While some fool was paying $481,000 more than the sellers wanted for a geriatric bung in far north Toronto, Vancouver’s melt continued. In fact, as far as anyone can tell, average prices in VanCity are down at least 16% in the last six months, while sales have crashed by a third. And if the local real estate board had the guts to publish average and median sales figures, instead of a Home-Price-Index-Benchmark frankenumber, the city would be in full crash mode. After all, even horny HAM doesn’t play when the sky’s falling.
How could things be so disparate between the two cities?
Easy. They’re not. Nor is it any different in Calgary or Winnipeg, where local reporters tell people houses are safe.
Nobody escapes this. Your financial life could soon be affected more than at any time since the lights went out in 2008. Some people will skate through this unscathed and seize the looming opportunities. Others will be squished. Too many, I fear.
What’s about to happen to real estate probably won’t differ from that meltdown on the stock market. On the way up, with risk rising, investors were horny to buy. On the way down, as risk fell, they were desperate to escape. The greatest selling happening at the bottom, when risk tanked. On March 9th, 2009, millions of people were decimated as they fled stocks and mutual funds. On the same day, thousands of others bought the deals of their life. Contrarians rocked.
What happens next, and how to harness it, is the key. It’s what I’ll be talking about in a few places over the coming month or two.
The first stop’s Ground Zero – Vancouver on Monday evening, August 20th. If you’re interested in this stuff, then come and talk about it. The event is free, and I now have a location for you:
Pinnacle Ballroom
Marriot Vancouver Pinnacle Downtown
1128 West Hastings (between Bute & Thurlow)
Yesterday about 700 people signed up, but there’s still room. Doors open at six and the dancing Amazons begin at seven. Bring your Bics. And your idiot BIL with three houses. Reserve a seat or two by using the link below, and you’ll receive an email confirmation.
Register now for the Vancouver Event on August 20th
Now, while BC sinks (Victoria, Parksville, Nanaimo, the poor Okanagan and furry parts of the Fraser Valley), what’s up with the GTA? What are we to make of the latest bungalow orgy that gripped an entire metropolis?
In case you missed it, an ugly relic of the Sixties on a decent lot in a somewhat commutable corner of 416 sold for 50% more than the list price. What went on the market at $869,000 ended up fetching $1.35 million after forty suckers were roped in to a de facto auction. It’s a time-worn and proven technique. Advertise a property for three hundred thousand less than neighbouring ones, and stand back. Smelling a bargain and reading stories about the coming correction, vultcherettes swoop in. They get juiced, just in time to learn there are ten other offers. Agents tell clients they get only one shot at ‘winning’, so give it the old Olympic effort. And when it’s all over, a house listed for $300,000 less than it’s worth sells for $200,000 more than market value.
What were people thinking?
Hard to tell. Given the obvious crumbling of the new condo market, slowing overall sales, a drop in SFH prices in 416 and the as-yet-unfelt impact of F’s mortgage changes plus coming bank changes, buying now’s like loading up on growth stocks in 2007. Or buying a house in Richmond last Spring. There’s only one direction in which to travel.
But timing markets takes an emotional toll, especially when you disgust your spouse. And that brings me to Herb.
Dear Garth, I have been reading your blog for many months now. I have been looking for a house for over a year. I sold both my principle home and a rental 1 year ago in the Woodbridge area, but have extended the closing until now. I looked at lots and lots of houses with my agent and every time I was shocked at the price and what I was getting for my money. My agent seemed to think everything was fine, but I couldn’t stand the thought of waiting for years to sell my properties only to trade them for a $1M fixer upper.
We close on our sale in Aug and have the option to rent our own house back for $1500/mth until Feb, then we must move. After reading your blog, I am starting to believe that maybe the best thing to do is wait.
My wife is disgusted by the idea of renting when we could buy. I will admit that I am a little house horny as you would say and want a nice house, but at today’s prices I cannot really afford one without taking on some serious mortgage. I have a little under a $1M net after closing and capital gains tax. I told my wife that with money in the bank, it shouldn’t matter if we rent or buy, as long as we have a place to live and be comfortable. This does not sit well with her and she says we are putting our lives on hold for this and maybe we should just buy a house and move on. Sadly even with that money in the bank, not being able to buy our forever home makes us both feel poorer than ever. Sounds backwards but its true and difficult to get out of your head. Especially when your whole family is telling you that prices are only going up. “You better just find something and buy, what are you waiting for? Just buy that crappy subdivision home for 1M+ and then you can fix it.” When I mention that I might just rent for a while they look at me like I’ve lost my mind. My sister and father tell me that prices aren’t going down and to stop thinking that.
Question: Will paying $30,000 in rent per year to wait for a possible drop in house prices be worth the wait? House shopping is hell on earth. Our dream of trading up to a beautiful home has turned into a nightmare of disappointment requiring the patience of a saint to withstand. Thanks for reading, keep writing the blog.
