Courage

It took courage, But, then, being a contrarian always does. The guy next door asks if you’re mental. Your extended family gags. The people at work are incredulous, then whisper. Common wisdom is so, well, common.

But Janey stuck to it. She and her tentative husband sold the little family home they’d lived in for most of a decade, closing the deal 18 months ago amid the frothiest housing market in Canadian history. The tidy, nondescript bung they’d paid low-sevens for went in a frenzied, chaotic bidding war to an investor for $1.5 million, plus an agreement that they could stay on as tenants for at least two years. Since that day, they have been millionaire renters.

“This is amazing,” she told me yesterday, “look at it.” And there was a flyer from her local neighbourhood Re/Max guy flogging houses in the hood for between $1.458 million and $3.8 million. At the bottom was a box giving the latest score for sales on Vancouver’s Westside: Units sold, year-to-date -39%.

But things are more intense than that. Even the local real estate board’s world-class numeric obfuscation and stat-murdering (average prices are down 12% but its price ‘index’ rose 5%) couldn’t apply gloss to this porker’s puss.

Sales in that part of town (the most expensive) have collapsed by 46%, while in other (almost as expensive) sections of the city deals have crashed almost 60%. With overall sales off 15% (all types of homes, in all areas) this was the worst May since 2001 when we were all buying Nortel stock. Detached homes led the decline, off in total by about a quarter.

Said the boss realtor: “It’s a stabilizing period.” Yup. Just like a coma.

Meanwhile in Toronto the big news is an explosion in listings. Up more than 20%, to a tad less than 20,000 properties. Normally you see this kind of swelling in March, not May when the lacklustre summer sales season is upon us. As everybody will tell you, it was a weird lack of inventory for most of the past year which led to nutso bidding wars and asking prices which became  mere suggestions.

A few weeks ago I told you the wars would end. And they did. It’s a leading indicator of conditions to come. The bloat in listings is another – one of the critical six stages of the market I wrote about on Sunday. Soon, what’s happening in Vancouver will manifest in Toronto, as motivated sellers realize they have too much competition and demand less.

Contrast this with the steamy, bothered, breathless, panting prose on this pathetic blog just weeks ago, as I walked you through scenes from North Toronto. Rock star realtors engineering quasi-auctions. Greedy sellers refusing bully offers. Certified cheques piling in at the appointed hour. Stressed-out buyers, wired on Grande Bolds, pacing the sidewalk ready to vivisect one another. And bid prices starting at 120% of the asking.

It could not, and did not, last. Nor will current valuations. Or the condo excess fueled 80% by speculators. Or people camping out in North Unionville (of all places) so they can buy a million dollar home in five minutes.

But why, cry the disbelieving realtors, have not prices declined yet?

Because they stick. Real estate valuations always leap higher in bull times, on market euphoria, media boosterism, seller greed and buyer panic. Bubble news spreads quickly. Every sale on a street sets a new floor for each subsequent one. But when the tide turns, sellers resist and cling to an inflated idea of what their property is ‘really worth.’ It usually takes months, maybe six or nine of them, before it’s apparent the idiot buyers all went home.

This began in Vancouver (as this blog reported) four months ago. Now the average SFH is off more than 12%, on its way to thirty. It began in Toronto in the last three weeks with detached homes. It’s in full flower with condos. The outcome’s as inevitable as it was with Facebook.

Finally, did you catch Mark Carney, the central bank guy, on Tuesday? Love that dude. This was some of this best work.

“To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.”

I mean, courage. Could it be any clearer?

We’re done here.

Canadian Watchdog

261 comments ↓

#1 Josef on 06.05.12 at 8:29 pm

Holy Garth!! that’s early! what gives? FIRST!!! (oh yeah baby!!!)

Don’t tempt me. — Garth

#2 Jas Girn on 06.05.12 at 8:30 pm

Great article!!!!

#3 Jas Girn on 06.05.12 at 8:34 pm

I am disappointed. I thought I was first -after two long years of hoping. Hahaha. You are the man Garth!

#4 Dave on 06.05.12 at 8:36 pm

Third I guess. I’m kind of happy Toronto is finally starting to see the light. Maybe we’ll buy in a couple years.

#5 I'm stupid on 06.05.12 at 8:38 pm

What will you write about when housing does correct?

You will be amazed. — Garth

#6 Uh Oh Canada on 06.05.12 at 8:41 pm

After the Olympics my parents home was worth 1.2 million in Vancity. Just got some legal papers on it- the house is now worth only 940k. This price drop is in less than 2 years.

#7 Slim Jim on 06.05.12 at 8:41 pm

Garth, what are you hearing about “Skatch” these days. You know the province that only a mother could love.

#8 Steven Rowlandson on 06.05.12 at 8:50 pm

Garth there are lies, damned lies and statistics!
As the sales and prices of real estate collapse, home owners and realtors will be in denial all the way to the bottom. I just got off the phone with my younger brother who is a york region police man and he makes more than a hundred grand a year. Fat cat silly servants!
Any way he asked me about my job search and I told him all there is, is minimum wage jobs. Can you say not good enough?
I can. Those minimum wage jobs are why real estate prices must go all the way back to mid 1960s levels before todays minimum wage pay rates mean any thing. Four hundred to five hundred a week isn’t too shabby if you can buy a 1200 to 1500 square foot home on a lot for 20 to 30 grand any where near a job.
Otherwise what is the point?

#9 GTA realtors in a Panic on 06.05.12 at 8:52 pm

Sales are falling through in the GTA as people are either backing out or simply can not qualify in this monster housing bubble which have reach the ponzi stage just before it crashes which it has started to do. Realtors in the GTA and across Canada are in an all out panic and you can see that panic from the countless never ending day and night posts. Realtors are hoping you are stupid and buy now before price crash 50%.

#10 Aaron - Melbourne on 06.05.12 at 8:54 pm

From Melbourne where we are commencing PHASE FIVE

aka The SUCKER RALLY

**Someone could easily erase the benefits of any recent price falls, not to mention comprise potential future capital growth.

There’s no doubt that conditions are better for buyers than they have been in a couple of years, at least in most capital cities. There are eyes to be picked out of the market, in other words.

Spending big might a recipe for getting a property in this ”buyer’s market”, but it doesn’t sound like one for making a good buy.**

http://theage.domain.com.au/home-investor-centre/blogs/domain-investor-centre-blog/buying-in-a-buyers-market-20120605-1zta1.html

#11 lee on 06.05.12 at 8:55 pm

Why won’t new immigrants keep real estate afloat in toronto. Lee

#12 West Side Survivor on 06.05.12 at 8:56 pm

My realtor told me that there were 30 price reductions in Vancouvers west side YESTERDAY alone! And still CKNW had a guest on saying we’re a world class city and when you’re in a world class city – prices will always be crazy. Same old crap-It’s different here….yeah right.

#13 Tonino, Nonno Nicola's Grandson on 06.05.12 at 8:57 pm

#183 Big Rider

“In case you need clarification ,with ownership rates at 37% there are a whole lot more potential buyers (63%) then if ownership rates are up at (67% already in T.O case)”

Once again Big Rider these stats you and Captain Garth cite are referring to are for Manhattan and not the other 4 boroughs which are on par with Toronto. The potential buyers in Manhattan will never reach 67% because it will always be prohibitive to buy there. Manhattan is an island (literally and figuratively)all on its own. The other 4 boroughs that make up NYC are nothing like Manhattan and cannot be lumped into a general statement of home ownership versus renters average.

#14 bobbyToms on 06.05.12 at 9:03 pm

When will home prices drop in London? Industry is getting whalloped here!

#15 randman on 06.05.12 at 9:05 pm

“Everyone wants a solution, so I will provide one. The US government should simply cancel the $230 trillion in derivative bets, declaring them null and void. As no real assets are involved, merely gambling on notional values, the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system. The financial gangsters who want to continue enjoying betting gains while the public underwrites their losses would scream and yell about the sanctity of contracts. However, a government that can murder its own citizens or throw them into dungeons without due process can abolish all the contracts it wants in the name of national security. And most certainly, unlike the war on terror, purging the financial system of the gambling derivatives would vastly improve national security.”

http://www.globalresearch.ca/index.php?context=viewArticle&code=ROB20120605&articleId=31272

#16 bubu on 06.05.12 at 9:08 pm

many on this forum have high expectations that prices will come back to normal ( 3 times average income for the average house). it’s not going to happen… yes, the prices will go down from $1.2M to $750k.. so? does it make a difference for the average family? i don’t think so…

#17 BPOE$$$$ on 06.05.12 at 9:13 pm

And CTV Vancouver is picking up the baton of Globals BPOE real estate feel good smug city campaign.

I’m presently watching the breathless feature at 6.10pm local time on the nightly news about the listing of James Island for only 75 million dollars.

Give them bread?.. Are you kidding, here is a circus.
http://tinyurl.com/8a2f344

Let them eat cake. Or their “equity”. Whichever lasts longer.

Carpe diem, bitches! ;)

#18 jess on 06.05.12 at 9:13 pm

federal investigators are now investigating whether BP representatives lied to Congress about the amount of oil leaking as a result of the disaster
=========
Is this why the use of email is down?

BP’s Subpoena of Scientists’ Emails Sparks Concerns

BP has sparked concerns over academic freedom after obtaining thousands of confidential emails from scientists who studied the 2010 oil disaster in the Gulf of Mexico. The scientists, Richard Camilli and Christopher Reddy of the Woods Hole Oceanographic Institution, estimated 4.9 million barrels of oil gushed into the Gulf after the Deepwater Horizon explosion. Earlier this month the scientists were forced to hand over more than 3,000 confidential emails after BP obtained a subpoena. In an opinion piece, the scientists condemned the lack of legal protection for scientific emails and said they are concerned not just about invasion of privacy, but about “the erosion of the scientific deliberative process.” The duo says the emails mentioned dead-ends and weaknesses confronted in the course of research, and said incomplete thoughts could be intentionally taken out of context. In related news, federal investigators are now investigating whether BP representatives lied to Congress about the amount of oil leaking as a result of the disaster.

#19 Canadian Watchdog on 06.05.12 at 9:13 pm

Just for the record. Toronto condo listings for Central, East and West (416) just hit an all time historic high. http://s17.postimage.org/p6flrujel/Picture_5.png

In addition, area C15 (Bayview/Don Mills) had some record sales over the past few months http://postimage.org/image/4zgenuwmf/ only to met with nearly four times the amount of listings http://postimage.org/image/5erogvijr/ sending the sales to listing ratio to a lousy 30% for May. http://postimage.org/image/soa08tump/

This was peak season. Now the market will have to cope with falling sales for the rest of year while the completion of 10,000 more condos comes online this year.

Did I mentioned Red Pin listings nearly hit 34,000 yesterday? http://i49.tinypic.com/i2sroj.png

Lastly, a shocking chart showing GTA sales by price range http://postimage.org/image/mg7nghr53/

#20 Freedom First on 06.05.12 at 9:14 pm

Courage. Love the title and the pic depicting it today.
Garth, your pathetic blog has, up until now, been informative, witty, and humorous, as well as always interesting. However, now, with what is happening in RE in Canada, I am sure: “We ain’t seen nothing yet:)” and your blog is about to move up a notch(who thought it possible?) in being “fascinating and amazing” as the collapsing drama ensues.

Although I have been treated with disdain, after selling my bungalow for a 30% profit in only a few years, and my bungalow was only 50% of my net worth at time of sale, I, and my thinking was shunned. Now, I do not wish ill on anyone, but will I feel sorry for these same bubble buyers……no. I like: cash, diversified assets, no debt, income streams, profits, and good deals.

#21 BPOE$$$$ on 06.05.12 at 9:16 pm

oops sorry. 75mm

and Global picked up the same story.

lo and behold.

Their spin. Hey 75mm .. big deal. with the acerage. its ONLY two dollars and 88 cents a square foot.

Your digs at 2100 bucks per at Fairmont Pac Rim.

Your’re richer than you think. LMFAO.

The Emperor has no clothes and thinks hes modelling Hugo Boss.

#22 jess on 06.05.12 at 9:17 pm

Barclays in frame for new offshore tax fraud allegations Treasure Islands
Jun 5 – “The Financial Times is reporting that a Milan judge has said that Alessandro Profumo, the former head of Unicredit bank, is to stand trial along with 16 other Unicredit officials and three from Britain’s Barclays bank, for involvement in tax fraud
http://taxjustice.blogspot.ca/

#23 Gmaz on 06.05.12 at 9:18 pm

If New Listings have flooded the market and bidding wars have stopped, why have prices gone up? Buyers are required to pay asking price?

Any economic theory behind this?
Also, what areas of the 905 in particular are on fire?

#24 Smoking Man on 06.05.12 at 9:18 pm

Garth said.
It took courage, But, then, being a contrarian always does.

I have a different word for contrarian

contrarian=track 5er

#25 T.O. Bubble Boy on 06.05.12 at 9:19 pm

Garth – how come “Author, Blogger, Financial Advisor, and former MP” didn’t get a call out in the Top 1%?

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/who-are-the-richest-1-per-cent-in-canada-theyre-not-just-ceos/article4231232/

One of the top comments is from a former tar sands worker, offended that he and his old buddies would have qualified for the Top 1% ($230,000+ income).

I would have never thought a 1% would be UPSET to qualify for this ‘club’.

#26 Macrath on 06.05.12 at 9:20 pm

Your book After The Crash (2009) talks about Carney threatening to raise rates. He has been singing the same tune and doing nothing for a long long time.
Credibility = nil

He did. Fail. — Garth

#27 Sebee on 06.05.12 at 9:21 pm

Courage? The type you need to but real estate today?

#28 Steven Rowlandson on 06.05.12 at 9:22 pm

The application of physics to explain financial collapse.

http://www.silverdoctors.com/economic-collapse-for-dummies/

#29 Victor on 06.05.12 at 9:23 pm

S&P lowers outlook on Genworth on slower economy, high consumer debt

Jun 5, 2012

…“With higher interest rates, debt servicing may come under pressure, especially for high loan-to-value borrowers. The combination of macroeconomic factors may begin to weigh on housing prices. In fact, the pace of price appreciation has slowed in most major real-estate markets across Canada…. We are projecting a mid-single-digit decline in average house prices in the near term.

According to S&P, Canadian borrowers are more susceptible to shocks such as a sharp rise in interest rates or a drop in employment levels, which as a result could become catalysts for a spike in default rates and a hard landing in housing prices.

http://business.financialpost.com/2012/06/05/sp-lowers-outlook-on-genworth-on-slower-economy-high-consumer-debt/

#30 Dodged-A-Bullit-In-Alberta on 06.05.12 at 9:25 pm

Greetings: Canmore Alberta, where the chickens come home to roost!!!!! The bellweather of the Calgary real estate market. A true sinkhole!!

#31 Smoking Man on 06.05.12 at 9:26 pm

One thing I noticed in last two weeks in the hood, all of a sudden nothing selling.

Is it a seasonal trend as sales and price dive from june to spring, is it the herd has bought the MSM bubble talk. or is it prices are absolutely nuts round here.

Don’t care just bought a killer boat. at a killer price. got to drive to usa to pick it up. But in two years will sell for what I paid.

That’s how a smoking man rolls.

#32 Terces on 06.05.12 at 9:27 pm

Reporting in from the US of A – Spokane to be exact after traveling for months and witnessing varying levels of carnage in the real estate world. We have a little more time here while we wait for a new transmission and have talked to lots of people on the street. Things are very bad here. House prices are bizzare cheap. There is lots, and I mean lots of scary crime – house break ins, car break ins as people try to survive. Even our hotel hands out a written warning on check in about car theft.

This place is not more than an hour from Canada. I am not saying this will happen or not in Canada. It the risk is there.

Why in the world would anyone with half a brain stick their head in the real estate noose when this looming nightmare is so close?

#33 Smoking Man on 06.05.12 at 9:31 pm

#29 Victor on 06.05.12 at 9:23 pm

Everything MSM posts is agenda driven from high up, outherwise we would be talking how did building 7 fall.

Machine wants the housing insanity to cool with out job killing rate hikes, the second this starts to look like a crash, MSM will pump and the track 6ers will open wide and swallow. that’s how it is here.

#34 Kenny Banya on 06.05.12 at 9:31 pm

“babu
many on this forum have high expectations that prices will come back to normal ( 3 times average income for the average house). it’s not going to happen… yes, the prices will go down from $1.2M to $750k.. so? does it make a difference for the average family? i don’t think so…”

My point exactly, prices are so cuckoo that even a 30-40% drop really doesn’t make much different to most of us. Oh gee, I could buy a beat-up semi down by the highway on-ramp for “only” 600k instead of 900k.

