most reader do not post. Many I would venture to say read this blog as little more than amusing entertainment as THEY laugh all the way to the bank.

#217 Ogopogo on 02.16.12 at 9:05 pm

Great post, Garth! As someone who’s a vultch-in-waiting here in the ninth circle of Kelowna RE hell this is like music to my ears. I do have a small corner in my cold, smug renter’s heart for the hapless families who bought into the K-bubble, but nothing but venom for specuvestor scum.

Words of wisdom from Sir Garth: “This is a sure sign of a market approaching the cliff. Speculators can only make money in a continuously rising scenario, full of greater fools too whacked by house lust to see what they’re doing.”

Exactly. Hence the price drops I keep seeing everywhere here. My neighbour two doors down was complaining the other day about how mad she is at her last assessment. I looked and she’s about $20K off what she paid for it in early 2011. By Jupiter, she could have left the downpayment under her mattress it would’ve been better!

#20 René Kabis on 02.15.12 at 10:47 pm

So you were the prophet on Castanet?! I’ve always thought how prescient that post was at the time, and even more so now in hindsight. A pleasure to make your acquaintance.

For what it’s worth, here’s my own obviouscast: watch realtors begin to try to drown out the cacophony of bad news. Hell hath no greater fury than a realtor scorned.

#218 Van guy on 02.16.12 at 9:12 pm

#209 Daisy Mae

Upon renewal. Surprise! — Garth

Which is correct here?? Garth or Miss Daisy?

#219 brad in saskatoon on 02.16.12 at 9:13 pm

well i think the market is still pretty strong in saskatoon i do not no why but the house across the road from my place in saskatoon just listed today and i seen 4 people already look at it in the last 3hrs . but ya i think we are going to see a slide by summer time for sure .. the prices are too high .. unless like smokeing man said that inflation comes and our dollar is only worth 50 cents than it would be smart too keep houses. whats your guys thoughts on this country inflated its way out ?>
thanks brad

#220 Devil's Advocate on 02.16.12 at 9:16 pm

#200Devil’s Advocate on 02.16.12 at 7:52 pm

DELETED

So am I to believe that my participation on this “pathetic” blog is sought and you will not do me the honour of banishment.

Please, I need help in kicking this insidious habit. I’ve tried before myself and failed miserably.

So many misled, so many misinformed. Why do I care?

#221 Preciousss on 02.16.12 at 9:22 pm

Sales comparisons based upon RE nominal value is not as meaningful as basing the comparisons in real terms.

When prices for consumer goods and taxation rise faster than rise of the RE asset the RE asset is considered a loser.

Same can be said about all the mutual funds that are approaching their 2008 peak price levels. If you hung on you lost.

If you sold out prior to the crash you won. If you redeployed at the lows and timed the market you did exceptional.

DA, the properties are “not worth today what they were worth then”. Don’t worry, you are not alone. Most folks do not understand the difference between real and nominal gains.

#222 robert on 02.16.12 at 9:30 pm

Garth,

One of my friends sent me this anonymous sourced story below. Could it be true?

… “One of our colleagues is a bankruptcy lawyer in Calgary.

Home foreclosures in Alberta are going through the roof and they have set up a special administrative / court system for it but they are limiting the number of cases they are seeing per day. They are purposely keeping the lid on this and making sure it doesn’t get to the media.

The media is pushing the story that the western economy is great and that Canadian home prices are good and stable. It’s all lies.

They are very afraid if this story gets out.”

#223 Golden Stu on 02.16.12 at 9:34 pm

#130 Silver on 02.16.12 at 12:39 pm

I like the cut of your jib.

Contrary to the general theme of this blog, the bigger picture of the housing crash is still a mystery to most people.

In a lot of western countries, the number of people directly reliant on handouts from the Gov is in excess of 50% of the population. Whether it is unemployment benefit or government awarded contracts to the people with the biggest ‘Lobbying” budget, it all comes out of the pockets of the few in the end.

The exponential growth of government (at all levels, in all countries) leaves fewer and fewer people to tax to death to pay for the ever expanding government.

The logical conclusion is that it has to stop somewhere.

The ongoing housing crash is reducing a huge revenue cash cow in the form of property tax. What will fill the gap!

You cant get blood out of a stone….as is evident by the economist “shoe throwers index”. Democracy is breaking down due to the global debt bubble.

House price collapse is just a small part of the equation, just a very emotive one as GT so eloquently writes for us.

#224 Smoking Man on 02.16.12 at 9:38 pm

Oh my good Ya wasted again

into jack after the wine was empty

debating the fall of real estate
Who is my favorate hollywood star
The greens, you know globale warming

Then I have Vic Towes, wanting to find out who is chirping The neo-cons and that little country in the meditarainia, that they bow too………..

And then there is me . the great smoking man
who made http://www.keysme.org on a drunkin sunday afternoon that kills the key word servalace algos.