Herb, you’ll have a million bucks to invest, which could kick out more than enough after-tax money to rent a great place, in effect costing you nothing. If your wife’s family browbeats you into buying now, will they be there two years on to apologize? Are you ready to see two or three hundred thousand erased as that chunk of the suburban-hinterland GTA goes up in smoke? Why not just follow your gut instinct, instead of using this money to bail somebody else out?
If you’ve been lurking on this pathetic blog for months you surely read the comments from Vancouver house-pumpers who denied every indication that market was sick – bidding wars, dumbass prices, greedy vendors, and relatives who measure manhood in frontages. You’ve done the right thing so far, Herbie, don’t cave on us now.
Be that saint. The heavenly granite reward will come.
153 comments ↓
Now you can short HGTV!
Yes, HGTV is owned by a publicly-traded company: Symbol SNI.US
http://www.scrippsnetworksinteractive.com/
Scripps Networks Interactive
Scripps Networks Interactive is a leading developer of lifestyle-content for television and the Internet. The company’s brands includes HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and country music network Great American Country.
(Disclosure: never short individual stocks. You are but one news release or takeover away from ruin. See: RONA’s recent takeover offer).
Any chance we’ll see you speak in Kelowna?
Garth.
Edmonton??? Coming???
“What were people thinking?”
Maybe there’s just too much money around. People want to put that money – even if they don’t actually HAVE it – into hard assets.
Smells like credit inflation, doesn’t it? C$1.35m…Is it any wonder?
Patience of a saint? Herb, you have completely lost it… A million in the investment vault at 5% is 50K in sweet dividends a year. Slap yourself for me.
How do I keep getting First? It’s syncronicity I tell you. Yesterday I had two times in mind: 9:35, then 45pm EST. Latter proved correct.
I know, in Vancouver there’s only a few downtown hotel ballrooms large enough. Westin, Sheraton, Hyatt, Fairmont Hotel Van, Marriot, and the opposite Rennisance.
I live out in the Fraser Valley, and, unfortunately I still get to go to work. That’s not as bad as it sounds, I actually get paid and I really enjoy myself.
But, my schedule makes it impossible for me to make it to your Vancouver event. I would have really enjoyed being there.
Maybe someone will record it and put it up on Pirate Bay.
Come to Halifax Garth! Be wary though, the audience may throw codfish when their ‘prices will rise forever’ mantra is disputed!
Ben Jones has a Canada special.
http://thehousingbubbleblog.com/index.html
At breakfast this morning, a friend mentioned he had just rented his condo….i asked more…..
Turns out to be a place in a brand new building in a trendy part of Port Moody, BC.
Bought it off plan 2 yrs ago, after a realtor “friend” told him he could not loose !
Paid $400k for it, and intended to flip it on completion.
Anyways after 6 months of trying to sell it at $379k he has finally rented it with a negative cash flow of $500 a month !!!, saying he would rather rent it that looose $50k now.
He also admitted that he used his Heloc on principle res. to provide the 15% deposit…100% fiananced !!!!!
When i pointed out that in 2 yrs time when he comes to renew his morgage, he could very well be in a far worse position, he did’t get it !
Told him to get indepentant financial advice ( not banks, realtors etc) asap.
When his morgage renews and his condo has sunk further, he wont be able to renew !
How many thousands of times is this similar story of amateur flippers repeated across this counrty ???
Ohh my god !!!!!!!!!!!!!!
Sadly even with that money in the bank, not being able to buy our forever home makes us both feel poorer than ever.
And this is the problem – Society has valued house “ownership” so much that all renters are dismissed as “lowly” or “poor” renters, and blithely dismissed as a form of Second Class citizens.
Welcome to the “New Normal” where “Prices have reached a new long term plateau”.
Heard this before? Ask the Irish, Spanish, British, New Zealanders, Australians, and most of all the Neighbours to the South – we’re SURE they will agree . . . .
Rent (now) Invest (diversified, income generating) now, Vulch (later!). There will be abundant opportunities to buy ALL kinds of assets at pennies to the dollar as the overextended HAVE to liquidate “to pay the Mortgage”, and you DON’T NEED A HOUSE to live in either – there are other forms of shelter that are FAR more interesting to own for all kinds of reasons . . .
Enjoy!
Garth can you or anyone else please explain the hpi. More specifically how the numbers are used to fudge the truth. My understanding is that by using a national average rather than a local one reduces the appearance of severe corrections. ie:A 20% correction in Vancouver would not affect the hpi because the rest of the country hasn’t corrected. Is looking at the hpi as an etf similar, where some companies get creamed and others scream?
http://www.realtor.ca/propertyDetails.aspx?propertyId=11791354&PidKey=-1879610022
HAM & Champagne in Richmond BC.