However, I am one of those true believers who thinks prices will return to 3x income or so. When the bust comes banks “discover” (as if they didn’t know all along) that most people aren’t creditworthy, and so the two-income young families that are currently screwed suddenly have a lot of opportunities.

Houses in my neighborhood cost $250k in 2005-06, and now they cost around $900k. I don’t see why it’s “not going to happen” for them to return to exactly those levels, given that the economy is probably worse, fewer qualified buyers, neighborhood arguably less desirable with more crowding and condo-building going on.

Can’t wait to see it…

#35 Silver on 06.05.12 at 9:33 pm

Ahhhh…

So thats why everyone at “B.C. Assessment” was so co-operative today….

panic at the values they underwrote… in the market…

being questioned…

could it be… they could be held a… accountable for an evaluation….

Silver

#36 jess on 06.05.12 at 9:33 pm

How Bank of America Execs Hid Losses—In Their Own Words
by Cora Currier
ProPublica, June 4, 2012, 4:50 p.m.
Merrill Losses Were Withheld Before Bank of America Deal
http://www.propublica.org/article/how-bank-of-america-execs-hid-losses-in-their-own-words
Merrill Losses Were Withheld Before Bank of America Deal
By GRETCHEN MORGENSON
Published: June 3, 2012

http://www.nytimes.com/2012/06/04/business/bank-of-america-withheld-loss-figures-ahead-of-merrill-vote.html?_r=2&pagewanted=1&hp

#37 Smoking Man on 06.05.12 at 9:35 pm

#226 John G. Young on 06.05.12 at 8:50 pm

Caved made the store, have the bottle on the coffee table and having a staring contest with it, it has mean cold eyes not opened yet.

See if I can do this

#38 [email protected] on 06.05.12 at 9:38 pm

What are the government implications of falling house prices – does it mean reductions in the funds available to municipal governments and in the provincial revenues collected from transfer fees? Garth, are we looking at rapidly rising property taxes and PST in BC?

#39 FI Guy on 06.05.12 at 9:41 pm

#29 Victor – I find mortgage insurance companies fascinating. They appear to operate like the risks are similar to, say, life or car insurance, of which claims are predictable and stable. Rather humorous. I cannot believe anybody in this environment would own Genworth stock. The company is bound to eventually cave under its inadequate policy liabilities.

#40 Foggy on 06.05.12 at 9:46 pm

Facebook is dragging down other social media stocks as well. Groupon has fallen 56% this year. It is worth less now than the $6 billion Google offered for it. These type of stocks all seem to have a big hype start-up and then a relatively short lifespan.

http://money.cnn.com/quote/quote.html?symb=GRPN&source=story_quote_link

#41 Macrath on 06.05.12 at 9:48 pm

What! A couple of quarter point moves in 5 years. He had to do something to justify his job. He should be replaced with an algorithm.

#42 Keeping the Faith on 06.05.12 at 9:49 pm

Stevenson … Where are you?
The thought of the un-employment line getting you down?

Suffer you realtor dog … pissed your bed now you have to sleep in it.

#43 Paolo on 06.05.12 at 9:51 pm

GTA…

I grew up in Downsview which was a 1950s suburb of Toronto. The 401 runs through it. My family bought a bungalow back in November 1974 for something like $84,000 which I know relative to incomes back then may have been normal and still a heck of a lot of money at the time when $10,000 bought a really, really nice car.

Growing up it was a working, blue-collar middle class neighbourhood fun of Italian immigrant families who finally made the Canadian Dream a reality. Homes bought and paid for by mainly factory and construction jobs, both parents holding full time jobs.

A block from my elementary school some builder bought a modest home, cut off the top and transformed this basic shelter into a McMansion (there are others in the area). It’s now finished and the ‘For Sale’ sign is out front. House looks completely out of place next to post war bungalows and small homes which flank it.

My Dad (shocked) informed me it was on the market for 1.2 million and I thought well it’s priced for the bully bid/bidding war stupidity.

Regardless, no matter how many times I see stuff like this it reminds me of the inevitable.

The Canadian Real Estate Meltdown is upon us? I think it is happening and obviously gaining momentum.

How long before it guts the middle class?

Today Carney is out of ammunition and stupidity. Barn door was left open years ago.

Yes Veronica, the train wreck is in progress.

#44 futureexpatriate on 06.05.12 at 9:53 pm

“What will you write about when housing does correct?

You will be amazed. — Garth

What? That you and we should all live so long? ;)

#45 Claudia on 06.05.12 at 9:56 pm

Thank you, thank you, thank you for this blog! I finally managed to convince my 70-year-old parents to put their Burnaby home on the market earlier this year. After a month on the market and a 15% price reduction, it sold mid-March to the first and only buyer that put in an offer.

I’m sure they’d get much less for it now, especially since several of their neighbours have recently decided to put their homes on the market. My parents lived on tenterhooks for two and a half months, worried the buyer would forfeit his 5% deposit if housing prices plunged before they were scheduled to hand over the keys on June 1st.

Fortunately, the sale went through and my parents no longer have the bulk of their net worth tied up in their home. Whew.

As for me, I’m renting for the foreseeable future!

#46 Tim on 06.05.12 at 9:58 pm

A decent two bedroom condo on the west side goes for around half a million. If the market drops 20 percent, then it will still be 400,000. How many will rush out to buy a two bedroom condo for 400,000 when you can rent one for 1500/month and not pay 300 a month in condo fees and can always move if- I mean when a leak is discovered?

#47 Tim on 06.05.12 at 10:00 pm

re # 18
If those BP folks lose their job, they can always join neo-con Harper and his band of media-muzzling merry men

#48 Axehead on 06.05.12 at 10:07 pm

Awesome pic, great message, nuff said.

#49 GTA realtors in a Panic on 06.05.12 at 10:14 pm

S&P lowers outlook on Genworth on slower economy, high consumer debt

Jun 5, 2012

…“With higher interest rates, debt servicing may come under pressure, especially for high loan-to-value borrowers. The combination of macroeconomic factors may begin to weigh on housing prices. In fact, the pace of price appreciation has slowed in most major real-estate markets across Canada…. We are projecting a mid-single-digit decline in average house prices in the near term.”

According to S&P, Canadian borrowers are more susceptible to shocks such as a sharp rise in interest rates or a drop in employment levels, which as a result could become catalysts for a spike in default rates and a hard landing in housing prices.

http://business.financialpost.com/2012/06/05/sp-lowers-outlook-on-genworth-on-slower-economy-high-consumer-debt/
——————————————————————–

Its to bad vancouver has already seen double digit declines and this in just under four months. Imagine a year out it might hit 30%… Yes vanvouver will see 30% and Toronto should be 20-25% this time next year. It’s going to be a monster of a housing crash.

#50 Mr Buyer on 06.05.12 at 10:17 pm

#16bubu on 06.05.12 at 9:08 pm
many on this forum have high expectations that prices will come back to normal ( 3 times average income for the average house). it’s not going to happen… yes, the prices will go down from $1.2M to $750k.. so? does it make a difference for the average family? i don’t think so…
………………………………………………………………
I think you need to take a look at worse case scenarios in the US and around the world. When this bubble CRASHES life is going to become very realistic on many fronts but how am I supposed to know. BUYER BEWARE THE BUBBLE HAS TOPPED.

#51 disciple on 06.05.12 at 10:18 pm

I’m happy to report that I’ve captured the attention of Princess Diana Herself! Never in my wildest dreams…check out my response to her…

#52 GTA realtors in a Panic on 06.05.12 at 10:21 pm

babu
many on this forum have high expectations that prices will come back to normal ( 3 times average income for the average house). it’s not going to happen… yes, the prices will go down from $1.2M to $750k.. so? does it make a difference for the average family? i don’t think so…”
——————————————————————

Oh no realtor babu? That’s what realtors in the US were saying and now in some places it’s below 3 times earnings. It’s going ot be a nasty housing crash and every realtor deep down inside knows it. Why else are they posting on Garth’s blog? spread the word people and Garth keep the articles and facts coming. LoL no wonder realtorS hate Garth…they hate fACTS.

#53 City Slicker on 06.05.12 at 10:24 pm

“To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.”

Garth if he pulls the stimulus it will decimate the housing market not help it. Am I missing something here or is he indeed working for the Illuminati like I’ve pointed out in the past??

#54 Tron on 06.05.12 at 10:24 pm

I’m not the most educated guy, 2 years of University economics then dropped out. Built, bought and sold a couple of companies and know how to read financial statements well enough to know if the dog hunts. I decided to see if I could figure out how the HPI is determined and below is the explanation I found on the REBGV site. To understand the calculation I’ll assume at least a you’ll need a statictics degree with a quantum physics minors. To me it looks more like whipped cream on top of a turd, but hey, I’m just an average home buyer and should understand this right REBGV?

Model specification
Designing a reliable MLS® HPI requires that the regression model be adequately specified. Model
misspecification can arise in a number of ways. A rigorous set of statistical tests is used to identify and
resolve potential problems arising from model misspecification. In a linear regression, one of the main assumptions is that there are no remaining multicollinearity1 phenomena. Stepwise regression is employed to remove excessive multicollinearity by selecting only those explanatory variables that contribute significantly to explaining price variations. As a diagnostic test, variance inflation factors (VIF) are used to highlight and remove variables with a high degree of multicollinearity.
The Akaike Information Criterion (AIC) allows comparing models that differ with regard to their
functional form, variable specification, or both; as such, it can aid in model selection based on how close
values predicted by the model are to the real data. The AIC is used to test which of the Linear or Semilog
functional forms provides the best fit. To accommodate nonlinearities, the living area, lot size and
age of properties are transformed into non-linear forms. Results of the AIC suggest the use of the semilog
form over the linear form. Additionally, the Ramsey RESET Test is used to determine if some form of non-linear transformation is required within the model specification (without indicating how to amend the specification).
The RESET test estimates an auxiliary regression using the estimated Yi from the original regression:
2 3 4 1 1ˆ ˆ ˆ … ˆ ˆ ˆ ˆi i ni ni i i i Y =  +  X + +  X +Y +Y +Y i=1, 2, … N where i Yˆ
is raised to the 2nd, 3rd and 4th powers and re-inserted in the initial hedonic equation as additional independent variables. The test then compares the original and the auxiliary regressions via F
statistic test. The hedonic function is shown to be non-linear if at least one of these n i Yˆ added terms
emerges as statistically significant. In cases where the equation fails the Ramsey RESET test, the AIC confirms the functional form. That the age of a property cannot be non-linearly transformed may explain the failure at the third and fourth degree for markets where property age is modelled as a binary variable denoting age range.
1 Multicollinearity is a statistical phenomenon in which two or more exogenous variables in a multiple regression model are highly correlated.

#55 GTA realtors in a Panic on 06.05.12 at 10:28 pm

realtor smokingman #33

You know very well Canada was set up for this housing bubble in order to crash it along with the middle class. It’s from the SAME playbook we seen in the US. People in the US using their homes as ATM’s …people in Canada taking out HELOC’s…LOL smokingman you either pretend to be smart or you are really stupid. They are going to crash the Canadian housing market JUST like the US. Oh realtor smokingman looks sad. Oh ya you are not a realtor. It’s going to be a nasty US style CRASH in Canada. Connect the dots smokingman you are so smart.

#56 Tron on 06.05.12 at 10:29 pm

Looks like the formula got messed up…here’s the pdf just in case you are a genius and want to read it.
http://www.rebgv.org/sites/default/files/HPI%20Methodology2012.pdf

#57 Inglorious Investor on 06.05.12 at 10:31 pm

“We may think about discussing the idea of possibly considering a potential withdrawal of stimulus. Certainly we may table the option to keep this option open––weather permitting. Maybe.”
– Mark Carney

“Money bombs ’till the cows come home, baby! Or at least 2013. Or was that 2014? Whatever.”
-Benjamin S. Bernanke

“Uhhhh…”
–Mark Carney

#58 John G. Young on 06.05.12 at 10:39 pm

#37 Smoking Man on 06.05.12 at 9:35 pm

“Caved made the store, have the bottle on the coffee table and having a staring contest with it, it has mean cold eyes not opened yet.

See if I can do this”

Thanks for the update. Reminds me of the ending of “A Million Little Pieces”, where the author, James Frey, finished rehab and tested himself by going to a bar, ordering a drink and having the same kind of staring contest. He didn’t drink it — or so he said; it’s since been proven that the book was a work of fiction. Still, it’s a good read.

I remember doing the same thing with my drug of choice (cocaine), and I’ve heard similar stories from lots of people. While I wouldn’t presume to tell you what will work for you, others who work in the field would certainly caution against exposing yourself to the “people, places and things” associated with your substance use.

Keep us posted about whether or not it worked for you — and even if it doesn’t you’ll have learned something, so don’t think of it as a failure.

John

PS Don’t fall into the trap of thinking that you need to be drinking in order to be able to write…

#59 Not 1st on 06.05.12 at 10:44 pm

Garth, are there any preferreds out there doing better than 5.5%? any 6 or 7% yeilders?

#60 Sask Girl on 06.05.12 at 10:49 pm

Any thoughts on how the Regina & Saskatoon markets will pan out? Everyone here in Regina keeps saying the market will never crash.

I told a friend now is the time to sell if he wants to sell. He’s putting his house on the market next week. Some think he’s crazy. I think he’s wise.

I continue to rent while some say I should buy a condo since I can’t afford a house. I tell them I’m not one of the crazies. I’m patient enough to wait out the storm that’s brewing.

#61 Mr Buyer on 06.05.12 at 10:51 pm

House Baloney Index….Well first you take total people all our real estate agents even speak to each day (including family, I mean everyone and if you speak to the same person twice then that is two people). Next you total all those people all those real estate people talk to and multiply that by 8 then divide that product by 0.000978, we will now call this number total sales. Next you take the highest price ever paid for a house in the entire history of planet earth and divide that by 0.087. Now multiply that by total sales then divide that by total sales and voila there is the average sale price of a house in Canada for yesterday. Now compare that number to the average sale price calculated the day before yesterday by the same means and find the difference between the two and this number is the raw House Baloney Index. Next multiply the raw House Baloney Index by itself and then immediately divide it by itself and there you have it the House Baloney Index (look mommy I made a KaKa). PS…if the index ever calculates to zero simply round up to 5.

#62 Not Even the MSM Believes the RE Index on 06.05.12 at 10:59 pm

#54 Tron on 06.05.12 at 10:24 pm I’m not the most educated guy, 2 years of University economics then dropped out. Built, bought and sold a couple of companies and know how to read financial statements well enough to know if the dog hunts. I decided to see if I could figure out how the HPI is determined and below is the explanation I found on the REBGV site. To understand the calculation I’ll assume at least a you’ll need a statictics degree with a quantum physics minors. To me it looks more like whipped cream on top of a turd, but hey, I’m just an average home buyer and should understand this right REBGV?

Model specification
Designing a reliable MLS® HPI requires that the regression model be adequately specified. Model
misspecification can arise in a number of ways. A rigorous set of statistical tests is used to identify and
resolve potential problems arising from model misspecification. In a linear regression, one of the main assumptions is that there are no remaining multicollinearity1 phenomena. Stepwise regression is employed to remove excessive multicollinearity by selecting only those explanatory variables that contribute significantly to explaining price variations. As a diagnostic test, variance inflation factors (VIF) are used to highlight and remove variables with a high degree of multicollinearity.
The Akaike Information Criterion (AIC) allows comparing models that differ with regard to their
functional form, variable specification, or both; as such, it can aid in model selection based on how close
values predicted by the model are to the real data. The AIC is used to test which of the Linear or Semilog
functional forms provides the best fit. To accommodate nonlinearities, the living area, lot size and
age of properties are transformed into non-linear forms. Results of the AIC suggest the use of the semilog
form over the linear form. Additionally, the Ramsey RESET Test is used to determine if some form of non-linear transformation is required within the model specification (without indicating how to amend the specification).
The RESET test estimates an auxiliary regression using the estimated Yi from the original regression:
2 3 4 1 1ˆ ˆ ˆ … ˆ ˆ ˆ ˆi i ni ni i i i Y =  +  X + +  X +Y +Y +Y i=1, 2, … N where i Yˆ
is raised to the 2nd, 3rd and 4th powers and re-inserted in the initial hedonic equation as additional independent variables. The test then compares the original and the auxiliary regressions via F
statistic test. The hedonic function is shown to be non-linear if at least one of these n i Yˆ added terms
emerges as statistically significant. In cases where the equation fails the Ramsey RESET test, the AIC confirms the functional form. That the age of a property cannot be non-linearly transformed may explain the failure at the third and fourth degree for markets where property age is modelled as a binary variable denoting age range.
1 Multicollinearity is a statistical phenomenon in which two or more exogenous variables in a multiple regression model are highly correlated.
++++++++++++++++++++++++++++++++++

So what we have firmly established is that simple calculations like “average” “mean” and median are now incorrect as they show that the markett is cratering.