Good im good

#225 Smoking Man on 02.16.12 at 9:42 pm

my last sentances should have read GOD IM GOOd

time for 1-800-Hooker

#226 The Thing in the Basement on 02.16.12 at 9:49 pm

196 E-Bay Pville – there already is of course, since 1973

http://www.bcassessment.ca/about/Pages/History.aspx

Actually not a bad idea, as it standardized the methodology, and relieved the individual tax jurisdictions of figuring it out then having to defend it.

130/135 Silver. Sorry, no idea what you’re talking about. Is it the assessment that’s bogus, or the mill rate? If it’s the assessment, then get an appraisal (with that paired set anal thing) and take it to the appeals board. They have been mandated to estimate the market value and they acknowledged that in my appeal and stated the best weapon is an appraisal. Good luck.

#227 Smoking Man on 02.16.12 at 10:01 pm

Mikis Theodorakis

Band on google

#228 truth hammer on 02.16.12 at 10:05 pm

As pointed out two years ago, the alt-a ( jumbo-super) mortgage defaults are outpacing/eclipsing the rate of default we saw with low end NINJA, LIAR and Sub Prime loans in the US……the shadow inventory is collapsing like the final peg of a JENGA tower.

http://business.financialpost.com/2012/02/16/u-s-foreclosures-hit-beverly-hills-90210/

Think its safe to buy Property in the US….that it ‘can’t get any cheaper’…thats the market has bottomed out? Bwahahahahahahahahaha btw…I have a nice bridge for sale for the suck ups of that kool aid punch. It can and is getting worse……………..especially when banks are forced to liquidate non performing loans….now judiciously labelled as ‘shadow stock’.

As Garth rightly pointed out…we are going to see ‘rationing’ of insured mortgages. The CMHC is bust…..tapped out…….broke……..and reporting less than all it’s liabilities to the public……like all accounting features…theres so many cool acronyms to cloak reality…….for a time.

http://business.financialpost.com/2012/02/15/housing-crutch-abandoning-banks/

The banks are now going to have to do things the old fashioned way……and actually find qualified customers instead of shuffling 100% of the mortgages onto the tax payers side of the ledger.

Hey….but this article contains a huge red herring…reporters seem to like those popular stands….grrrrrrr………It ain’t the banks who created this mess kids……It’s F…C and Stepho….who took a short term ’emergency rate’ plug and rammed it up the keister of an old whore. What has come out is an ugly ugly mess.

Killing the 30 year is just a photo op….F hopes the flash will blind the media again. Its the risk we jave been forced to absorb by these bad business practices that will cause us to vomit up the hard times to come.

Lesson tip to self………..debt is bad……bad debt is worse.

‘None of these Bozo’s is fit to run a lemonaid stand’ goes WAC’s transferable quote.

tip to F……..interfering with the market has led you to this…………guess what……..it’s bigger than you….taller too.

#229 Blog Dog Carney on 02.16.12 at 10:12 pm

121 Mr Junius – please refer to the link in the article you referenced for my comments to Benny.

The BOC is not against the Volcker Act. As head bank cop
I appreciate the need for a strong regulatory framework.
As well intended as the act is, the two particular sections
I noted could under certain conditions have a strong
negative effect on the liquidity of canadian government
securities, and jeopardize the stability of our own
banking system.

In this case, the act throws the baby out (with the bathwater)

#230 Form Man on 02.16.12 at 10:28 pm

DA

Gosh buddy, you seem to having a rough day, What is with the nasty language ?
Focus on the positive. Think of those foreclosures…….driving home prices up. Think of all that pent up demand, just straining at the leash…….

Don’t let the little people get you down……

#231 Devil's Advocate on 02.16.12 at 11:38 pm

#229 Form Man on 02.16.12 at 10:28 pm

Yup… pretty much. I really need to cut loose of this BS and let the pups and poodles meet their fate or I mine as the case may be.

More than three years and I don’t think I’ve made one iota of difference here. Time to give it a rest. Time to move on. Harder than quitting smoking it seems but every bit as beneficial the mind, body and soul I can only imagine. Quite smoking so I am sure I can quit this blog. Do they have a patch for that?

#232 TurnerNation on 02.16.12 at 11:39 pm

This pathetic weblog garners 250+ comments per day, these days. Blog dogs are in a frenzy! They know what’s coming our way.

#233 Herb on 02.17.12 at 12:08 am

#196 eaglebay – Parksville,

you no-government preachers just slay me.

I did not recommend that “there should be” an assessment act to regulate all the nice things associated with assessing property, but assumed that BC, like all provinces, had one, and Silver should study it to find a way to solve his problem.

Let’s start from the ass end. A city needs a certain amount of moneu to do certain things. Police protection is one thing you Neandercons certainly want. There may be other municipal services you might like, such as pothole fixing. Unless you and enough of your no-government buddies offer the required specialised services for free, the city has to pay for them. So where is the money going to come from?