A few inches below sea level but who really cares.
Geez, a million bucks burning a hole in your pocket and your full of angst?
Herb, grow a set. Put 10 percent each into USMV and ZRE, 15 percent each into ZDV and ZLB, and the final 40 percent into CPD.
That will give you 39 grand per year in tax efficient income from a diversified portfolio. That should cover rent.
Take heed. Because the stupid decisions made today will leave you penniless at death.
After thousands of years of civilization you’d think our ancestors could accumulate some wealth to pass on. Ever wonder why your inheritance is diddly? Because they pissed it away on poor financial decisions. Like buying a $1M fixer-upper.
http://www.planbeconomics.com/2012/08/06/study-many-americans-die-with-%E2%80%98virtually-no-financial-assets%E2%80%99/
ten percent in one of those manitoba credit union internet bank accounts at %2 annually. the rest in dividend portfolio.
1million+ crappy fixerupper subdivision home? What subdivision is that? Subdivisions aren’t supposed to be for millionaires? What are the taxes on a thing like that? There is something profoundly unfair about all of this.
Disciple:
“Patience of a saint? Herb, you have completely lost it… A million in the investment vault at 5% is 50K in sweet dividends a year. Slap yourself for me.”
———-
Posted one more time. Here’s your “investment vault”
( just to be fair to all sides here).
As far as “investment vaults” go, this is the place your money is going. This is the big picture. In other words, you’ve lost it.
Break down the argument for “5%” coming from the “vault”. In the real world context of the following realities you are obligated to ignore ( hold on to that slap for Herb):
http://comiterepubliquecanada.ca/Canada-s-Housing-Bubble-Blow-Out
Herb, here is a thought. Rent for a year or two at 30k and take the wife on a 20k getaway to Hawaii or Fiji or Barcelona, or new Zealand or wherever. Actually, rent forever and do the yearly trip for the rest of your lives; what an opportunity! Or; pay through the nose for a small lot in a crowded neighbourhood and spend your time cutting the bloody grass! Your call!
Garth,
Any plan for Calgary visit? I am pretty sure Chapters Dalhousi will not be a right location this time.
Looking forward to hear your advice on preferreds.
Thank you!
#10 sanddancer – Why on earth would you believe a realtor.
Garth, S’toon needs you to stop here and pound in the Saskatoonians heads that potash, uranium, oil, gas and coal will not save our housing market. One house in my area (South side -Stonebridge) has been on the market since beginning of June 2012, started at $449,000 and now is listed for $419,000. I’m thinking by October it’ll be $399,000.
$1M in the bank, you’ve obviously got lots of options.
For Herb, the key is making sure that he involves his wife in the decisions — she may even get over the house ownership obsession and love being “closet millionaires”.
When you see a HGTV reality show on “millionaire renters”, it might be time to buy again.
Hi Garth,
Do you have a book in the works on how to take advantage of the real estate deals to come? I’m interested in getting some cash flow positive real estate but good deals are rare these days. I’m sitting in a cheap rental collecting 5% on my bank preferreds as you advise. The people who actually listen to you, grow a set, and tell the spouse “we are renting for a year or 2” will be the hero of the family. Doing the right thing is never easy. Thanks and keep up the great work! Rob
Most homeowners have no clue as to how illiquid a property can be to sell. They no nothing other than properties that take 1 week to show, then sell on the offer date.
Garth, come to cowtown, we’d love to have you.
Seems to me that Herb can afford a few hundred loss, just like some other RE owners writing on this blog.
Herb’s been smoking. Not sure what though.
#12 – I’m stupid:
“Garth can you or anyone else please explain the hpi. More specifically how the numbers are used to fudge the truth. My understanding is that by using a national average rather than a local one reduces the appearance of severe corrections. ie:A 20% correction in Vancouver would not affect the hpi because the rest of the country hasn’t corrected. Is looking at the hpi as an etf similar, where some companies get creamed and others scream?”
_____________________________________________
Last week I found a 26 page PDF of how HPI is calculated. Tonight’s search found a 32 page PDF. HPI is a joke.
http://www.yattermatters.com/wp/wp-content/images/2012/05/HPI-User-Guide-mls%C2%AE_hpi_user_guide.pdf
you should put $500k in dividend paying stocks that yield 5% eg BCE, CM, CPG, and put the other $500k in a redeemable GIC Achieva Financial is offering 2.15% so on
1 mill you will be yielding Gross $35,750.00 not bad
Why would you invest $500,000 at less than the inflation rate, for fully-taxable interest? — Garth
“Ontario’s economy might be worse than California’s” ?