As I said yesterday, these bozo’s need to have a formal complaint filed against them with Consumer Affairs, so that’s what I’m going to do.

BPOE and Market Bull, time for a CYA!!!!!!

#63 Mr Buyer on 06.05.12 at 10:59 pm

Hold the line men, hold the line. Remember your training and you will survive. THERE IS NO BUBBLE. MARKETS ARE STABLE. CITE THE HBI. Prey upon their weakness, the old buttons still work. HOLD THE LINE. WE WILL NOT LEAVE YOUR SMOLDERING ENTRAILS ON THE FIELD. HOLD THE LINE.

#64 Harlee on 06.05.12 at 11:10 pm

#11 lee
About immigrants in Toronto: No doubt some will stay in Toronto,work and buy housing. Others will leave though and head to Western Canada for jobs or perhaps to the Maritimes ,where the unemployment rate is higher but the housing is the cheapest in the country.Just because a certain % of immigrants settle in Toronto at first doesn’t mean that they will all stay in that city for long.People are more on the move than ever now.

#65 Mr Buyer on 06.05.12 at 11:13 pm

Meanwhile in fortress TO (AKA Manhattan North) the last bastion of THE BUBBLE…
Well here’s our SITREP. We have lost all outposts, we are the only ones left. We are still rocking and rolling and we are going down fighting. Future reps will remember this final sales push and count themselves weaker for not being part of it. There are still people out there to be victimized. They have YOUR commission in their pockets. Are you going to let them escape? ARE YOU? That’s 12 months of payments on your beamer and you are going to let truth and conscience get in the way. These are heady days and great people are going to become filthy rich. Do not puppy out now. Hit all the old buttons, lie if you have to, just HOLD THE LINE.

#66 Observor on 06.05.12 at 11:14 pm

OLD AGE PENSION AND CPP AS WELFARE??

Yesterday at comment 221 Garth said:

“You will collect far in excess of what you ever contributed, since the structure of the CPP is pay-as-you-go, meaning your pension benefits today are being subsidized by current taxpayers. Never think you actually ‘earned’ this with your premiums. As for OAS, it is dole. Pure and simple. You contributed nothing. BTW, criticizing me personally for stating an economic fact is beneath you. — Garth”

Hmmm well, an interesting viewpoint perhaps designed to invoke a reaction.

CPP is not totally (if at all anymore) pay as you go since it is sitting on a mountain of stock and bond investments. Of course we will take out more than we put in, that’s how investing works. CPP is designed to take in premiums, invest them and pay out the returns later. Yes it was pay-as-you go when it started some 50 years ago. Not now.

Anyone getting CPP has earned it.

Old age is a bit different but is not exactly dole for anyone who paid hefty income taxes all their lives. It might be charity for those few people who paid little in taxes but now collect it fully.

In any event who cares if it is charity/dole or not? For most people CPP and old age pension are a legitimate and significant part of their retirement income. To feel any guilt about where the money comes from is a waste of time.

Those of you with higher incomes and higher ambitions should aim to earn enough in retirement to have 100% of the old age pension clawed back. Why not? by helping yourself earn a higher income in retirement you help fellow taxpayers.

Dole indeed! May a pack of depends-wearing government-pension-collecting geezers bearing baseball bats take revenge on the Hummer.

#67 dd on 06.05.12 at 11:16 pm

Carny – ya we shall see how bold he is when the ECB cuts its rate by a quartet point in the next while. BTW little fan fair about the Aussy rate cut (twice) the last 2 months. Brazil – another rate cute. In case u missed the memo the world central banks are going into stimulas mode over the next while.

#68 OwlEyes on 06.05.12 at 11:18 pm

This is off-topic but I have to share it:
http://www.thestar.com/news/article/1206543–tumbling-sound-wall-leaves-homeowners-facing-deafening-trains-and-a-deaf-ear-from-bureaucrats?bn=1

The point is that 22 years ago, the developer was ordered to build a sound wall by the train tracks. They built a crappy wall. Now it fell down. Who will re-build the wall? One would think that the developer might do it. CN’s track was there first so can they really be forced to do it (they’re making sounds about helping)? The homeowners might be expected, but this is not the kind of thing you hire a country boy with an excavator to do. It’s a serious piece of engineering. Should the city (i.e. everyone else) have to pick this up?

We really let developers get away with too much! I shudder to think of the different kinds of mess we’ll see in 15 to 20 years around the GTA.

#69 Doug in London on 06.05.12 at 11:20 pm

The people who laughed at Janey, or thought she was an idiot will soon think she is a genius!

#70 Tim on 06.05.12 at 11:25 pm

Bottom line is that Carney has not raised interest rates. They remain at historic lows for another quarter.

The more important bottom line is that this is irrelevant. — Garth

#71 Snowboid on 06.05.12 at 11:42 pm

“But when the tide turns, sellers resist and cling to an inflated idea of what their property is ‘really worth.”

This is apparent in spades in the Okanagan – what is interesting is the disparity in pricing between the resistance and the ones who now realize it is futile.

Still, nothing seems to be selling here, especially condos. In the small area of Kelowna we prefer there are currently 330 condos listed.

Recent listings near us that should be priced at $ 375K or less are sitting at $ 420K (original sale price $ 464K) while in the same four year old building the penthouse that originally sold for over $ 3 million is now listed for $ 2.2 million! That must definitely hurt!

Like I said before, RE chaos (complete disorder and confusion) in the Okanagan. Where’s my popcorn?

#72 Karie on 06.05.12 at 11:49 pm

I think some boomers will sell their homes but many more will get reverse mortgages. This is because the average person doesn’t know where to put their money.

I thought I flatlined in my investments for the last 12 years but Bottoms Up somehow figured out that I should have made at least 2% so I checked and sure enough, I have made 2.24. Is this worth years of frugality, cancelling cable, resorting to all sorts of money saving tactics?
Instead it makes me feel like taking my HELOC and going on a big vacation.

#73 Arshes on 06.05.12 at 11:50 pm

@ Dorothy
As for Arshes comment (#199), if and when a senior becomes incapacitated enough to require long term care, the family home can be sold to cover the cost. A couple retiring 4 or 5 years from now, will likely not need such care until they are around 80, which in our case is 20 years away. Even if house prices DO crash tomorrow, 20 years allows lots of time for recovery
—————————————————–
Thats assuming they recover, there are gonna be areas that WILL NEVER recover, the only reason people bought there was to get a property, ANY property in this RE bubble. The last RE bubble took 15 years to recover this one will probably take longer. If you have to sell even just a few years early thats gonna be a SOL situation. Things NEVER go as planned, thats why you should always save more and adapt as things come.

#74 2centsCdn on 06.05.12 at 11:50 pm

#28 Stephen Rowlandson
Great work …. I love that demonstration. I saw it a few years ago on Daily Planet. It gives an excellent understanding of leverage and compounding (and how little nudges in the right direction can cause catastrophic booms).
How smart has mankind become when a tiny percentage of the population of top financial executives and politicians can leverage and inter-tangle the hell out of everything (for thie own gain), and paint the industrialized world into so many corners. Where taking corrective measures will cause so much harm and pain that just continuing the insanity seems like the only option.
(jeez! … I’m starting to feel like Kevin Spacey sitting in the back of the car on the movie 7).

#75 John on 06.05.12 at 11:51 pm

Bubu wrote:

“many on this forum have high expectations that prices will come back to normal ( 3 times average income for the average house). it’s not going to happen… yes, the prices will go down from $1.2M to $750k.. so? does it make a difference for the average family? i don’t think so…”

——-

Where would you come up with the idea of “1.2 million to 750.000?”. Wouldn’t that be highly unlikely? Canadian houses are hardly part of a national “housing market”. So how could something built on financial derivatives suddenly and magically “disconnect” on the way down?

As derivatives go, so does “housing”. So how do you think that derivatives thing is going to go anyway?

The drop you mentioned is not only too conservative, it’s just unrealistic.

#76 bubu on 06.05.12 at 11:56 pm

GTA realtors in a Panic, Mr Buyer ,

guys, I’m not realtor and I don’t care too much at the end of the day how much is the price.. I own a house on by hometown and I think I’m going to move back in few years from where I leave… I rent right now and it doesn’t make any sense to buy even if if’s not a big deal for the down payment I have… What I was trying to say is as long as the manipulation will continue and CMHC will insure these mortgages I don’t think the regular guy will be able to afford a house as he did 20 years ago… I hope you are right and the prices will go down as much as you say but there is a big risk then also… unemployment will raise and even if the house will be $250k if there are no jobs ( look at US) nobody is going to buy… and be realistic.. do you thing the government will allow this? this one no.. maybe a future one…. they will do everything they can to keep the prices as high as they can.

#77 Mr Buyer on 06.05.12 at 11:57 pm

#70 Tim on 06.05.12 at 11:25 pm
Bottom line is that Carney has not raised interest rates. They remain at historic lows for another quarter.

The more important bottom line is that this is irrelevant. — Garth
………………………………………………………
Not that you need my two cents but I second that.

#78 Ron on 06.06.12 at 12:00 am

I’m planning to buy a wicked sprawl in 2020. At that point, hindsight will be 20/20. Until then, renting is bliss. It took 5 years for the U.S. to bottom and we’re 5 years behind. Patience and liquidity will prevail.

#79 Mr Buyer on 06.06.12 at 12:01 am

#67 dd on 06.05.12 at 11:16 pm
Carny – ya we shall see how bold he is when the ECB cuts its rate by a quartet point in the next while. BTW little fan fair about the Aussy rate cut (twice) the last 2 months. Brazil – another rate cute. In case u missed the memo the world central banks are going into stimulas mode over the next while.
………………………………………………….
In case u missed the memo about the memo, it does not matter one tiny bit (it may not even impact the timeline). The CRASH is next.

#80 Mr Buyer on 06.06.12 at 12:07 am

#73 Ron on 06.06.12 at 12:00 am
I’m planning to buy a wicked sprawl in 2020. At that point, hindsight will be 20/20. Until then, renting is bliss. It took 5 years for the U.S. to bottom and we’re 5 years behind. Patience and liquidity will prevail.
…………………………………………………….
People love to cite Japan but only regarding interest rates and stuff about an ailing economy but completely ignore the bottom aspect of real estate. As I mentioned a few weeks ago a piece of land we are thinking of building on has lost about $10 or $20 per square meter (I cannot remember clearly) over the past couple of years. That’s decades after the bubble. I think calling a bottom in the US now is way too soon (by a few decades possibly).

#81 bubbles on 06.06.12 at 12:08 am

I just received an eviction notice (for landlord use). Supposedly, she’s moving back into the apartment I’ve been renting from her for over 6 years. I’m pretty sure as soon as I move out she’ll put the place up for sale and never actually move back in. Do I have any recourse if the place appears on the MLS a week after I’ve been evicted?
Any thoughts? Thanks.

#82 furst on 06.06.12 at 12:09 am

A lamb told me so – a poem by Furst

I met a lamb atop a glass tower up high
He said, a deal this good will bring a tear to your eye
You take the price, carry the one
There’s no way to lose, renters will pay you a ton
Didn’t get the math, it made no sense to me
So I signed the docs and became a mortgagee

Courage you say, no it’s wisdom and skill
I’m now a landlord, tenants filling my till
On top of the world, a real estate tycoon
Returns on investment shooting straight to the moon

But wait, why is my account being drained so fast
The balance this month is so much less than the last
Property taxes hurt, maintenance fees burn
Tenants skipped town, now was my time to learn
Losses mount, couldn’t carry the balance
Selling for less than I paid, was apparently my talent

Thousands spent with nothing to show
And why did I do it? Because a lamb told me so

#83 Daniel on 06.06.12 at 12:12 am

@59,

Check out the oil companies. PWT, CPG, KEY anywhere from 6%-8% yield. More risk, but more upside potential also.

#84 Hoof-Hearted on 06.06.12 at 12:20 am

Garth genuflecting in his Bunker uniform in front of Sherry Cooper……whodathunk?

Gotta get my 6/49 numbers…

#85 thinker on 06.06.12 at 12:22 am

I can’t paste a picture here, but the best theory on real estate prices will soon be published. I will try to email it to you Garth.

Simply – TIMELINE

Young couple joins, 100K income, buy’s the condo, the condo owner then sells the condo, making a profit and buys a SFH, the owner then sells out and buys a larger SFH, etc….The condo feeds the whole markets growth. Without it, the cheap tool to access 20X leverage would not be reachable for most to dive into SFH.

Now fast forward a demographic tsunami that is coming to Canada, the amount of SFH to hit the market as people are going to be dropping like flies is about to explode in 10-15years. That is how this bubble will pop in large size as homes will be sprinkled everywhere, not from the condo feeding the frenzy from the bottom.

This same timeline can also be viewed from a cash flow model. Imagine a circle 1. Money comes from geezer to teen (via savings or re-fi on home) teen uses the money to buy condo, and then moves into house. Meanwhile the geezer needs to live so he sells house. If they cannot squeeze retirement + not underwater, the cycle breaks.

This is a real cash flow study.

#86 Casual Observer on 06.06.12 at 12:30 am

#38 [email protected] What are the government implications of falling house prices – does it mean reductions in the funds available to municipal governments and in the provincial revenues collected from transfer fees? Garth, are we looking at rapidly rising property taxes and PST in BC?

My understanding is that Municipal Governments figure out how much they need from property tax revenue and then divide that figure by the total of assessed property values to come up with a “mill rate” or amount of tax per $1000 of property value.

This figure is then multiplied by your assessed value to come up with the amount of tax you owe. If property values fall, they just adjust the mill rate higher at the next assessment in order to keep tax revenues the same. This was our experience the last time property values fell in the 1990’s.

In reality it’s probably a little more complicated, but you get the idea.

#87 Wise guy on 06.06.12 at 12:31 am

Housing will correct here in Canada and if we do go into another recession, people will blame this correction on a recession in 6 to 12 months time and not due to straight economics and affordability.

This downturn could go on for the next 7-10 years in housing in Canada.

If this is just the beginning, what happens when interest rates start creeping upwards, higher unemployment due to another potential recession. Baby boomers selling off their homes in 3-5 years…..

This could get bad folks….very bad!

#88 The American on 06.06.12 at 12:32 am

Holy hell… Seriously?

http://news.yahoo.com/human-remains-delivered-2-canada-schools-235420544.html

#89 Van guy on 06.06.12 at 12:52 am

Boston Bruins goalie Tim Thomas is taking a year off hockey and screwing the team in doing so. All because of this. Here’s what he posted on his facebook page. It could happen. 2008 came as a surprise and the world is still pretty effed up.

http://www.theblaze.com/stories/former-hedge-funders-fearful-forecast-were-looking-at-the-biggest-economic-shock-the-world-has-ever-seen-theres-nothing-we-can-do-to-stop-it/

#90 $$$BPOE#1 on 06.06.12 at 12:52 am

Folks, everything is going great. North of 4th avenue more Sold signs than For Sale signs. Folks, Junius doesn’t read to well. I have been saying for a long time that nothing goes straight up or straight down there are blips along the way called buying opportunites. Vancouver trend is intact and going much much higher. Carney is going to be increasing stimulus not decreasing. The owner always wins and the renter always loses (except short term). The renter is greedier than an owner because he wants to own whereas the owner is already at peace

#91 Arshes on 06.06.12 at 12:54 am

#221 Dorothy
Even OAS is dependent on having worked a minimum of 40 years since the age of 18 in order to receive the max.

———————————————————
Thats incorrect, OAS is based on residency and how many years you have lived in Canada, technically if you have lived all your life in Canada but never worked a day on your life, you will recieve the maximum amount of OAS.

#92 Bill Gable on 06.06.12 at 1:01 am

Smoking Man – although your posts occasionally drive me out of my mind, you are playing with fire – and as a recovering alcoholic, I am asking you to NOT tempt fate with your health and sanity – please STOP playing Russian roulette, by buying a crock and trying to beat temptation on your own.

I can say with alacrity, that alcoholism is deadly. In AA, they have proven that there are only two outcomes from drinking to excess – insanity, or a grinding and painful death.

Although off topic, (I apologize, Mr. Turner), my wish is that you talk to your Doctor NOW, and get into treatment, and include meetings, and a sponsor, in the process.

I have lost too many people that I care for, including both my Parents, because of booze and although we are only connected through this amazing blog – I wish you happiness and sobriety.

If I can do this (23 years, one day at a time) – so can you. You have my sincere best wishes and I look forward to hearing you are OK.