The time-honoured – although not fairest – way is through property taxes paid by residents. Now someone has to find a way to determine the basis on which property taxes are paid. Interestingly enough, all provinces in Canada use an ad valorem system, meaning that the taxes to be paid depend on the value of the property. So now you have to find a way to determine and keep track of the values of properties. This is called assessment. And since municipalities are creations of their province, it would be proper to ensure that all properties in all municipalities are assessed the same way. Ergo, each province has an Assessment Act.

I’m all in favour of lean, mean, and clean government, and I’m sure that all levels of government could be tightened and improved. But your no-government gospel is about as stupid and unrealistic as a political idea can get. No mean achievement, even for Neandercons. How many times do I have to ask you and your confreres to let us know which functions of government can be eliminated and what resources are required to do the rest? Until you do that homework, just shut up!

#234 What happens to vocal housing bulls after a RE bubble pops? | Vancouver Real Estate Anecdote Archive on 02.17.12 at 9:18 am

[…] “You know the exploding rate of Foreclosures? It’s actually quite funny. With it being about the Okanagan, that is. From about 2005 onward, I posted quite a bit on the Castanet forums (the local news site) about how Kelowna home values were wayyy too high, and that we were in for a catastrophic collapse, and that the rate of foreclosures would be one of the first signs of an impending collapse. From the moment I started to post on their forums, I was overwhelmed by bubble deniers who openly mocked me. There was at least a 20-to-1 ratio of bubble deniers that openly refused to believe that home prices could ever crash, compared to those who said I might be right. In fact, one of my threads (started in December of 2007) became one of the biggest ever on Castanet (5,665 posts) before someone politely asked to have all threads dealing with Real Estate deep-sixed into the smallest, deepest and least-visited part of the forum. Even though most of said threads were clearly about Kelowna, and had nothing to do with the “Economic Crisis” category they were thrown into. In the end, the subject ended up getting as many visitors in a month as it used to get in a single day when it was in the Kelowna category of the forum, so it was painfully obvious to me how loudly money talks, especially money of the advertising variety. What I find so amusing now is how so many of the hard-core bubble deniers have been quietly changing their tune, even up to the point of denying that they were ever bubble deniers. Yes, Dirtrider, I’m looking squarely at you. Nice for you to finally realize that things are NOT different here. Oh, and that news article that is all over CBC.ca and other news organizations, about how the number of foreclosures in the Central Okanagan have pretty well exploded? Not a sign of it on Castanet’s front page yet as of 2012-02-15 1841hrs UTC-8. In fact, a Google search shows that the news isn’t even on the site, just on the forums. And yet, they’ve got OMREB-authored “news articles” about increased housing starts in the North Okanagan. Oh, yeah. Money talks, all right.” – René Kabis on at greaterfool.ca 15 Feb 2012 at 10:47 pm […]

#235 Daisy Mae on 02.17.12 at 10:45 am

#215 DEVILS ADVOCATE: “Garth has pointed out time and time again, most reader do not post.”

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

I imagine most read Garths’ blog and don’t bother with the posts. I rarely read yours.

#236 What happens to vocal housing bulls after a RE bubble pops? on 02.17.12 at 4:20 pm

[…] “You know the exploding rate of Foreclosures? It’s actually quite funny. With it being about the Okanagan, that is. From about 2005 onward, I posted quite a bit on the Castanet forums (the local news site) about how Kelowna home values were wayyy too high, and that we were in for a catastrophic collapse, and that the rate of foreclosures would be one of the first signs of an impending collapse. From the moment I started to post on their forums, I was overwhelmed by bubble deniers who openly mocked me. There was at least a 20-to-1 ratio of bubble deniers that openly refused to believe that home prices could ever crash, compared to those who said I might be right. In fact, one of my threads (started in December of 2007) became one of the biggest ever on Castanet (5,665 posts) before someone politely asked to have all threads dealing with Real Estate deep-sixed into the smallest, deepest and least-visited part of the forum. Even though most of said threads were clearly about Kelowna, and had nothing to do with the “Economic Crisis” category they were thrown into. In the end, the subject ended up getting as many visitors in a month as it used to get in a single day when it was in the Kelowna category of the forum, so it was painfully obvious to me how loudly money talks, especially money of the advertising variety. What I find so amusing now is how so many of the hard-core bubble deniers have been quietly changing their tune, even up to the point of denying that they were ever bubble deniers. Yes, Dirtrider, I’m looking squarely at you. Nice for you to finally realize that things are NOT different here. Oh, and that news article that is all over CBC.ca and other news organizations, about how the number of foreclosures in the Central Okanagan have pretty well exploded? Not a sign of it on Castanet’s front page yet as of 2012-02-15 1841hrs UTC-8. In fact, a Google search shows that the news isn’t even on the site, just on the forums. And yet, they’ve got OMREB-authored “news articles” about increased housing starts in the North Okanagan. Oh, yeah. Money talks, all right.” – René Kabis on at greaterfool.ca 15 Feb 2012 at 10:47 pm […]