If it is, then God help anyone who has recently bought a house because we all know what has happened to California’s economy.
http://ca.news.yahoo.com/blogs/canada-politics/ontario-economy-could-worse-california-210518512.html
And your idiot BIL with three houses. – I LOL’d when I read that – but then wanted to almost weep. My youngest bro married his lady 2 yrs. after being together for 15 yrs. They have 3 houses between them. She owns one in Hfx, a large older home over looking St. Margret’s Bay (her dad mostly paid for it) & bro owns a small winterized cottage across from a beach 5 kms from his wife. Bro’s land is more valuable than the house. They don’t live together other than the weekends – at mostly his place. He tries to maintain all 3 places – summer & winter. !!!!!!!!!
Why would you invest $500,000 at less than the inflation rate, for fully-taxable interest? — Garth
Because Stocks are not 100% at least he can count on having half of is money safe. and if we do have deflation his money would be worth more anyway
Who said anything about stocks? — Garth
I was working in the middle east in 2011 and went on holidays in Sri Lanka. One thing I recall vividly and it remains in my mind to this day. I had a long conversation with an American from Phoenix on a long train ride that goes through the country. He was involved with the construction industry and build 4 houses and sold them near the peak for investment purposes. A long story short he was familiar with Canada’s housing industry and he said it was a matter of time and Canada would be in the same situation as the States. Maybe not to extreme but there would be a significant correction.
He mentioned all the same issues and concerns in the US that we have experienced and/or now experiencing in Canadian media for the last few years.
sanddancer: he used his Heloc on his principle res. to provide the 15% deposit!
When I pointed out that when he comes to renew his mortgage, he could be in a far worse position, he didn’t get it !
pretty funny
Dearest Herb
As I love you like the stranger I’ll never meet you deserve some straight talk as opposed to Mr. Turner’s uppity chit chat.
So, some years back, you n the missus bought a couple properties. Today, due to your exceptional financial acumen (you were in the right place at the right time and have more sense than your average kumquat) you have sold said properties and are gonna be sitting on a million hard.
I’m going out on a limb here and assume you and the wife are still working so you have current income. If not, doesn’t really matter.
Herb, this has put you into the top 2% n change of all your fellow Canadians. Let that sink in for a sec or three then break out the box of wine, a couple of straws and gloat.
Oh but wait, you and the wife aren’t satisfied. You aren’t happy with this and worse, your inlaws think you’re loopy. Herb you are under some serious pressure. So here’s a couple things to mull over before you toss yourself off the coffeetable.
1. Think back to when you bought these two properties and be honest-did you actually think back then that you’d be writing to a blog in 2012 bitchin that you had a million in cash to invest and have fun with?
2. Way back then was a million chump change as it apparently is today?
3. How many of your inlaws have a million hard? No they don’t get to count their house. They haven’t sold it yet so it’s ‘worth’ dick.
4. If you wait and the market does correct your ‘forever house’ might be available real cheap and you’ll have the rarest of things-cash to buy it!
5. If the housing market never ever ever corrects but keeps going up in perpetuity as all things in a bubble always do you’ll still have your million in cash. Sure you’ll be shunned and mocked by your family, your wife will probably leave you but you’ll still be able to eat name brand cat food.
Herb you got lucky. You had the good sense to cash out. Now quit whining, earn 5% a year, rent some nice digs and tough it out on 50k a year (assuming you’ve no other income-if you do and wrote this, you are in fact a kumquat) , disown your family and be happy.
You’re welcome.
Met a drunk realtor having a beer at the bar :
Whats the difference between Vancouver and Toronto ?
Two months.
House shopping is hell on earth. Our dream of trading up to a beautiful home has turned into a nightmare of disappointment requiring the patience of a saint to withstand.
——————————————————————–
No comment on Herb’s specific financials, but his above words capture exactly how we feel, waiting since 2010 to buy a place around the GTA. Been a torturous 2yrs so far, with the GTA still not ready to turn around like B.C.
How many realtors does it take to change a broken light bulb ?
None. There’s nothing wrong with the light bulb.
The drunk realtor I met at the bar, and he got a 3000$ / 2 months online course, also told me there is no bubble and to buy now. Do you hear that, award-winning renowned economists ?
Herb’s got a good question.
He’s convinced his wife to sell.
The market, and we, have convinced HIM that it’s not a great time to buy.
However, his WIFE has not been convinced that it is a great time to buy. She, and **everyone else around them** is convinced that prices will never go down, why not buy now and get on with other life decisions? (and they’re right if that flawed and frequently-proved-wrong assumption is chosen)
Herb’s wife needs to get something out of renting that she cannot get out of owning. Clearly she doesn’t recognize that the fuzzy and intangible (but very real!) sense of freedom, or protection from impending financial doom or just plain illiquidity is a real and true benefit.