#93 Carpe Diem on 06.06.12 at 1:06 am

#59

you can always get more with more risk. 4-5% in big preferred shares is the best for now unless you have a bigger risk profile than I.

I have a bunch of cash with a conservative investment adviser dude (that makes my income tax so much funner to process) and some cash in junior IT or mining companies.

Your question should include your risk tolerance.

#94 Nostradamus Le Mad Vlad on 06.06.12 at 1:10 am


“We’re done here. Could it be any clearer? But, then, being a contrarian always does.” — One may be a mental contrarian, but one is cash / investment rich, house poor and former neighbors aren’t. No need to gloat, just keep to oneself and follow the gut instinct.

“Since that day, they have been millionaire renters. Common wisdom is so, well, common.” — Compared to royalty, most bloggers here are commoners with sense and it feels really good!

“It’s a stabilizing period.” — Kinda like when a nuke explodes a couple of feet away!
*
#84 Hoof-Hearted — “Garth genuflecting in his Bunker . . .” — In front of Cherry Sherry? Oh no, tell me it ain’t so!
*
Out of interest, what will the final tally for this royal shindig be? ‘Coz it’s the taxpayers who are footing the bill, not royalty! Renting Way better than buying; Spain The west is becoming a very large welfare society, with two classes — very rich and very poor and North – South gap widens; BP Take that profit from Russia and pay the GoM costs / people off; Harper’s ready Are any of us? QE3 is on; Collapse Greece, the USSR, etc. — they’ve all be there / done that. We haven’t; Billionaire Chessman; Greek EZone Exit and Contagion; ECB in a snoozefest; SONY Becoming irrelevant; Germany Riskier thaan thought; CBO Another crisis unless changes are made. That’s as clear as mud; JPM Screwing students like no one else; State Economies Apply that to provincial and federal economies; Stiglitz Doesn’t matter who gets in, NAmerica is done; Costco Strategy good as economy slumps; Electricity Rates Rising; Benefits ‘Owzaboud axing politicos instead, and give working stiffs a tax break?

Moody’s downgrades six German banks; Osborne Asking savers to lend money? I don’t think so! Global Downturn Run away! Run away! Cdn. Pension Plans Y-T-D gains gone; Bond Bonanza Stop it! Spawning from Spain Inflation, etc.; Being Smaller; BoE Cutting rates to 300-year low, and Treasury Bond yields hit historic lows. Coincidental timing? Western Banks The reason why the CIA and Obomba let the drugs flow freely; Bob Chapman moved back into the other worlds; Euro LaLaLand; 0:23 clip Economic collapse for dummies; Govts. jackboots.
*
Surf’s Up! Check the colors on this Hawaiian wave; New Tesla S; UN (Agenda 21 and One World Govt.) looking to regulate food and water consumption, while leading us down the socialist path; Transit Ritual 2012 Two curious pix, one of earth and one of the solar system; California High speed trains kaput? Sex Of The Best Congress keeping it All In The Family; Facial Tumor Five year old. Tumor is roughly the same size as the head; The Higher One Flies, the harder one falls; NATO Enlargement Until it all comes crashing down; China’s smaller army; The Queen and The Pope Not maritally compatible; Growing Potatoes in four square feet.

#95 truth hammer on 06.06.12 at 1:20 am

Dude….there were tear downs . bangers and crack shacks on Vancouver’s East Side……in some of the toughest area’s of what is commanly referred to by realtards as ‘ Mid Ghetto’ ( this is the area between Broadway to Marine and Main Street to Victoria) going for a million…….and the ‘newspapers’ were all agog at the ‘new reality’.

Who couldn’t see this fish swimming back to sea?

Boy , did people in Vancraphole ever get screwed over by the media. and their ‘real estate board…..in any other time folks would be in the streets with flaming torches and sharp pitchforks.

The lies and hype that gets swilled out here to cover up what a truly crappy place it is has some people actually wondering why they can’t double the price of a condo every year…because everyone wants to live here.

To cap this little bottle of boob juice……it looks like there will be an NDP government in on the next selection…….oh yeah people here really do have shirt memories from overconsuming the booze, smoke and the hype. Communism and real estate ……bed fellows from hell folks…get out while you can.

#96 Jane on 06.06.12 at 1:33 am

In Vancouver some realtors are now putting “Too Late!” stickers beside their “Sold” stickers on For Sale signs. I want to add “Paid too much”.

#97 Jane on 06.06.12 at 1:40 am

@81 Bubbles

Ask her if it is going for sale. New owner might want to keep u on as a tenant. If not u get more tome to look for a place. Otherwise, if u r in BC she has to use the official eviction paprwork provided by the Residential Tenancy Act and give u 2 months notice, the second of which is free to u. Do some reading online wih your areas rules and regs. Read your lease/rental agreement carefully. Good luck.

#98 Van grrl on 06.06.12 at 1:48 am

#81 Bubbles:
Contact the Residential Tenancy Branch of your provincial gov’t. This is happening to a friend of mine. She got an eviction based on the owner moving in, but he hasn’t been able to sell his other home as fast as he thought he would- in Vancouver- so has put her house back on the market (he’s only owned it for a year). When she called the Tenancy Branch they weren’t overly helpful and said he has up to 6 months to decide if/when he’ll move in- though she gets only two month’s notice- but supposedly there is recourse (in BC anyway).

#99 TakingResponsibility on 06.06.12 at 1:48 am

“A lamb told me so” – a poem by Furst

Holee Cow, Furst, who knew?

Keep them coming : D

#100 Riding the Pine on 06.06.12 at 2:03 am

#40 Foggy
Your forgetting about Google stocks…far from the same fate as Facebook.

#101 syd on 06.06.12 at 2:17 am

http://www.thestar.com/business/article/1206031–toronto-real-estate-s-sudden-surge-in-gta-homes-for-sale

#102 Wicked as it seems on 06.06.12 at 2:43 am

@59

Brookfield management at 6.45 per cent.
No risk and great management.

#103 FTP - First Time Poster on 06.06.12 at 3:07 am

i remember in the dark days of Q3 2008/Q1 2009 that you had flipped a few props Garth. Are you still doing that now or are you keeping you powder dry for after the dust settles?

#104 Canuck Abroad on 06.06.12 at 3:15 am

I would be interested to know the answer to Bubble’s question as well. I’m assuming Bubbles must be on a month-to-month lease? And if so there’s no recourse available? And the moral of the story is always insist on an annual lease at each renewal? Thanks in advance.

#105 Canuck Abroad on 06.06.12 at 3:24 am

16 / Bubu – “…yes, the prices will go down from $1.2M to $750k.. so? does it make a difference for the average family? i don’t think so…”

Really? I think the effect of watching your neighbours’ homes drop in “value” by over a third will be devastating, even if your modest little house which used to be “worth” 300k could now only fetch 200k. Suddenly you will feel like you’ve lost 100k even though of course you haven’t because you never had the 300k. People hate to lose money. Fear of losing money is an even stronger emotion that greed. Watch the thunderstruck look on your neighbours’ faces as this decline takes hold. It will be something to behold.

#106 Canuck Abroad on 06.06.12 at 3:41 am

And just one final point… If you feel you have “lost” 100k, even if you haven’t, you will spend less. You will not draw down on the HELOC to re-do the basement bathroom or landscape the back garden. Less spending directly hits the economy. Companies cut back; they invest less and start laying off people. Laid off people have to sell their homes, either because they can no longer afford them, or because they have to move to a new job. The home price decline snowballs. If you are one of those people forced by circumstances to sell, a price decline of 1/3 will affect you after all, even if it doesn’t seem so today.

#107 Buy? Curious? on 06.06.12 at 3:43 am

There are two types of feelings I have for you Garth, I love you and I love you a lot. I’m going to go with the former because yesterday I asked to see more pictures of nerds motorboating, today’s picture of a soldier hugging his girlfriend is a fair compromise.

But enough about us, I want to share some news with everyone. My cousin, no kids (Human Race, you’re welcome) just sold his house in Halifax this weekend because he’s moving to Newfieland. He said that it took longer to put the sign up in the front yard. Also, a buddy of mine too, sold his house in Markham at break-neck speeds. He’s moving to Ohio. What’s the point of my first person account of this crazy real estate market? Both of them didn’t want to tell me the price! And these guys are almost as big of jerks as I am. If they made any kind of profit, they’d be dancing in front of me dancing like Terrell Owens after scoring a touchdown. They’re happy, but not like as if they won the lottery, more like they just missed a runaway tire travelling at 100km down the 407.

#108 Fort Mac Flatlander on 06.06.12 at 4:02 am

#60 Sask Girl

As a Saskatchewan expat and possible returnee I was fortunate enough to sell my house in Saskatoon last year and join the truly free world of renting. There is optimism and plenty of hype in Saskatchewan, but the jobs havn’t materialized yet. Everyone is planning for tomorrow with the assumption “if you build it, they will come.” This mentality decapitated the market in Red Deer over the last 4 years, where at one point there was 5 houses built for every new family.

Why buy a $250,000 “crack shack, when for $1800/mo you can rent a nice apartment in Cathedral (Regina), or Broadway (Saskatoon). No headaches. No stress. No matter how hard you try to make the numbers add up it is a losing proposition.

Personally, I am not buying a home there until prices return to 65% of those in Calgary/ Edmonton.

Thanks. Just my 2 cents.

#109 Tony on 06.06.12 at 4:24 am

It’ll look good when all the bozos in Toronto who were too stupid to sell lose all their equity. I still just shake my head at the sparse listings. Many of these people could have retired had they sold their house. Now they’ll be working into their eighties or nineties.

#110 Tony on 06.06.12 at 4:32 am

Re: #82 furst on 06.06.12 at 12:09 am

Thousands spent with nothing to show
The bank just foreclosed, oh no!

#111 Blue Monster Lover of Meats and Vegetables on 06.06.12 at 5:06 am

#224 Surrey Girl on 06.05.12 at 8:23 pm

# 46 Monster Cookie #65 D-dawg and # 95 D Suzuki (Dawg) I drive an electric (not hybrid) car and I love it. When we ran the numbers for the car we break even in 6 years. The new battery cost projected in 7 years would be about double the cost of an engine rebuild and the savings from no maintenance (that’s right no maintenance) should bring us even for the battery replacement. And I get to look my grand kids in the eye and tell them I did everything I could. I also get to look at the surprised look on the face of the dragster in my rear view as I take them off the light every time. I know this is a financial blog but sometimes you have to put your money where your convictions are and financially it does not cost more even when BC Hydro raise their rates in 2013. Do the numbers.
——-
Surry Girl, sounds like you’re running on lead acid. If you’re running a home build then you ain’t got nothing on the next generation! But hats off to you for kickin it for the street rods in Van! Kick them to the curb up to 80 mph!
I’m in the biz and will do all I can to help the kidz. My nefs and nieces are just out of dupers and the world WILL BE A BETTER PLACE!

#112 Deb on 06.06.12 at 5:55 am

#60 Sask Girl

Your plan to continue to rent and be patient is both contrarian and very wise. Buying now at top dollar is not. Six to twelve months from now, you will become more and more satisfied with your prudent strategy.

#113 Cow Man on 06.06.12 at 6:46 am

Amigos:
With Scott Walker’s recall victory in Wisconsin the writing is clearer than ever. Ontario is toast. US workers have low cost housing, and Union strength is lipid. There will be no job creation in Ontario, either private sector or public sector. Not that there has been any recent job growth here; as it is. Game set match!
http://globaleconomicanalysis.blogspot.ca/

#114 timbo on 06.06.12 at 7:30 am

http://www.bloomberg.com/news/2012-06-06/german-industrial-output-declined-more-than-forecast-in-april.html

“German industrial output fell more than economists forecast in April, adding to signs that growth in Europe’s largest economy is slowing as the sovereign debt crisis curbs demand. ”

tis but a flesh wound……….

http://www.forbes.com/sites/abrambrown/2012/06/05/report-fed-is-indeed-considering-more-action-fiscal-stimulus/

“The Federal Reserve is mulling over whether U.S. financial markets need a pick-me-up.”

Just the rumor of the helicopter brings golden tear’s to the market. All is well, carry on……………..

#115 TurnerNation on 06.06.12 at 7:32 am

Will Blog Dog Carney say nyet to rate hikes? Ja ja the Party is good.

Meanwhile, over in the Eurotrashzone:

Polish Central Bank Keeps Benchmark Rate Unchanged at 4.75%

Poland’s central bank, the only one in the European Union to raise borrowing costs this year, left its benchmark interest rate unchanged today after the EU’s largest eastern economy slowed to a two-year low.

#116 T.O. Bubble Boy on 06.06.12 at 7:57 am

Could the C01 condo listings increase be due to all of the pre-construction/assignment listings?

We already know that TREB includes these new-build sales as re-sales… so it would seem likely that the listings are treated the same way.

Maybe this isn’t really a listings spike, but rather a “oh sh*t, why did I buy so many spec condos” spike?

#117 Lilyflor on 06.06.12 at 8:06 am

At #81 bubbles

It all depends what province you are from.

If you are from Quebec, the laws are pretty specific. You need 6 months notice if on a yearly lease, and if you don’t respond back in writing it is taken as you r refusing to leave and if the landlord fails to take you to the regie court he can’t evict.

#118 T.O. Bubble Boy on 06.06.12 at 8:10 am

@#59 Not 1st

Garth, are there any preferreds out there doing better than 5.5%? any 6 or 7% yeilders?

You can use a stock screener (e.g. on globe and mail) to find preferrers by yield. There are a few like Bombardier that are over 6%, but the sustainability of that yield would be more in question. Almost all Canadian preferreds are between 5% and 6%.

#119 Tonino, Nonno Nicola's Grandson on 06.06.12 at 8:12 am

#43 Paolo

“My Dad (shocked) informed me it was on the market for 1.2 million and I thought well it’s priced for the bully bid/bidding war stupidity.”

Anyone not currently confined to a straight jacket would not bid 1.2 million for anything in Downsview. These builders who buy in cheap areas (all relative I realize but the last time I checked, Downsview was not a “hot” area to be in Toronto) and expect to get big buckeroos for their homes are whacked. There are 1.2 million dollar homes on the subway line in vastly better neighbourhoods that are not selling. This builder is completely insane if he thinks he can get that price, in Downsview, even in this topping of the bubble.

#120 Karie on 06.06.12 at 8:29 am

#82 – I had to smile at your poem Furst – that’s talent.

#121 ThiNg on 06.06.12 at 8:43 am

Well, the big Green Bank isn’t giving up easily. This was on their newsletter (fresh in my inbox this morning):

“Condo fees: How much would you pay?
Three-quarters of urban condo buyers in Canada
said condo fees are worth the extra monthly expense to enjoy the benefits of city living.

Here’s how much condo owners said they were willing to pay each month:

• up to $200/month 35%
• up to $400/month 44%
• up to $800/month 17%
• other/don’t know 4% ”

And then, if you click into the articles, there is one about Spring Tips for your home. At the end of article this is in the last paragraph:

“A [Green Bank] Home Equity Line of Credit, for example, is one way you can use some of the equity in your home to finance improvements you want or need. You can make repayments as low as minimum monthly interest-only payments.”

Make sure we squeeze EVERY single last drop out of every greater fool left out there…

#122 Mr. Lahey, Sunnyvale Trailer Park Supervisor on 06.06.12 at 8:43 am

#82 Furst

Well done Furst! This is my second compliment to your poetic skill and the first one offered an invite to read your poems at the SASTPGFBDCParty and yet no response…

#123 Ret on 06.06.12 at 8:48 am

“To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, blah, blah, blah….

Like in Hamilton? How about F’s Oshawa riding?

#124 jerry on 06.06.12 at 8:56 am

PM Harper said on CBC that in regards to the Eurozone, “we are running out of runway”. As a resulting impact on Canada, Harper gave out investment advice to go mid to long…suggesting much nashing of teeth in the short term.

Bonds are swelling again, rent is fine but for how long?

#125 Gotthardbahn on 06.06.12 at 9:00 am

Turner – Mr. Carney can go on all he wants about raising rates in Canada but it ain’t gonna happen. The ECB will be cutting aggressively very soon, the PBoC as well, RBA cut rates this week – and their economy is a carbon copy of Canada – and the Fed will likely do another round of money-printing…er, quantitative easing any time soon. So forget about it, bucko, the True North won’t be going against the trend. Inflation is what, 2 % at the core? Headline inflation is 1.9 % ? And Carney’s gonna raise rates? Think about it. The uptick in condo listings that you helpfully posted will take care of any real estate madness by years’ end. And what’ll be left is a commodity-based economy trying to get used to $85/bbl oil, and not liking it one bit.

Actually the ECB did not cut today. Try to keep up. — Garth

#126 fu_ming_xia on 06.06.12 at 9:05 am

Received my Toronto Life in the mail this week but never looked at the cover until this morning. “Trouble in Condoland”….The perfect read on my flight back to Europe!!!!

#127 CrowdedElevatorfartz on 06.06.12 at 9:05 am

@#54 Not Even the MSM…..

Economic “Smoke and Mirrrors” is still just a peanut under a shell…..

We’re screwed because these people (economists)believe their own lies.

#128 GTA realtors in a Panic on 06.06.12 at 9:10 am

#76 bubu
“unemployment will raise and even if the house will be $250k if there are no jobs ( look at US) nobody is going to buy… and be realistic.. do you thing the government will allow this?”
——————————————————————–

Do you think the US government would allow the housing market to crash in the US? It’s called the laws of economics and when the ponzi comes crashing down you can not stop it. The US government which is known as the MOST POWERFUL government in the world couldn’t stop their housing bubble and you think Canada will be the ONLY country in the world to stop the laws of economics? Look at vancouver and it’s now over 12% crash in under 4 months. With CHMC limit set at 600B and HELOC changes with the new rules to hit the mortgage market soon = crash of 50%. It will be a US style crash and I do believe it was a set up JUST like our American friends.

#129 NoName on 06.06.12 at 9:11 am

#117 TurnerNation on 06.06.12 at 7:32 am

Only reason Poland can increase rate is because they have their own currency, they have no fear of their currency getting stronger…

1.00 EUR = 4.34PLN.

#130 Onemorething on 06.06.12 at 9:11 am

#78 Ron on 06.06.12 at 12:00 am

I’m planning to buy a wicked sprawl in 2020. At that point, hindsight will be 20/20. Until then, renting is bliss. It took 5 years for the U.S. to bottom and we’re 5 years behind. Patience and liquidity will prevail.

That wicked sprawl may not resemble by 2020 what it does today.

Bottom in the US market has 20% to go bro. National avg needs to be 50% before it bottoms. Yes another decade.

This next downturn in the US will finally do to Canada what should have happened a few years ago.

Over the next 3 years, I expect real unemployment in the US which is the U6 at 15% to be closer to 20% and only jobs to be created in manufacturing with wages similar to the 90’s. Factor those stopped looking for work and those partially employed working 15 hours a week and those fully employed working less than 30 hours a week to drive a real unemployment figure past 25%+.

RE cant hold up under these conditions so national drop to 50% from peak (given 30% already reached) is just about correct.

#131 Regan on 06.06.12 at 9:12 am

#111 Tony on 06.06.12 at 4:24 am

It’ll look good when all the bozos in Toronto who were too stupid to sell lose all their equity. I still just shake my head at the sparse listings. Many of these people could have retired had they sold their house. Now they’ll be working into their eighties or nineties.

Well, actually, if MOST people actually up and sold all at once, the price would fall. The ‘wealth’ is speculative, that’s the whole point, and based on market forces. To a large extent, those who sell early are lucky as much as they are smart. Be grateful, not spiteful.

#132 Onemorething on 06.06.12 at 9:13 am

Canada, 30% drop national average, 45% TO, 55% VAN.

#133 CrowdedElevatorfartz on 06.06.12 at 9:13 am

@#70 Tim

Carney may have not raised interest rates but the banks are tightening their lending practices.
Loan and mortgage denials are increasing.
Banks expect rates to incease at some point with the expected customer loan defaults to follow…..

Carney is delaying the inevitable.
One can only hope that the Conservatives are forced to bump up the rates 6 months before the next election.

#134 The Gospel of Garth on 06.06.12 at 9:18 am

Garth 7:1 “And it came to pass that the bearded mystic oracle, lone voice of financial reason in the land, went to the high office of the governor of the Bank of Canada.
7:2 The oracle stormed into the office of the governor who was sitting at his desk reading about the financial carnage he had created in the land.
7:3 The bearded mystic oracle grabbed the oak desk of the governor and in a herculean display of strength overturned it and cried out, “you have turned the fiscally responsible land of my forefathers into a land of heloc infested condo and SFH zombies”.
7:4 The governor was shocked and responded, “who art thou, bearded one?”
7:5 The bearded mystic oracle set his steady gaze on the governor and in a low but powerful voice stated, ” I am the one sent to warn the people of this land of the coming financial armageddon. The lone voice of reason in this heloc infested financial wasteland.”

#135 Mike on 06.06.12 at 9:28 am

I remember seeing Garth Turner as a business reporter on CTV when I was a scrawny preteen, it’s a pleasant surprise to see him now telling it as it is in real estate. I’m now 27 with a modest stock of savings ~100K and a steady income ~80K/yr and really hoping that this thing turns around soon. The sad part is that there are a lot of people like me who are young and have a modest stock of savings who would greatly benefit from falling prices; I mean the way to promote home ownership is to make houses cheaper and more affordable, DUH!

Everyone in the media always says how great it is for real estate to be in a “boom”, but almost nobody thinks of those who would benefit from falling prices (i.e. those looking to buy a place and live in it) but are crowded out. I just hope that I can hopefully buy something by the time I’m 30, but I’m not holding my breath. I hope it falls and falls hard. Till then, it’s parent’s basement for me, lol.

#136 Junius on 06.06.12 at 9:28 am

#90 BPOE,

I read just fine. More importantly I have a brain and know that you are wrong.

Once housing markets turn down they usually continue that trend for years. 2008 was an exception because of the emergency rates and intervention. Now that is all spent and the natural cycle has started downward.

Time for you to get a real job. Vancouver’s market will now fall for the next 5 or more years. It is just a matter of how quickly and how far.

#137 Kenny Banya on 06.06.12 at 9:28 am

“Tony on 06.06.12 at 4:24 am

It’ll look good when all the bozos in Toronto who were too stupid to sell lose all their equity. I still just shake my head at the sparse listings. Many of these people could have retired had they sold their house. Now they’ll be working into their eighties or nineties.”

My inlaws are in this exactly situation, they own three properties in bubble central in toronto (the one they live in + 2 rentals). They 100% know it’s the correct time to sell BUT houses in the neighborhood are still appreciating at absolutely stupid levels.

Wait another month… make another 25k. It’s just too tempting. I’m pretty sure they will miss the top by a lot. How many people can turn down the prospect of just waiting a BIT long and squeezing another year of salary out of the place for zero effort?

#138 live within your means on 06.06.12 at 9:38 am

#95 Nostradamus Le Mad Vlad on 06.06.12 at 1:10 am

Re Costco Strategy

Interesting article. We’ve been members for many years. As half of our food & other essential daily living items are purchased there, we changed to an Executive Membership 2 years ago. We have the space to store bulk items & take advantage of deals. Plus, as my DH is a big cheese eater, Costco’s prices are half what we’d pay elsewhere. Only thing that bugs me is that their offerings from one week to another is inconsistent & because we live in the Halifax Regional Municipality & lack a diversity of ethnic pop here, we don’t have the same offerings as in larger cities. :-( Having grown up in Mtl. I really miss that. But, RE is far cheaper & I think there is more sense of community.

Last weekend, the newer end of our street (crescent) held a street party so they could get to better know we older residents on the street. Everyone brings a salad or dessert, their own protein to BBQ, BYOB. etc. We older residents have always had an annual st. party.

#139 };-) aka DA on 06.06.12 at 9:48 am

DELETED

#140 Canadian Watchdog on 06.06.12 at 9:53 am

Charts: Toronto/GTA Condo Sales & Inventory http://postimage.org/image/6u2e9ptlz/

Roger, we have a problem.

#141 Grantmi on 06.06.12 at 10:04 am

#81 bubbles on 06.06.12 at 12:08 am
I just received an eviction notice (for landlord use). Supposedly, she’s moving back into the apartment I’ve been renting from her for over 6 years. I’m pretty sure as soon as I move out she’ll put the place up for sale and never actually move back in. Do I have any recourse if the place appears on the MLS a week after I’ve been evicted?
Any thoughts? Thanks.

Yes. It depends which province u live in. Here in the BPOE you have to prove without a doubt she’s moving in. Get proof of her selling her current place, or a copy of her rental notice to HER current landlord. (if she’s renting another place).

Check your rental rights with each province rental board. You have rights, and likely it’s in favor of you, over your landlord.

#142 Riveted on 06.06.12 at 10:11 am

#109 Buy? Curious?

The good news is that buyers and sellers in Halifax can’t hide anymore. A cool little company called Viewpoint (www.viewpoint.ca) endows regular people like you and me with real-estate-agent-like powers. Register (free) and you can peel back the MLS curtain and bring up the sales and offer history of almost any property in the HRM.

The one thing I’ve realized since discovering it is that MOST people (even family) lie about how much they paid or got for their house.

#143 Johnny D on 06.06.12 at 10:18 am

Oil is going up again which means the Canadian dollar is climbing too. If we hit par again with the greenback I’m thinking of converting all my Canadian dollars to American. Would this be a good idea? or is the Canadian dollar always gonna be this high or higher compared to the U.S. dollar?

#144 John on 06.06.12 at 10:18 am

Deb wrote:

“Your plan to continue to rent and be patient is both contrarian and very wise. Buying now at top dollar is not. Six to twelve months from now, you will become more and more satisfied with your prudent strategy.”
——–

I’m not catching the “strategy” part. It sounds like getting out of debt, avoiding debt..and what else?

It sounds like walking in the fog.

#145 TnT on 06.06.12 at 10:25 am

#81 Bubbles
I just received an eviction notice (for landlord use). Supposedly, she’s moving back into the apartment I’ve been renting from her for over 6 years. I’m pretty sure as soon as I move out she’ll put the place up for sale and never actually move back in. Do I have any recourse if the place appears on the MLS a week after I’ve been evicted?
Any thoughts? Thanks.
***************************

If you are in Ontario spend some time reading your rights.

http://www.ontariotenants.ca/law/law.phtml#Q9

(Check your local source for your rights as a tenant).

Cliped from site:
There are other grounds for eviction, such as if the landlord personally needs the apartment to live in –

As unscrupulous landlords could falsely use these other situations as an excuse for eviction, contact your legal advisor or legal clinic immediately, and if you are certain they are in violation of the law the Investigation and Enforcement Unit, at 416-585-7214, or outside of the 416 calling area, toll free at 1-888-772-9277.

See Sections 72 through 75 in Part V of the Residential Tenancies Act and it might be an idea to read all of this part of the Act.

These situations have many conditions and so can not be adequately covered in a summary such as this one. GET LEGAL ADVICE.

***************
Good Luck :)

#146 Jamaican_Gal on 06.06.12 at 10:30 am

Love the poem Furst. You have real talent…

#147 -=jwkimba=- on 06.06.12 at 10:35 am

#59

CLC (T) CML healthcare has a nice 7.5%ish yield right now. They have no CEO and are doing a complete re-org right now. BUt their business is text book cash cow so the 75c should be maintanable.

#148 fancy_pants on 06.06.12 at 10:43 am

McGuilty as charged. Can’t remove funding for Catholic schools? Hey, just remove the Catholicism from them…

meet the new Ontario education, where vegetables may be mandatory but respect for religious tolerance and diversity is optional.

Like dogs return to vomit, will voters re-elect him again?

#149 Johnny D on 06.06.12 at 10:43 am

Post #82 by Furst is quite amazing.

#150 VINNY on 06.06.12 at 10:53 am

REF. #111 Tony on 06.06.12 at 4:24 am
It’ll look good when all the bozos in Toronto who were too stupid to sell lose all their equity. I still just shake my head at the sparse listings. Many of these people could have retired had they sold their house. Now they’ll be working into their eighties or nineties.

WELL ! AS PEOPLE GROW OLDER IT TRANSFORMS BACK AS THE CHILD????

#151 Kenny Banya on 06.06.12 at 11:00 am

Oh and since this seems to be ground zero for discussion of preferred shares, can someone help me out? I got interested and downloaded the ScotiaMcLeod “Guide to Preferred Shares.” Sounded pretty good and then a few pages in…

“Post 2013, newly issued Tier 1 preferred shares are required to include a feature that allows for the conversion to common shares from the regulator when OSFI feels the firm is at the point of non-viability… watch for new issuance this year that will most likely be in the rate-reset format which is likely to include the new conversion to common stock feature.”

So they can change preferreds to ordinary stock if the bank is in trouble? Doesn’t sound too good… Am I reading this right?

No Canadian bank will reach the point on non-viability. — Garth

#152 Piccaso on 06.06.12 at 11:01 am

Losing sleep on mattress stocks

TPX dives on guidance

#153 TimV on 06.06.12 at 11:02 am

Interestingly, another story about a buyer giving-up / withdrawing from the market, this time in Toronto and by the Star: http://www.moneyville.ca/article/1206031–toronto-real-estate-s-sudden-surge-in-gta-homes-for-sale?bn=1

I don’t fully understand the dislike towards bidding wars. From my perspective, multiple interested parties help increase the likelihood that the price is not ridiculous (obviously excluding the occasional high-profile case where emotions get away and something stupid happens, but despite being high profile, I do believe that to be the exception, not the rule).

The listing realtors I’ve heard / spoken with have also always been honest and said whether they priced it at market price or whether they intentionally underpriced. The house we bought was a bit unique for the area and my own realtor came up with a wider range for valuation than I really liked, but the fact that there were multiple interested parties at a price not too far from the selling price provides some assurance that the final selling price is not too far over market.

Further, some of the buyers seem to take issue with “offer dates”. This is a ridiculous complaint. If you think a bidding war is unfair: then a house with no “offer date” where you need to simply make your best offer as soon as you see it without having time to do a home inspection, market valuation, or even just “think it over” … well, that is far more unfair than an offer date.

All new listings should have an offer date, even if the seller is pricing above market (because realtors make mistakes and there might be multiple interested parties, in which case an offer date is the most fair thing to have).

Anyhow, that’s just my perspective. I totally believe the market is overpriced, and that there are lots of dirty tricks and borderline lies (or outright lies) that happen. But buyers who complain about offer dates or multiple offers just don’t make sense to me.

If you can’t figure-out what the property is worth to you, then why is it somehow safer to buy the property when nobody else is interested in buying it?

#154 Mosquito-ville on 06.06.12 at 11:02 am

http://www.winnipegfreepress.com/business/house-market-burning-hot-157418655.html

Winnipeg is next !!!!

#155 Herb on 06.06.12 at 11:15 am

#81 Bubbles,

if you’re in Ontario, read Sects. 48 and 49 of the Residential Tenancies Act, and remind your landlord of Sect. 57. That might prevent any nonsense. And if it doesn’t, you have recourse as described in TnT’s #138.

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_06r17_e.htm#BK56

#156 Geee...I missed the train!!! on 06.06.12 at 11:20 am

In meanwhile in Tor-couver:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11920210&PidKey=1094895839

#157 andrew on 06.06.12 at 11:24 am

Making the news in jolly old England
http://www.bbc.co.uk/news/magazine-18155405

#158 zeeman1 on 06.06.12 at 11:34 am

Garth,

Forgive my ignorance but can a non resident buy a property and then sell it without paying tax/capital gains?

If so, how is that even possible?

The rules are published here. — Garth

#159 Bottoms_Up on 06.06.12 at 11:43 am

#81 bubbles on 06.06.12 at 12:08 am
—————————————–
She doesn’t even have to move in prior to selling. She could list on mls right now, and sell the place. The new owner could then choose to keep you as a tenant, or kick you out (if they plan on living there). I would think your only recourse would be if you had a signed lease agreement that she is terminating early? In that case, you could probably negotiate a settlement with her. If you didn’t sign a lease, well you’re likely out of luck.