So Herb, take #19 Ken’s advice. If you can generate 5% in return on the $1M, and let’s say you pay $10K in taxes on that income and $24K in rent, that’s still $16K in investment income leftover. $16,000 of spending money Herb’s wife wouldn’t enjoy if it was all locked up in the house. Start spending it on nice meals out, spa days, nice clothing, vacations …. whatever. Within the limit of the leftover income. Every time she’s got that “wanna buy” look, remind her the extra life enjoyment she’s enjoying now will disappear as the income-producing capital is squished flat by the house into economic deadness (aside from the shelter utility of the house, but while renting you had shelter plus the extras!)
Who knows, maybe the family will shut up too after Herb picks up the tab for a family dinner a few times. And in a few years when the time is ripe to buy back in they might wanna keep renting…. but that’s a problem for another day!
You’re totally wrong about the Toronto house. A) it is not ugly, 1960s architecture is very much back in vogue. B) the lot is 170 X 200 and can be subdivided into 2 or turned into a mini mansion like the rest of the neighbourhood. People with money pay a premium for a mature tree lined, no sidewalk street with large lots very close to amenities. In fact it’s one thing they aren’t building any more of – convenient locations and pretty looking streets, wow that’s almost impossible to find. We now have entire cities like Mississauga or Ajax or Pickering or Brampton with not even a single house that would meet the criteria of being on an esthetically pleasing street close to amenities and good transit.
Sure, million dollar houses in Vancouver may only be going for $900,000 now, big deal. They are still far too unaffordable for 90% of wage earners. You still can’t get a decent two bedroom apartment for under half a million in Vancouver.
Yeup,
Ontario has 3x the debt of California.
Plus, Ontario has 1/3 fewer people.
Doesn’t take much to do the math.
“Winnipeg expected to escape cooling in Toronto, Vancouver”
http://www.winnipegfreepress.com/business/real-estate-chill-not-seen-here-164987386.html
Free koolaid folks – it’s different here :-)
How many realtors does it take to change a broken light bulb ?
None. There’s nothing wrong with the light bulb.
Wrong. First turn will cost you 7%, second turn 4%, third turn another 4%, and so on, until you find out the bulb needed to be replaced to begin with. That’s the beauty of being a realtor and selling someone elses’ asset – the realtor is just a suck and nice to you until it sells. Afterward, no where to be seen. (well, at the nightclub, maybe).
That property is in one oif torontos most desirable spots. The rest of the street is million plus mansionbs. Do not like the listing tactic but it is probably worth 1.35 today and tomorrow.
I believe the Vancouver market is dropping, but can some explain why the MLS Home-Price-Index-Benchmark is a frankenumber and misleading?
The industry claims it is a more fair comparison of figures.
#40 Vikay
Well, presumably, it was a good time to sell, and she was convinced of it without specific plans to re-buy. It cannot be both a good time to sell and a good time to buy, at nearly the same time, and in real estate terms, a couple months won’t get you prices dropping enough to cover your transaction costs.
Garth, I have signed up for your Vancouver talk. I would like to know when your talk ends. Thanks,
Herb, you’re at a rare moment of financial freedom. At least rent your house back till Feb and live it for a few months. Think about. Ask your wife and yourself what you really want from life and what your new options are with no propery burden and a million cash.
If you still throw that freedom away, then at least you took the time to choose with real cash sitting in the bank and real options before you.
FWIW, some 416 market data, based on primarily East York. Interesting that the semi-detached market looks significantly stronger than the detached market.
I’m not showing the breakdown by neighbourhood (for brevity), but Beaches looks weak, South Riverdale strong (both are expensive neighbourhoods), and a bunch of middling areas look middling. No real rhyme or reason I can see (yet) behind the by-neighbourhood data.
The table shows number of homes sold above asking versus total number sold. So “3/5” means 3 of 5 properties sold above ask.
[This is an update to the data I posted on 7/17 and 7/18].
…………….. April. May…. June.. July
all.Detached….. 52/76. 49/87.. 36/63. 23/59
all.Semi-Detached 35/49. 55/78.. 33/44. 20/28
all.all………. 94/138 110/175 72/112 45/90
Overall, 50% of properties sold above ask in July. Clearly a drop from April/May/June, but in relative historical terms, or compared to, say, the condo market, still high.
I continue to be amazed at the relative value of the O’Conner-Parkview neighbourhood (versus pretty much anything else in my dataset).
It’ll be more interesting when a can do a year-over-year comparison (assuming I don’t lose interest in this data collection prior to then).
–
At long last! New meaning has come fourth to the frayse “Please fondle my bum” — It has been completely exposed!
*
“What were people thinking? And if the local real estate board had the guts to publish average and median sales figures, instead of a Home-Price-Index-Benchmark frankenumber, the city would be in full crash mode. Too many, I fear. After all, even horny HAM doesn’t play when the sky’s falling.” — Precisely the way the m$m operates. They know sheeple will lap up good (but fake, false) news, so they report it. As far as thinking, when sheeple let their emotions run their lives, thinking is an optional after-thought.