#160 Bottoms_Up on 06.06.12 at 11:52 am

#72 Karie on 06.05.12 at 11:49 pm
————————————
Just think, it’s like you made 5% pre-MERs….just give your money to Garth, I’m sure he can do better than 2% (and you may even get to talk to him while he’s driving his hummer):

http://www.nbf.ca/en/tomensonturner/

#161 kenken on 06.06.12 at 11:53 am

below are TREB average house prices (tracked per their monthly report). A 30% reduction will not even be the price houses were in Jan-09

Average price TREB
2000 243,255
2001 251,508
2002 275,231
2003 293,067
2004 315,231
2005 335,907
2006 351,941
2007 376,236

Jan 2008 374,449
Feb 2008 382,048
Mar 2008 380,338
Apr 2008 398,687
May 2008 398,148
Jun 2008 395,866
Jul 2008 371,427
Aug 2008 364,886
Sep 2008 368,549
Oct 2008 352,974
Nov 2008 368,582
Dec 2008 361,415 << 30% reduction
Jan 2009 343,632 <>
Feb 2009 361,305
Mar 2009 362,050
Apr 2009 385,641
May 2009 395,609
Jun 2009 403,972
Jul 2009 395,414
Aug 2009 387,921
Sep 2009 406,877
Oct 2009 423,559
Nov 2009 418,460
Dec 2009 411,931 << 20% reduction
Jan 2010 409,058
Feb 2010 431,509
Mar 2010 434,696
Apr 2010 437,600
May 2010 446,593
Jun 2010 435,034
July 2010 420,482
Aug 2010 411,012
Sep 2010 427,329
Oct 2010 443,729
Nov 2010 438,030
Dec 2010 433,946
Jan 2011 425,762
Feb 2011 453,329
Mar 2011 456,221
Apr 2011 476,802
May 2011 485,408
Jun 2011 474,268
Jul 2011 458,919
Aug 2011 450,828
Sep 2011 464,080 << 10% reduction
Oct 2011 475,550
Nov 2011 479,160
Dec 2011 451,436
Jan 2012 463,267
Feb 2012 502,508
Mar 2012 501,141
Apr 2012 516,934
May 2012 516,787 <>

Not the point. A 30% correction would put every buyer since 2009 under water. That would precipitate a long unwinding of both sales and valuations. Look what it did in the US. Your numbers are economically meaningless. — Garth

#162 John G. Young on 06.06.12 at 11:58 am

#92 Bill Gable on 06.06.12 at 1:01 am

Totally agree. Even though it’s legal, alcohol is by far the deadliest substance of abuse — excluding tobacco, but I suspect from his alias that that may also be an issue for Smoking Man.

I also agree that the 12 Step program and fellowship it provides can be lifesaving. Unfortunately, as I’m sure you know, for some that’s just too scary to contemplate, especially early in the process. It seems to me that SM may be using this blog as a support — off topic for sure, and not ideal, but it’s a start. Hearing stories like yours may give him hope and courage to take the next step, which I believe is a big part of what the 12 Step program is all about.

Like every other addict, I couldn’t stop on my own — in fact I think the definition of an addict is someone who can’t stop without support. No shame in that — we’re social animals and need each other to survive.

Nice to hear from someone else in recovery — and I’m sure there are many more here who can relate.

John

PS About seeing a doctor for help: I’m a physician myself, and here in Toronto my addiction doctor and I talk to 2nd year medical students about addiction. Our talk is three hours long — and for those students that’s the total training on addiction that they will ever get, even though addiction is responsible for about a quarter of all hospital admissions.

#163 kenken on 06.06.12 at 12:11 pm

Re#163
Hi Garth, statistically these are the numbers and the % decrease will be calculated as such.

Economically, you are right to say it will be a ‘mess’ with the long unwinding of sales and valuations .. like in the US.

My point was to show that even with a 30% decrease (if ever it goes down that much) from today’s prices (assuming this is the TOP), it will not be as low as it was in Jan-09.

#164 daystar on 06.06.12 at 12:22 pm

6 years after the U.S. bubble bursts, finally finding a bottom?

http://www.bnn.ca/News/2012/5/29/US-home-prices-hit-post-crisis-low.aspx

ARM’s and Alt A’s should still unwind until October but it looks like U.S. housing has found its bottom. In Canada, considering the impacts of recourse loans buffering the effects of an unwinding bubble (think Spain) it should make for a nice bottom in Canada’s housing nationally oh, say… 6 to 7 years from now. Reticence required?

#165 Steve on 06.06.12 at 12:35 pm

Not the point. A 30% correction would put every buyer since 2009 under water. That would precipitate a long unwinding of both sales and valuations. Look what it did in the US. Your numbers are economically meaningless. — Garth

tsk, tsk. Garth, one should NEVER use absolutes because it ALWAYS leads EVERYONE to misunderstand…

I do not see that ALL buyers since 2009 will be underwater, but there is certainly a large group of them: the ones that bought with too little down, the ones that bought with other people’s money, the ones that took the HELOC bait, the ones that will be renewing after their 5 year terms in an environment of increasing rates and decreasing propery values. Those people who have spent their future, only to see that they have over-spent and can never recover, they will be another significant demographic in the mess unfolding before us…

The rest of the comment is certainly on target…a long unwinding awaits, regardless of the specific percentage of the eventual bottom.

You’re right. Those with 30% equity or less would be screwed. — Garth

#166 Devore on 06.06.12 at 12:43 pm

#106 Canuck Abroad

And the moral of the story is always insist on an annual lease at each renewal? Thanks in advance.

Others covered your other questions.

Yes, if you are looking for housing stability, you either buy, or do what businesses do: get a long term lease. As long as you feel comfortable with. At least a 1 year lease, which is standard, and I’d be suspicious if a landlord said no to a renewal. Well before the lease ends, 3 months, negotiate a new one.

Where renting always has a definite advantage over buying, is if you’re looking for short term accommodations, or aren’t sure what your situation will look like in the next year or two, or just want the flexibility to be able to move somewhere else on short notice.

If they want you out while you have a lease, then you have the upper hand, and can negotiate some good concessions for yourself if you’re willing to break the lease. In BC there’s a form for when you have a mutual agreement to end a lease or tenancy (there’s a form for EVERYthing). Although all regulations guiding rental agreements are provincial, so you have to check your local laws.

#167 Toronto_CA on 06.06.12 at 12:46 pm

My CEO gave me some depressing article to read that was spouting doomsday. He’s normally not so glum about the economic future.

Then today in my inbox I get this cheery message from the Chartered Accountants Research Monitor (I’m a CA so I gotta read these things I suppose):

“With the persisting uncertainty of the global economy and the heightened anxieties around the Eurozone, many CEOs are facing unique challenges within business. In KPMG’s 2012 Business Leaders Survey, just over one-half of respondents believe we are entering a second Great Depression.”

So more than 50% of CEOs out there think we’re about to enter a Great Depression? Or have already?

And there are still people who think that it’s wise to buy a $1.5million dollar bungalow in North Toronto????

My god.

There will be no depression. But you might as well profit from those tortured souls who disagree. — Garth

#168 Devore on 06.06.12 at 12:49 pm

#107 Canuck Abroad

Suddenly you will feel like you’ve lost 100k even though of course you haven’t because you never had the 300k. People hate to lose money.

But most people aren’t of this opinion. They feel like this when their property loses value. They feel like this when they believe a cheap HELOC is their right, because they believe house equity IS earned money, that just happens to be trapped in their house instead of a bank account. No, the house equity is just a house, a place to live. It’s not a savings account.

In fact, some banks do have accounts that treat house equity as money in the bank, for all practical purposes. They even have “debit” cards that go against it. This feeling of entitlement has been very carefully cultivated, to the point people feel quite at home using their house credit for everyday operating expenses.

#169 Mr Buyer on 06.06.12 at 1:00 pm

#150 fancy_pants on 06.06.12 at 10:43 am
McGuilty as charged. Can’t remove funding for Catholic schools? Hey, just remove the Catholicism from them…
………………………………………………..
I felt more than a little uncomfortable listening to a Principal of a Catholic school state openly he discriminated on the basis of religion when hiring. If one religion gets the red carpet treatment why can’t all the others? No, freedom of religion is okay but separation of church and state is a good idea in my puny estimation.

#170 Ralph Cramdown on 06.06.12 at 1:02 pm

I don’t fully understand the dislike towards bidding wars.

– One of the big things sellers pay agents for is pricing advice. If the agent is just going to underprice and let the market figure it out, what’s the 2.5% for?
– Some buyers are irked at going to see a place listed at 5 that ends up going for 6. They feel they’ve wasted their time, as do their agents.
– When you actually get into one of these things, the agent takes five offers, then sends them all back for improvement. Who ever heard of a multiple round silent auction?
– Some idiot pays $50k more than the next highest bidder, and this becomes the new comp for the neighbourhood. Prices are set assuming that the highest bidder is a rational arbiter of value, though this clearly isn’t true.

#171 yel on 06.06.12 at 1:13 pm

calgary is heading back to 2007. it might not be a good thing but i sure am gld i made the right call:

http://www.calgaryherald.com/business/real%20estate/Calgary+real+estate+sales+bloom/6713760/story.html

#172 Canadian Watchdog on 06.06.12 at 1:18 pm

#166 daystar

The US market will see a double dip in housing. There is still shadow inventory and hundreds of thousands of delinquencies who haven’t been foreclosed on yet (years of backlog). Not to mention another round of mass job layoffs due to uncertainty on upcoming budget cuts come Jan 2013.

#173 Aussie Roy on 06.06.12 at 1:23 pm

Aussie Headlines

How Norfolk Island has gone bust

The picturesque Norfolk Island, which has been proudly self governing for more than three decades, has run out of money and been declared officially insolvent.

An investigation by The Sun-Herald reveals that the government of the former penal colony-turned-tourist playground has been unable to pay its bills for almost a year.

A collapse in the tourism industry is sending financial shockwaves across the island. Many homes, hotels and businesses are up for sale, islanders who are not eligible for Australian unemployment benefits are struggling to make ends meet and the island airline, Norfolk Air, has been grounded.

Settled just six weeks after Sydney, the island is famous for its history as a penal settlement. Its historical precincts won World Heritage status in 2010.

The island is home to many of the Pitcairn Island descendants of the 1789 mutiny on the HMS Bounty, who were resettled in 1856. The Pitcairn Islanders have long had a strained relationship with Australia, labelling its interference with island business as ”illegal and immoral”. They fought hard to keep their independence after winning autonomy in 1979.

But the global financial crisis forced the island’s economy into depression, and its government agreed that the federal government should take back some control in exchange for financial support.

http://www.theage.com.au/travel/travel-news/how-norfolk-island-has-gone-bust-20120324-1vqve.html

#174 young & foolish on 06.06.12 at 1:25 pm

There will be no depression. But you might as well profit from those tortured souls who disagree. — Garth

I want to believe this. Today the market is up on speculation that more stimulus is coming. That’s what it seems to take to get a rally going. Without more printing, everybody loses confidence. So much for the “free market”

The market is up primarily because stocks are cheap. The S&P is at 12.9 times earnings, as opposed to an historic average of 16. That makes them 19% undervalued and, by the widest margin in 60 years, offering a greater yield than bonds. — Garth

#175 jess on 06.06.12 at 1:26 pm

cow man

In U.S., 46% Hold Creationist View of Human Origins
Highly religious Americans most likely to believe in creationism
by Frank Newport
http://www.gallup.com/poll/155003/Hold-Creationist-View-Human-Origins.aspx

#176 Raj on 06.06.12 at 1:33 pm

#155TimV,

Did you see this?
“I had one woman email who says she cries every time she goes to an open house. She’s pregnant and just wants a place to live and she knows she’s not going to get one,” because she gets priced out in bidding wars.”

Crying for house? Is’nt this peak of insanity?

#177 Devore on 06.06.12 at 1:38 pm

#155 TimV

I don’t fully understand the dislike towards bidding wars.

It’s not so much dislike of bidding wars themselves, as how they are conducted, and the attitudes of the agents and sellers.

#178 GTA realtors in a Panic on 06.06.12 at 1:38 pm

Look at the realtors all posting in an all out PANIC! Look at them trying to down play the current housing crash in Canada and many of them even believe a 30% crash wouldn’t mean much. Get ready for a US style crash that even the realtors themselves believe will happen. Stay away from RE people it is crashing hard in Canada. It has started in Vancouver with now over 13% or $150K drop in prices in under four months. That crash is now hitting the GTA. Prices will crash back down to HISTORICAL NORMAL 3 times earns JUST LIKE THE US.

#179 fancy_pants on 06.06.12 at 1:46 pm

#171 Mr Buyer on 06.06.12 at 1:00 pm
If one religion gets the red carpet treatment why can’t all the others?

I agree.

RC funding goes back to the Constitution Act of 1867. Honestly, I’m indifferent to what they enforce to publicly funded schools.

What makes me nervous is how long before they start mandating what private schools can and can’t do.

#180 jess on 06.06.12 at 1:48 pm

Harry Frankfurt’s concept

…”In his essay On Bullshit (originally written in 1986, and published as a monograph in 2005), philosopher Harry Frankfurt of Princeton University characterizes bullshit as a form of falsehood distinct from lying. The liar, Frankfurt holds, knows and cares about the truth, but deliberately sets out to mislead instead of telling the truth. The “bullshitter”, on the other hand, does not care about the truth and is only seeking to impress:[8][9]

It is impossible for someone to lie unless he thinks he knows the truth. Producing bullshit requires no such conviction. A person who lies is thereby responding to the truth, and he is to that extent respectful of it. When an honest man speaks, he says only what he believes to be true; and for the liar, it is correspondingly indispensable that he considers his statements to be false. For the bullshitter, however, all these bets are off: he is neither on the side of the true nor on the side of the false. His eye is not on the facts at all, as the eyes of the honest man and of the liar are, except insofar as they may be pertinent to his interest in getting away with what he says. He does not care whether the things he says describe reality correctly. He just picks them out, or makes them up, to suit his purpose…”

http://en.wikipedia.org/wiki/Bullshit

#181 rosie on 06.06.12 at 1:49 pm

Beware teen house buyers.
Three of my students, in high school , informed me that they are going to buy houses in town as investment/ rental properties. Two are 17 and one is 16. They are buying with siblings who are 19 and 20. They are pre- approved for $200k.

#182 SE Asian Expat on 06.06.12 at 1:49 pm

@#82 First

You are now definitely leaving your mark on this blog.
Nice one!

#183 Johnny D on 06.06.12 at 1:51 pm

Things are getting way too complicated now… too many variables and possible outcomes for the economy. U.S., China, Europe, India, all on thin ice and Canada in the middle with our own over-inflated egos and housing/construction market. Should I buy gold?, equities (which market sector?), convert my CAD to USD? etc etc… or just move to the bush in Northern Sask and disappear until all the dust settles and people know what to value and what things are worth again.

#184 45north on 06.06.12 at 2:01 pm

Mr. Buyer: No, freedom of religion is okay but separation of church and state is a good idea in my puny estimation.

Mr. Buyer, your heart and head are in Canada. What are you doing in Japan?

#185 Toronto_CA on 06.06.12 at 2:25 pm

“There will be no depression. But you might as well profit from those tortured souls who disagree. — Garth”

I don’t see a depression coming either, Garth. But I am now more sure than unsure that we’re about to enter another global recession. hopefully milder than the one in 2008. Maybe history will just link them together.

Such an event would knock overblown Canadian RE onto it’s ass more than any rate increase or OSFI rule changes, no?

#186 Jonny on 06.06.12 at 2:29 pm

I’ll say it again on how it is different here than in US – It is just LATER…, later with housing bubble, later with drugs, later with new cars, cell phones…
Still hate the situation in Ontario that I cannot buy beer in places where I can buy cigaretes…
I am not a smoker BTW….

#187 live within your means on 06.06.12 at 2:36 pm

#144 Riveted on 06.06.12 at 10:11 am
#109 Buy? Curious?

The good news is that buyers and sellers in Halifax can’t hide anymore. A cool little company called Viewpoint (www.viewpoint.ca) endows regular people like you and me with real-estate-agent-like powers. Register (free) and you can peel back the MLS curtain and bring up the sales and offer history of almost any property in the HRM.

The one thing I’ve realized since discovering it is that MOST people (even family) lie about how much they paid or got for their house
…………………………..

Thanks Riveted for the site – I was just curious – not in the market as we bought in ’91 & don’t plan on selling anytime soon. Found a house on that site that had been recently sold – I drive by that house 3X/wk. & never saw a sold sign. I know it’s been on the mkt off and on for the last few yrs. Not sure how much I trust the site. Will check out others within a few hundred meters that I know have had SOLD signs on them within the last 2/3 wks.

#188 Mike Rotch on 06.06.12 at 2:37 pm

@59

Not a preferred share, but at last look, AGF was paying out $0.27 per share quarterly. Price is hovering around $12 right now, so this would be a yield of over 8%.

Now, the trend is not in my favourite direction, and I think there was some thought about not wanting to catch a falling knife……..I guess you have to ask yourself why the market’s gone sour on this one before you place a buy order

#189 Spiltbongwater on 06.06.12 at 2:44 pm

Garth, can you use your connections with publishers to maybe help Furst with putting out a book of poetry? His poems are quite good, and I don’t even like poetry. Even when the correction hits and you have no more to write about, I will still come to your blog to read Fursts poems.

#190 new-era on 06.06.12 at 3:03 pm

#161 Bottoms_Up

=============
In a situation where the house is sold and the new owners will take over. The still have to follow the rules of eviction and start the procedures by handing the tenants the proper notice and give them several months to find a new place.

On the flip side the tenant could just stop paying rent at this stage and lose the down deposit. Which will be 1/4 of the two months grace period.

If I was the tenant I would choose to leave the place in a mess including any garbage furniture that they don’t want to clean out to the dump. (This expense will go back to the seller)

I know, I’ve been on both sides of the fence (renter and owner)

#191 disciple on 06.06.12 at 3:04 pm

#181 Mike Rotch… From their website, “AGF Trust has $3.2 billion in loan assets as at August 31st, 2010. Investment and RSP loans represented $2.0 billion while real estate secured loans made up the remaining $1.2 billion.” If you click on Mortgage Products, you’ll read “Today our mortgage program provides Canadians with a common sense and flexible approach to approving NEAR-PRIME mortgage applications across a broad range of products tailored to meet the needs of mortgage brokers and their clients.”

I have a rule where I stay away from anything to do with RE or mortgages when deciding to invest my money… because the banksters lurk just around the corner…

#192 Devore on 06.06.12 at 3:07 pm

The local Vancouver media again grasping at straws. Invites realtors and realtor-economists alike to comment on the sales slowdown:

Somerville said he can’t pinpoint a specific reason for the sales slowdown, but that factors could include a lack of faith in the economy, a slowdown in offshore investment or buyers refusing to pay high prices.

Why, I never…! Sales slow down because buyers think prices are too high? What other revelations await us in the months to come? Perhaps we’ll discover banks aren’t lending because borrowers are terrible credit risks and their collateral isn’t worth crap?

http://www.vancouversun.com/business/Real+estate+numbers+signal+slowdown+analyst/6731296/story.html

#193 disciple on 06.06.12 at 3:11 pm

#185 Johnny D… On courage…Why run away from problems? Meet them head on… and win. Here is where you start.

http://www.youtube.com/watch?v=gK3DB9PQ1TA&feature=endscreen&NR=1

The objective of your real rulers is to keep you in fear. A boogey-man here and a boogey-man there. Gold is not money, brother. Free your mind.

#194 Devore on 06.06.12 at 3:16 pm

What other revelations await us in the months to come? Perhaps we’ll discover banks aren’t lending because borrowers are terrible credit risks and their collateral isn’t worth crap?

Of course, this is a rhetorical question. We merely need to rewind the clock on Google news and read the US headlines to see what’s coming next. The media “experts” have already been jockeying to be in position to say “I told you so” when the time comes, from Sherry Cooper to our own Tsur Somerville.

#195 Nostradamus Le Mad Vlad on 06.06.12 at 3:43 pm


#90 $$$BPOE#1 — “This could get bad folks….very bad!” — Damn BPOE, you’re good, ‘tho not as good as Furst. Keep working on it — you’re almost there!

#116 timbo — “German industrial output fell more than economists forecast . . .”
— and —
” ’tis but a flesh wound………. All is well, carry on……………..”
— plus —
#117 TurnerNation — “Meanwhile, over in the Eurotrashzone:”

Good nom de plume, as it’s a clear description of where the west is headed.

#126 jerry — “PM Harper said on CBC that in regards to the Eurozone, “we are running out of runway”.”
— kinda goes with —
#130 GTA realtors in a Panic — “Do you think the US government would allow the housing market to crash in the US?”
— plus —
#166 daystar — “ARM’s and Alt A’s should still unwind until October but it looks like U.S. housing has found its bottom.”
— and —
#174 Canadian Watchdog — “There is still shadow inventory and hundreds of thousands of delinquencies who haven’t been foreclosed on yet (years of backlog).”

Gentleoffsprings, good morrow. I was speaking with a gentleman (savvy businessman) who bought a foreclosed townhome in the Riverdale area of California for US$75K.

Straight cash and upfront. The home was originally worth US350K. Because there is no recourse in Cal., the previous owners simply walked away around ’07-’08, and the house sat empty for nearly three years, with the bank having to pay property taxes, pay for all repairs and maintenance, etc.

He said that the US govt. had ordered the shadow inventory not be spoken of or touched until the first lot had been cleared, which it clearly hasn’t, that housing is a right mess and a lot of areas look like warzones. Chances are we’re not even halfway through this debacle.
*
oGmdamitd, it’s bloody frozen here. GW my ass! About 10C for the high today and tomorrow.

#196 Fisc on 06.06.12 at 3:58 pm

Always the same pathetic song in Canada…:

http://www.theglobeandmail.com/report-on-business/regulator-eases-proposed-new-mortgage-regulations/article4236287/comments/

Any comments about this article Garth??

#197 MarcFromOttawa on 06.06.12 at 4:00 pm

Not sure if this has ever been posted here but there’s lots of interesting charts.

http://www.bankofcanada.ca/wp-content/uploads/2011/06/sp150611.pdf

#198 Toronto_CA on 06.06.12 at 4:00 pm

http://www.theglobeandmail.com/report-on-business/regulator-eases-proposed-new-mortgage-regulations/article4236287/

WTH? I’m going to talk to a friend at OSFI over drinks soon, will beat him with my wine glass until he tells me why they relented on the HELOC amortization. I don’t like anything that makes mortgage brokers happy, they are as bad as realtors.

What’s your thoughts on this Garth? It seems like the crash will come anyway, but if OSFI doesn’t reign in the mortgage lenders and interest rates are flat for the time being this could delay the bubble pop that much longer.

#199 bigrider on 06.06.12 at 4:10 pm

Hey ,since many people here believe that Toronto is the next New York and since New York is the ‘ Big Apple’ maybe we should call ourselves the ‘Big Fromage”

After all, cheese mixes with fruit quite well.

#200 Can it be? on 06.06.12 at 4:10 pm

Thoughts? A prominent oakville agent tells me that even with the large numbers of listings in south oakville.. I believe 500+ over 2 million dollars…. Everything eventually sells and there are no distress sales? I’m a little shocked. I was told people can afford to sit on their properties. I’m just questioning are there really this many buyers? It seems like there are more and more high end homes being built. There is no shortage of properties to build on. Is it true?

#201 ozy - hold that thought on 06.06.12 at 4:19 pm

hold that thought and don’t buy or look to buy, or even think to buy without 30-70% downpayment
i will not tell you why, should be obvious.
if you are relativelly poor on downpayment, stay that way, do not swalow more than you can chew.
But if you have 30-70% DP, certain type of housing is still worth buying if you get Value (I am not going to explain you what will help you buy a house that will drop much less in next 3 years turmoil versus the other 95%). Obviously no kandos. Sell the scremers for a profit if you can. Buy a real farm baby. and Ride.

Is this courage: the young fella leaving the hot emotional babe with a lot of exposed sun-tanned skin a alone? or the babe: leaving the young fella go, not knowing the night he comes back with the gun loaded?

It is a homecoming. — Garth

#202 Ralph Cramdown on 06.06.12 at 4:29 pm

AGF just sold AGF Trust to National Bank.

Anyone who tells you that, of 500 $2MM+ homes, none of them are distress sales is just plain lyin’. Take any 500 homes anywhere, and a few of them will be distress sales.

#203 Lorne on 06.06.12 at 4:32 pm

#194 Devore

“The local Vancouver media again grasping at straws. Invites realtors and realtor-economists alike to comment on the sales slowdown:

Somerville said he can’t pinpoint a specific reason for the sales slowdown, but that factors could include a lack of faith in the economy, a slowdown in offshore investment or buyers refusing to pay high prices.

Why, I never…! Sales slow down because buyers think prices are too high? What other revelations await us in the months to come? Perhaps we’ll discover banks aren’t lending because borrowers are terrible credit risks and their collateral isn’t worth crap?

http://www.vancouversun.com/business/Real+estate+numbers+signal+slowdown+analyst/6731296/story.html
…………
But, of course, the “benchmark” price is still up…which is really the most meaningful statistic!!!

#204 Frank le skank on 06.06.12 at 4:33 pm

Who the F$%K knows what’s going on in GTA at this point? All the numbers that are used to predict when this crash is happening are inaccurate or fudged. It will take an obvious decline in buyers and an abnormal amount of listings for a period of time to determine when the sh1t will hit the fan. At ground level, I don’t see this happening yet. I don’t see anything abnormal on MLS, as unreliable as it is, that would convince me that GTA housing is starting to decline (correct me if I’m wrong). There’s no doubt that the banks and government know, since they have more accurate data. A lot of corporations are stock pilling money, laying off, retiring employee and reducing wages….. why do you think that is? They know what’s coming and will be prepared. As far as when this will happen in GTA, who knows, but I don’t see any cracks yet.

#205 TnT on 06.06.12 at 4:47 pm

There once was a poster named Furst
His posts were always the wurst
He didn’t even know it
That he is a Poet
Now his words will carry us through the Burst!

This is not a poetry blog. — Garth

#206 John saccy on 06.06.12 at 4:52 pm

Come on, Garth. You know it as well as we know.

The market is up primarily because stocks are cheap. The S&P is at 12.9 times earnings, as opposed to an historic average of 16. That makes them 19% undervalued and, by the widest margin in 60 years, offering a greater yield than bonds. — Garth

This has been known to “investors” for the past week or more. Why the rally today, after Draghi says more stimulus may be coming and the hawks at Fed indicating QE coming shortly. Coincidence?

No major player invests on fundamentals these days. The only money to be made is when Bernanke, ECB and IMF indicate hopium in form of stimulus.

Stocks are cheap. Did you buy some? — Garth

#207 John saccy on 06.06.12 at 4:57 pm

Garth, other day you said that no major news outlet covers when markets go up. Front news on CNN, MSNBC…etc.

http://money.cnn.com/2012/06/06/investing/stocks-markets/index.htm?hpt=hp_t1

Market rally will last a couple of days at most.

I don’t see it on the front page of the Globe, Star, Sun, Herald, Province, CBC, CTV or Global. But if the Dow fell almost 300 points it would be a nouvo-depression. — Garth

#208 triplenet on 06.06.12 at 5:02 pm

#200 Toronto_CA

WTH? I’m going to talk to a friend at OSFI over drinks soon, will beat him with my wine glass until he tells me why they relented on the HELOC amortization. I don’t like anything that makes mortgage brokers happy, they are as bad as realtors.

You forgot the bad lawyers, bankers, builders, appraisers, urban planners, financial advisers and accountants etc., etc.
Funny how so many CCRA appeal/litigation issues involve an accountant.

#209 johnny d on 06.06.12 at 5:04 pm

@#195 disciple on 06.06.12 at 3:11 pm

#185 Johnny D… On courage…Why run away from problems? Meet them head on… and win. Here is where you start.

http://www.youtube.com/watch?v=gK3DB9PQ1TA&feature=endscreen&NR=1

The objective of your real rulers is to keep you in fear. A boogey-man here and a boogey-man there. Gold is not money, brother. Free your mind.
=====================================

Skimmed through the vid… all i can say is… ummm… tell me how the Fonz’s ears are messing with the economy.

#210 triplenet on 06.06.12 at 5:12 pm

#172 Ralph Cramdown

When you actually get into one of these things, the agent takes five offers, then sends them all back for improvement. Who ever heard of a multiple round silent auction?
________________

They take place all the time. Get informed.

#211 harden on 06.06.12 at 5:14 pm

Turns out the OSFI’s proposed changes are akin to the BOC’s warnings re. higher interest rates (yep, any year now). No wonder the REBGV can characterize this house of cards in Vancouver as “balanced.” To the moon baby!!!

#212 Saskatoon Housing Bubble on 06.06.12 at 5:30 pm

While the teeth of the OSFI are not as sharp as some thought, there is still a huge reason why OSFI was not going to let the heloc proposal fail; it’s because of the sure sign we are in a consumer credit bubble. Even though the average house price in Canada has increased from around $300,000 in the second quarter of 2007 to over $360,000 at the end of 2011,

http://2.bp.blogspot.com/-7tZ_MCjy8Os/T6dAg3TcqoI/AAAAAAAADco/FHNv6QKhwF4/s1600/Average+Canadian+House+Price.jpg

Home equity has decreased from 71% to 67% in that same time period.
http://4.bp.blogspot.com/-SsG0mdLXh6Q/T6c–WXWRZI/AAAAAAAADcg/GasvgdmwR1s/s1600/Canadian+Household+Equity+as+a+Percentage+of+Real+Estate+Q4+2011.jpg

Meaning that we have spent beyond our means. A sure sign of a credit induced bubble.

Credit will be tightening, but not as much as the first proposal by OSFI as the mortgage industry did a bang on job of protecting their own bottom line. Still credit is tightening and the biggest impact, if gone through, will be heloc’s loan to value shrinking from 80% to 65%. This will lead to less consumer spending as people will not be able to borrow as much from their homes. Instead of being able to borrow up to $288,000 from a $360,000 house, people will only be able to borrow up to $234,000 on that same house.

And if I were to guess what part of the economy what take the brunt of this clampdown; home reno’s. The long term percentage that home reno’s have of GDP is at 2%, right now it is at about 2.8%

http://3.bp.blogspot.com/-oSdNGLt0T2c/T8-Xg6JxagI/AAAAAAAADpA/WIoBo4nB0WU/s1600/Canadian+Home+Renovations+As+a+Percent+of+GDP.jpg

#213 Tonino, Nonno Nicola's Grandson on 06.06.12 at 5:33 pm

#201 Big Rider

“Hey ,since many people here believe that Toronto is the next New York and since New York is the ‘ Big Apple’ maybe we should call ourselves the ‘Big Fromage”

Now that is funny Big Rider. The people who think Toronto is the next New York have probably never been to Manhattan. Toronto already is the other boroughs of New York and even better in many respects but will never, ever, ever be Manhattan. Nonno sends his greetings and wishes you well. He is on a cruise.

#214 Market Bull on 06.06.12 at 5:34 pm

OSFI BACKS OFF: SOBER SECOND THOUGHT?
_____________________________________________

OSFI has backed off a rule that would have forced banks to put borrowers through a thorough requalification process when their mortgage comes up for renewal.

Another change from the original OSFI proposals is that banks will not have to amortize home equity lines of credit. As a result, HELOCs can continue to revolve, as opposed to forcing consumers to pay them back within a shorter time frame.

I’d say the discussion has already had an impact. And now on to 65% HELOCs. — Garth

#215 TimV on 06.06.12 at 5:48 pm

#178 Raj: I’m not going to criticize a pregnant woman who cries at open houses. Most likely she grew-up in some specific environment and cannot right now conceptualize living any other way.

#179 Devore: I do agree that a market functions most effectively when it has reasonably clear + consistent rules, and where the market participants adhere to these rules in an ethical fashion.

#172 Ralph Cramdown: The 2.5% includes staging and other advice. Is 2.5% too much for one week’s worth of work? Probably, but I think that is a completely separate discussion. I don’t believe that some idiot paying $50k automatically sets the new comp for the neighbourhood. Your realtor may tell you that (see item #1 under ethical behaviour), but I think it takes a couple idiots to really do it. And, if a couple idiots do it …. well, maybe that really is the proper pricing for the neighbourhood. It’s unfortunate, but if multiple people are willing to pay a $50k premium for that specific neighbourhood, then … well, that’s because they saw something in the neighbourhood that made it that valuable to them.

I’m not saying the situation is perfect. Just that some of the criticism is applied too bluntly and not sufficiently pointed.

#216 Ret on 06.06.12 at 5:59 pm

Requiring borrowers to actually pay down the principal on their HELOC’s would be sooooo un-Canadian. We are loosing it as a country.

First H F & C caved and now the OSFI. When will Canadians get the government that they pay for?

#217 Market Bull on 06.06.12 at 6:08 pm

I’d say the discussion has already had an impact. And now on to 65% HELOCs. — Garth
_____________________________________________

Discussions have limited impact – usually about as long as the discussion lasts – then forgotten for good.

As for the 65% limit on HELOCS, you’ll have to explain what material affect such a limitation will have on the housing market, as opposed to discretionary consumer spending.

You figure it out. — Garth

#218 Snowboid on 06.06.12 at 6:10 pm

#192 new-era on 06.06.12 at 3:03 pm…

What ridiculous advice!

Your first two paragraphs don’t apply in BC, and the third would only reflect badly on you for future rentals.

#219 Canadian Watchdog on 06.06.12 at 6:12 pm

Australia’s mortgage market is uncompetitive, lacks variety and should be more like Canada’s http://www.theaustralian.com.au/business/financial-services/peak-mortgage-association-pleas-to-boost-non-bank-lenders/story-fn91wd6x-1226386779983

#220 Fires are starting again in the GTA on 06.06.12 at 6:15 pm

This time in cottage country an almost two million dollar home went up in flames. Looks like people are trying to burn their liabilities away. Look for more “fires” to pop up in the news. We all know the reason why these “fires” will increase in this housing crash.

#221 bill on 06.06.12 at 6:30 pm

vogon poetry anyone?

http://www.youtube.com/watch?v=IxPeIiU2kx4

#222 disciple on 06.06.12 at 6:31 pm

#211 johnny d…”Skimmed through the vid… all i can say is… ummm… tell me how the Fonz’s ears are messing with the economy.”