“Herbie, don’t cave on us now. Be that saint. The heavenly granite reward will come.” — The Right Reverend St. Pasta Garth has spoken wise words, along with #5 disciple — Sew your wild oats carefully, and enjoy the seven good years of having a rich harvest (and more), receiving nice income leaving you and yours fiscally liberated via renting. Let the bank preferreds, corporate bonds, REITs and dividend-paying shares pay you to own them, while letting someone else pay for the necessary repairs and upgrades.
*
Young people ignoring pubs, and Young people saving for a rainy day; Trains New delays. Not sure if this is the Cdn. Bombardier; Politics talk; Argentina and England As both countries are broke, it is a level playing field; BCCI (Rothschilds) playing around with Muslims; Signs of GD2 Signs? Food Price Rises Going with neo’s and Canadian Watchdog’s posts from the previous thread; Puts and Calls Lots of activity; McDonald’s Trying for a 37-hour day to increase profits; Heavy Duty Trucks New orders have reached zero; 25 People to blame for the fiscal downs; Phony Recovery Blame the US Fed; Another Day, Another Glitch Derivatives in Tokyo; Ditching Florida; Spooky Chart Clock’s ticking.
Social Security Free money comes to an end; Bernanke Citizens have become numb to all the changes happening; Berkshire Increasing cash reserves; S&P downgrade? Who cares? Gold Miners Good for TFSAs? Bonds beating stocks (so far); Californians are just plain nuts; Passing the Libor buck to minions; 58:54 documentary Why the US Fed violates the US Constitution; 0:48 clip Foaming the runway for the banks.
*
2:13 clip Hundreds of tanks rolling thru Burbank (some naughty lingo). Wonder if this has anything to do with the uprising in Anaheim? Or this? Billlary What a person puts out is exactly what they get back. Karma’s a bitch; 360 degree virtual tour of Owelimpics; Inflatable Sex Doll Better than inflating bubbles; Denial River Here is it’s twin, the Nile; Fukushima 168 Hiroshima’s in one go; Ghostbusters Who ya gonna call? Now, thread these three together to gain a bigger perspective on life and how it’s changing; Very nice pic of earth; 1918 Flu Pandemic 60 mln. (+ / -) gonzo; FDA Approved Ingestible microchip tracking decides in pills.
*
disciple — The sub-, or unconscious is from the Etheric Plane, the last of the lower psychic regions. Some stuff here. In the lower psychic regions, creation is finished so there is hardly any difference between the Physical – Astral – Causal – Mental and Etheric Planes, except the size.
Dear Herb,
Take my advice. Move now. Don’t wait ’til February – who wants to move in the middle of winter. Then rent. You need a new perspective. Even if you stick the money in the bank, you’ll clear $1000 a month on a million. You won’t be paying $500 a month in real estate taxes and you won’t be paying to fix stuff around the house.
When you rent, your house won’t be perfect, but it won’t be down to you to fix it but you also realize that a lot of things don’t actually need fixing or replacing, they are just nice to have. The appliances we have are brand new SS but not the quality we are used to. They’ll do.
You’ll also be shocked to find just how many of your neighbors are renting, too. ……. And sitting on a pile of cash is soooo comfortable.
Come over to the dark side. It’s cosy here.
Herb,
take the wife on a trip of a lifetime to Paris, or Rome, or Spain, or Egypt. Take her anywhere she wants to go, luxury all the way, in return for renting for another year.
Do this for two years in a row. Two years is all you will need, one year at best, before the market will convince her and all of your relatives where house prices are headed. At worst you’ll be wrong, at best you’ll be right, but the two of you will have some fabulous memories to enjoy.
Or maybe she wants a nice car to enjoy? Ring on her finger? Yes, BRIBE HER! You get another year of renting, no fuss from her, she gets X.
#42- maybe but the decline has only begun……….
The last move back in the fall of ’87 when the real estate market hit the absolute peak the move was to sell in the GTA area and buy in Elliot Lake. Now the best you can do is move to another city where prices won’t fall because commodity prices will fall off a cliff in the next few years. This is if you stay within Canada. So buy a century house in the middle of nowhere in New Brunswick or Newfoundland or rent and wait about 20 to 25 years.
Why is it that so many people equate paying rent to shining the landlord’s shoes? It seems there are too many people who would rather risk losing hundreds of thousands of dollars buying their own house because they are impatient rather than pay someone else’s mortgage. Then they can’ move on’ How is it that otherwise intelligent peoples’ wiring ‘short-circuits’ when it comes to housing. How is it that people cannot sleep nights unless they own their house? A few decades ago people lay awake at night if they were in debt. Now it seems they sleep very soundly owing 500 or 1000 large on their bungalow. This is a good example of how people are conditioned and programmed to act and think in ways to fuel these manufactured boom and bust ‘cycles’, which are designed to leave average people with net losses while the few insiders laugh it up smoking Cubans and sipping brandy as they rake in the money.