I’d say this kid waking up from anaesthetics is more awake than you…
http://www.liveleak.com/view?i=610_1338059978&p=1

#223 TurnerNation on 06.06.12 at 6:53 pm

Toronto just voted for banning plastic bags?

The ultimate in State control: carry around your State-approved carrying device, or face fines and jail. Feel like picking up something on the way home? Forgot your approved carrying media? Too bad. Or maybe revert to paper bags, like in the 1920s.

I though our mayor Ford was supposed to be a hardliner rightist, not a limp wristed pushover.
Commerce first.

Nevermind that all supermarket veggies, meat fruits, cereals, and so on are packed into plastic bags….

#224 Can it be? on 06.06.12 at 7:03 pm

This real estate market has obviously been incredibly stressful for many people. Wish I had a crystal ball to predict what comes next.

#225 bigrider on 06.06.12 at 7:06 pm

#209 Garth to John Saccy regarding markets rise and fall – ” I don’t see it on the front page of the Globe , Star…but if it were down 300 pints nuovo-depression”.

Listen people, financial markets go up, feeling out there is that it’s a good time to sell.. “got some of my losses back great” , market goes down, feeling out there is ” God, better sell before I lose more”.

Bottom line is selling begets more selling and the result has been a net reduction in equity exposure across the board and around the globe, both institutionally and among retail investors.

Now flip to RE in T.O. We are told by the pumpers “better buy now or you will never be able too” feeling is “better buy now or will never be able to” . Hey prices have softened a bit, seasonal reasons or whatever ‘Better buy now for or no chance later and people do so”

What should be obvious is with the 70% or so ownership levels among RE Investors, not many more left to buy, considering many owners have multiple properties to supply the remaining 30% who still rent.

Now look at equities. With so much cash globally sitting in cash, or cash like investments, what will it take for just a smidjen of it to go back into stocks? What will it do to depressed prices ?

No question where the better bet is 10 years out from now.

#226 Westernman on 06.06.12 at 7:10 pm

Slim Jim @ # 7,
Regarding ” Skatch” as you so rustically put it… no one has heard anything because it dosn’t matter and no one cares…

#227 bigrider on 06.06.12 at 7:11 pm

#215 Tonino Nonnos Grandson to Bigrider.

Tell Nonno to enjoy his cruise.

Make sure he knows it is much different than his trip here in the fifties when they landed in Halifax.(like my nonnos both)

They came with nothing and yes, they are correct, bella fortuna for them they came when they did because la terra and la casa made them very rich.

No more for the new immigrants though. Houses … they just make them debtors.

#228 real estate bear on 06.06.12 at 7:16 pm

Hi Garth . When you discuss that stocks are cheap compared to historical levels I think you have to remove the credit induced baby boomer binge that began in the 1980’s. That has skewed the long term average. What are the multiple ratois before 1980?

Sure, strip out 30 years from a long-term trend. That makes statistical sense. This blog is scaring me. — Garth

#229 Nostradamus Le Mad Vlad on 06.06.12 at 7:19 pm


13:24 clip Straightforward advice; The Euro = Poverty, and the US$ ain’t far behind; SS Euro Abandon hope all ye who enter here, and Dark Financial Clouds Please sir, can I have some more? Unglued Not one, but most economies; Advantages China’s trade policy; America’s Decline The new paradigm; Detroit Packard Plant Pix; Germany Running outta money?
*
US to Russia Why Russia and China are preparing for WW3. They realize that Syria is a backdoor to Iran; Climate Change Bought to you by the UN – Agenda 21 – One World Govt.; okyo Fish Kill Hmmm. Wonder what caused that? Plus Pix; FB boring? Garth’s blog is way raunchier; 5:50 clip TPTB have created a never-ending gold rush for themselves — perpetual wars; Transformation Highways of America being turned into massive prison grid; Iraq Seems there was a reason for it; Gadaafi Stronger than ever after death? 8:39 clip Total surveillance; Mitt Romney and Bill Gates were at BdB 2012; Leaked BdB Document Nationalism is dangerous, socialism way more so. Vive la revolution! Stuxnet “No mention of the thousands of factories and plants using Siemens cont5rollers damaged by STUXNET, and certainly no mention of Fukushima.” wrh.com; 8:57 clip Florida and Texas have purged the Democrat list, working toward Jeb Bush replacing Romney and Obomba.

#230 Westernman on 06.06.12 at 7:22 pm

John G. Young @ # 58,

DELETED

#231 Fabrega on 06.06.12 at 7:24 pm

“To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.”

C’mon Garth…..that is economic bull crap at its best.

#232 Basement dweller on 06.06.12 at 7:25 pm

This house MLS#: W2340627  sold in oct or november of last year for 605 ( what other comparable homes sold for in the past ) and sold this month for 670. I know the seller didn’t make a profit however I’m blown away that the same house increased 11% in about 6 months.

Just crazy

#233 Fabrega on 06.06.12 at 7:33 pm

#97 truth hammer

It does not matter who is in government in BC: Liberals or NDP. BC is f&$^#* anyways.
What to expect from a province that is introducing a Masters degree in pot growing? Seriously????

#234 Canadian Watchdog on 06.06.12 at 7:42 pm

#219 Market Bull

Here’s your aussie rate cut.

Banks attack ‘reckless’ pressure to cut their margins.
http://www.theaustralian.com.au/business/interest-rates/banks-attack-reckless-pressure-to-cut-their-margins/story-fn91wad8-1226385830682

But most importantly..

“People have also made the choice – a pretty sensible choice you would think – to not return to the levels of dissaving, that is spending … spending more than your income, that we saw a number of years ago.”

And when the general Canadian public figures out how the debt they’ve incurred is nothing but a road to serfdom—transfer of wealth—they will retreat and find other ways to save the fruits of their labour. At that point, no government policy nor any rate cut can encourage or force more spending on to the masses.

#235 jess on 06.06.12 at 7:53 pm

unbelieveable!

Is Global Finance a Ponzi Scheme? Ask a Russian Expert
By Leonid Bershidsky Jun 6, 2012 9:43 AM ET
http://www.bloomberg.com/news/2012-06-06/is-global-finance-a-ponzi-scheme-ask-a-russian-expert.html

#236 Smoking Man on 06.06.12 at 8:15 pm

#225 TurnerNation on 06.06.12 at 6:53 pm

The idiots at city hall are stupid. Banning plastic bags how are they going to pick their dogs dung.

We should ban bicycle’s instead, got tagged by a guy who thought he was in the tour de France. car cut him off and slammed into me. Had to go to hospital. I encourage everyone when walking by a bike lot, side cutters in hand and snip the valve stems.

#237 Onemorething on 06.06.12 at 8:22 pm

NOS LMV post

He said that the US govt. had ordered the shadow inventory not be spoken of or touched until the first lot had been cleared, which it clearly hasn’t, that housing is a right mess and a lot of areas look like warzones. Chances are we’re not even halfway through this debacle.

Exactly why 20% more to go is coming. Warzones will have to be clear cut for safety and to reduce shadow inventory.

#238 furst on 06.06.12 at 8:30 pm

#124 Mr. Lahey, Sunnyvale Trailer Park Supervisor

Mr. Lahey, I never forget my earliest supporters. You were there cheering me on when I was nothing more than an anonymous poster who could only muster ‘furst’. I accept your invitation to open the SASTPGFBDCParty festivities with a hearty Furrssst followed by selected works from my 2012 poetry collection.

#239 Devore on 06.06.12 at 8:34 pm

Sure, strip out 30 years from a long-term trend. That makes statistical sense. This blog is scaring me. — Garth

Trends aren’t based on statistics, they’re based on fundamentals. If the last 30 years was characterized by falling interest rates and increasing borrowing fueling consumption and investment, what will the next 30 look like?

That said, I think the economy will be fine, even if it won’t be a spectacular performer, and I did rebalance a portion of my portfolio on Monday: -bonds -cash +equities.

The last 30 years contained some of the highest interest rates in history, the greatest one-day market crash, stagflation and runaway inflation. My we have short memories. — Garth

#240 John G. Young on 06.06.12 at 8:53 pm

To When Will It End?,

As you may have noticed, I took your advice from last week and have been avoiding the troll who calls himself Westernman.

Nevertheless, as I predicted, he continues to post hateful comments, in response to posts of mine which in no way concern him (eg. #232).

Any other suggestions? I’m open to anything that’s legal…

Cheers,

John

#241 Cyclist on 06.06.12 at 8:54 pm

238 Smokin man

Outside. Now.

#242 John G. Young on 06.06.12 at 9:00 pm

#238 Smoking Man on 06.06.12 at 8:15 pm

Sorry to hear about your troubles, and hope you’re okay (on all fronts).

When I moved downtown I got rid of my car, and walk or take transit everywhere. As a pedestrian, I find the biggest threat to my safety is bicyclists — they think they own the road (and the sidewalk) and that the rules of the road don’t apply to them. After all, they’re special…

Cheers,

John

#243 Marshy on 06.06.12 at 9:01 pm

#228 Westernman

“it doesn’t matter and no one cares” … I think the same could be said for everything you have ever posted on this blog.

#244 John G. Young on 06.06.12 at 9:03 pm

243 Cyclist

Bedtime. Now.

#245 Fat Bastard on 06.06.12 at 9:06 pm

My friend listed his Regina bung on Monday and already has had 9 people checking out the place. Bought it for 160K in 08, he’s asking 245K. He was very surprised and clearly was not expecting such a rush. The guy couldn’t stop smiling. As the market starts slowing down in YVR and YYZ, here in YQR things are just getting hotter by the minute.

And the city keeps sprawling on the southwest and northwest, with more and more cookie cutter condos and houses. Young couples “buying” condos for 400K-500K, realtor advertisement absolutely everywhere, mortgage brokers everywhere, and an enormous amount of excuses on why it makes total sense to pay half a mill for a cardboard box in the Vag. People don’t drink kool-aid here, they snort it.

In Regina…
Half a million dollars for a condo…
……
……..
In Regina…

You can’t rationalize that, man.
Gimme an effing’ break!

#246 Canadian Watchdog on 06.06.12 at 9:10 pm

“The last 30 years contained some of the highest interest rates in history, the greatest one-day market crash, stagflation and runaway inflation. My we have short memories. — Garth”

Yes but our government has never been this far in debt at such low rates. http://postimage.org/image/71zyeag3v/

#247 mark on 06.06.12 at 9:27 pm

Garth, My 81 year old mother has a house in Rexdale that she just does not want to sell until forced to do so. I know you are not a fan of reverse mortgages but would one make sense for her now with serious devaluations starting?

A house and no money? — Garth

#248 Cyclist on 06.06.12 at 9:34 pm

246 John G – you confuse cyclists with idiots on bikes

#249 John G. Young on 06.06.12 at 10:24 pm

#250 Cyclist on 06.06.12 at 9:34 pm

“246 John G – you confuse cyclists with idiots on bikes”

Oh I see. So how do I tell the difference? I’d love to know, so that I’ll be able to get out of the way before I get run over.

#250 To #251: I'm sure you will recognize them on 06.06.12 at 10:56 pm

The real cyclists ride their bikes without saddles. You can see pride on their faces.

#251 To #251: I'm sure you will recognize them on 06.06.12 at 11:16 pm

If you still have problem recognizing real bikers, take a look at these pics with the purest possible bikers:

http://www.buzzfeed.com/mjs538/the-40-best-pictures-from-the-world-naked-bike-rid

#252 Cyclist on 06.07.12 at 12:04 am

251 John

– cyclists dont ride on sidewalks
– cyclists ALWAYS wear a helmet even if its not the law
– cyclists obey the rules of the road
– just like a good driver, cyclists are courteous, aware
and considerate.

In 10s of 1000s of km of cyclying John, I’ve never had a physical altercation with a driver, and the couple of times its come close they’ve backed down (even when there
was 3 of them) becuase they realized I was in the right.

Just yesterday, I had to hit the brakes, when a B-train chip truck entered a bridge at a wide angle because of a dog-leg approach at his end. He saw my effort gave a thank you wave and its all good.

People who ride bikes like arrogant pricks are just that – arrogant pricks. People who see everybody on a bike in the same light are narrow minded.

Pretty funny coming from you.

#253 To #251: I'm sure you will recognize them on 06.07.12 at 12:15 am

Did you know that Garth is a biker?

#254 Van grrl on 06.07.12 at 12:32 am

Hey now, there are definitely idiot cyclists- like the ones that ride on the sidewalk, zipping past my 13 yr old dog and coming waaaay to close to him, and scaring the begeezus out of me- but for the most part cycling is a great way to get around. Beats being a slave to a car!

#255 Derek R on 06.07.12 at 12:39 am

#242 John G. Young on 06.06.12 at 8:53 pm wrote:
as I predicted, he continues to post hateful comments, in response to posts of mine which in no way concern him (eg. #232).

Any other suggestions? I’m open to anything that’s legal…

You know, John, I think you just need to keep doing what you’re doing. I’ve noticed the difference in your posts the last couple of days. There much more interesting to read. The great thing is that you no longer have the negativity associated with your previous responses to the haters. The result is that I (and I would reckon others) now enjoy reading your posts much more.

I’m not saying that you should never respond to attacks. We all need to retain that option and use it occasionally. I’m just saying that you add more to the blog when you contribute material which is not just a response to the haters. Which you have been doing. Kudos! Long may it continue!

#256 Derek R on 06.07.12 at 12:41 am

Aaargh! Should be “they’re” not “there”!

#257 John G. Young on 06.07.12 at 10:26 am

#253 To #251: I’m sure you will recognize them on 06.06.12 at 11:16 pm

OK I think I see the difference now!

Haven’t yet seen anyone meeting your criteria for a ‘true cyclist’, but I’ll keep my eyes peeled. ;)

Cheers,

John

#258 John G. Young on 06.07.12 at 10:53 am

#254 Cyclist on 06.07.12 at 12:04 am

Thanks for your response. I did not mean to imply that there are no good bicycle riders such as yourself — I see many every day as I walk/transit around the city. However, they are not the problem, so I’m not going to complain about them! It’s mainly the ones on sidewalks (see #256 Van grrl on 06.07.12 at 12:32 am) who come around corners or from behind, at full speed — they don’t allow for the possibility that the pedestrians in front of them might suddenly move into their path. It’s frightening, which is the source of my (defensive) anger.
And I know it’s frightening for cyclists who have to deal with cars — that’s why I stopped riding my bicycle on city streets years ago. But the power hierarchy of cars > bikes > pedestrians means that pedestrians are the most vulnerable.

“Just yesterday, I had to hit the brakes, when a B-train chip truck entered a bridge at a wide angle because of a dog-leg approach at his end. He saw my effort gave a thank you wave and its all good.”

It’s great that he recognized he was in the wrong. On three occasions I have confronted bicyclists on the sidewalk, who then dismounted and threatened to physically harm or kill me.

I’m probably more sensitive to this right now as I have mobility issues — walking with a cane because I have arthritis in my hip following a fracture sustained in 2009. The world is a very, very different place when you’re older, and vulnerable.

Thanks again for your response. Perhaps you and other true cyclists can be role models for proper cycling, and advocate for pedestrians — coming from pedestrians the message doesn’t seem to be getting through.

Cheers,

John

#259 John G. Young on 06.07.12 at 10:55 am

#255 To #251: I’m sure you will recognize them on 06.07.12 at 12:15 am

“Did you know that Garth is a biker?”

OMG!

#260 John G. Young on 06.07.12 at 11:07 am

#257 Derek R on 06.07.12 at 12:39 am

“You know, John, I think you just need to keep doing what you’re doing. I’ve noticed the difference in your posts the last couple of days. There much more interesting to read. The great thing is that you no longer have the negativity associated with your previous responses to the haters. The result is that I (and I would reckon others) now enjoy reading your posts much more.”

Hey Derek, thanks for the feedback! Glad to hear that you’re finding some value in my recent posts.
Being angry and negative is not in my nature, it’s purely defensive, and I most definitely don’t enjoy it, so I’m glad to follow your advice. I’m also quite sure that Westernman has read your response and others (eg. #245 Marshy on 06.06.12 at 9:01 pm) and sees that his abuser tactic of attempting to isolate his prey is not working.

Thanks again,

John

#261 Surrey Girl on 06.07.12 at 3:47 pm

#113 Blue Monster Lover of Meats and Vegetables No home build… a Nissan Leaf (all electric). If you want a company to offer a solution in the market place then you had better be prepared to support it. Hybrids didn’t quite do it for me because they still use petroleum. The only petroleum in my car is used in making the tires.