Emotions stem from our egos. Most people think ego is walking around with your chest puffed out, that is, if you’re not sitting on your throne looking down on your subjects. The fact is that ego has many faces, including feeling sorry for one’s self, an unreasonable sense of entitlement, coveting other peoples’ stuff, and fear, just to name a few.
If your wife’s family browbeats you into buying now, will they be there two years on to apologize? Are you ready to see two or three hundred thousand erased as that chunk of the suburban-hinterland GTA goes up in smoke?
Good point. Maybe an apology from the family is worth a 300 grand price tag for Herb. Or maybe 300 grand is worth telling them he told them so. After all, 200 or 300 large will only add 10 or 20 more years to the mortgage payments. Maybe the family will be telling Herb to sell when house prices bottom out in the area. Doesn’t it usually work out that way with the ‘herd mentality? That is we buy high and sell low rather than the other way around? Herb, you have it half right so far. Don’t undo the first half by being impatient.
#27 Pat on 08.06.12 at 10:23 pm
Seems to me that Herb can afford a few hundred loss
—
I’m with Pat. Why are we saving this guy? He’s a grown adult and someone that can stand to lose a couple $100k. Let nature take it’s course.
What next, we teach deer how to wear bullet-proof vests?
Wow! 700 already registered? It looks like you’re working harder than the adhesive on the adult diapers used by most of the sitting Senators up in Parliament Hill. Will you be charging anyone to have their picture with you?
http://www.youtube.com/watch?v=akVWFiptGNY&feature=fvwrel
WOW I am sooo glad my wife and I are cured of this!!! I much prefer having my dividends paying my rent, my landlord paying the bills!!!!
He needs to none up on investing and and soon enough people will start coming to him for advice and the rent nay sayers will disappear
Hi Herb (and the rest)
Y’know… as think about what people value (possessions, money, material wealth etc.) I do hope that we value life more (and try not to possess it like slave owners do). I hope that we realize our money and investments are “fiat” and our true REAL estate is this planet. I had thought about what advice to give (REITS until interest rates rise, likely between the summer/fall of 2013 and the fall of 2014, bonds that can return capital gains outside of yields, preferreds until the BoC raises rates to 3% and to not close the door entirely on equities. I know folks here don’t like equities much because they’ve scorched investors this year but there is always opportunity out there and one cannot turn our back on equities entirely), but the advice I feel trumps whatever I could say about monetary investments and possessions themed with diversity is one of alerting readers to whats happening with our climate. As most already know, the U.S. is facing a major drought and its adversely effected the corn belt:
http://www.bloomberg.com/video/kansas-state-s-o-neil-on-drought-s-financial-impact-8nir39VeSUSU_Ey6vavzfg.html
Half of the county’s and states are now declared a natural disaster due to drought. Rain won’t help this years crops, already too advanced:
http://www.newschannel10.com/story/19208292/half-of-us-counties-now-considered-disaster-areas
http://droughtmonitor.unl.edu/
Most would attribute this to La Nina:
http://en.wikipedia.org/wiki/La_Ni%C3%B1a
… while those with common sense would see quite quickly that these extremes aren’t related to HAARP but climate change. A scientist at NASA has recently introduced a study thats says our weather extremes are statistically impossible to be anything else other than man made global warming:
http://www.thestar.com/news/world/article/1237981–extreme-heat-drought-have-virtually-no-explanation-other-than-climate-change-new-study-says
Its making full blown climate change skeptics such as Richard Muller:
http://www.courier-journal.com/article/20120805/OPINION04/308050037/Neela-Banerjee-climate-change-denier-no-more?nclick_check=1
… do a 180 only his research was funded by two billionaires (the Koch brothers, fierce climate change deniers) and to date could be the most comprehensive privately funded research in and of this world.
The science itself is hard to dispute:
http://www.skepticalscience.com/co2-levels-airborne-fraction-increasing.htm
And seeing, is believing (try the 6:45 minute mark):
http://www.youtube.com/watch?v=YFFELWETs8g&feature=related
The highest summit in Greenland (over 10,000 ft above sea level) hit a 42 degree C high this year. 97% of Greenland experienced a 4 day melt in early July). This is just the half of it:
http://main.omanobserver.om/node/105473
Atmospheric CO2, ocean acidification, weather extremes, I like making money as much as the next person whether its in the oil patch or through investments but our way of life the way we use and perceive energy is unsustainable and we are collectively responsible and accountable for what is happening. Where do we go from here? Do we get activist like Anonymous?
http://www.youtube.com/watch?v=P3G6uIgCxSk
Or do we simply form our paridigm morality from BNN and CNBC. From an investor’s point of view, from a shareholder’s point of view, the best way to insure ourselves against loss is diversification. We can thank our lucky stars for insurance that covers us from corporations and derivatives to governments (unless its poorly regulated and systemically abused by governments, hmmmm…. Anonymous) but its through diversity that we survive as investors and through predicting where the next bubble will be before it forms that investments provide our security and wealth.
Its high time we looked at the electrification of transportation and CO2 as a serious threat to everyone’s well being including financial and invest accordingly. As oil is the harbringer of war, energy independence is the mother of peace. Its up to investors, bankers and entrepeneurs to make it our next bubble and as a suggestion, look into commodities and tech that can make this happen.
So… I’m going to recommend a stock to readers in an effort to consider equities as a part of our diversified portfolio. (disclaimer: I own 170,000 shares) As much as I see Italy, Spain and possibly Portugal making plans to leave the Euro next year reeking havoc on the markets, I still like the supply/demand side of graphite in the near (9 months) and long term (Europe could bruise portfolios next year) and EGZ as holding what they claim to be the worlds largest graphite deposit. While the corporation has yet to prove it, Their Molo deposit looks like it could well be the largest in terms of tonnage, grade, its open pit and relatively close to a deep sea port with agressive management, has positive numbers with increased share valuation in mind, an excellent narrative and timeline of development and potential for further resource expansion separate from the Molo deposit but what I most like about Energizer is how graphite fits into green energy and tech. Its all about timing and its shaping up to be Energizer’s time. Its the only equity I feel comfortable suggesting to investors from an profit, environment and idealistic point of view at this point right now so give it a look and best of luck !
http://www.energizerresources.com
Bring your Bics
What the hell is a Bic?
Aussie Headlines
It’s different here, prices never go down, you bubbleheads are idiots.
Now for REALITY.
Woman buys $1.55m holiday apartment at Broadbeach for just $381,000
http://www.news.com.au/realestate/woman-buys-155m-holiday-apartment-at-broadbeach-for-just-381000/story-fncq3era-1226444507971
Buyers are being lured with incentives including $15,000 discounts, developers taking on stamp duty costs or reducing the size of the deposit for properties.
The stamp duty savings of up to $22,490 ended on June 30 and agents say last month was quiet. The new $15,000 grant for first-home buyers of new property priced up to $650,000 doesn’t kick in until October 1.
Ian Bennett, a director of residential at Colliers International, said after 130 sales in just one project in June they had ”been lucky to sell 20” since then
http://smh.domain.com.au/real-estate-news/buyers-offered-added-incentives-20120804-23maa.html
Are you redundant? These are the top five jobs facing extinction
http://www.news.com.au/business/your-business/redundant-the-top-five-jobs-facing-extinction/story-fn9evb64-1226443880276
So whats next “Steve Keen”?
http://www.debtdeflation.com/blogs/2012/08/07/interview-with-fnn/
Herb, don’t be this guy (asking prices for a gorgeous 4 br waterfront chalet on 4 acres, about an hour from Ottawa):
Original list: 1.8 million
3/4 year later: 1.625 million
1/4 year later: 1.2 million
Now (more than a year later): 0.998 million
So on paper they’ve lost in their minds over $800,000, and likely will get less than current asking for that property.
http://www.century21.ca/OU8760989?centris=1
What do you call a fly with no wings?
A eunuch… er no ,i mean a walk.
Yeah that’s what i meant A walk.
That’s the ticket,a walk, not a eunuch.
#47 InvestX on 08.07.12 at 12:43 am
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I think in a nutshell the ‘Frankenumber’ does give you a comparison of prices on similar homes, however, it does NOT give you an accurate representation of the overall market.
So if 25 high end homes and 25 low end homes sold last year, but 0 high end homes and 15 low end homes sold this year, the comparison would be made between the homes that sold this year and the low end homes from last year.
I’m not an expert on the Frankenumber, but that’s how I understand it works.
Considering the nuclear fall out from fukushima thats been spread around the northern hemisphere it is entirely possible that every last structure is to some degree contaminated with radio isotopes and unfit to live in and therefore totally worthless. May be this possibility is why radiological monitoring has been shut down to keep the public from panicing due to knowing the true situation and to maintain the belief that real estate is worth something if people don’t know it is contaminated. Without a geiger counter you can’t detect radiation. Most people don’t have geiger counters. What would it cost the government if it were proven that canadian homes were dangerously radioactive and unfit for human habitation?
If there was sufficient evidence of contamination all the mortgages would be worth nothing because all the properties would be worth nothing. For the banks, governments and home owners the loss would be near total which is why mums the word on radiation from fukushima. Mass ignorance of the true situation is strength for financial and political institutions. If the people get sick and die of radiation and die in ignorance there is no need to pay pensions to any one is there? Like Orwell said,” Ignorance is strength”.
In spent fuel pool 4 there is 460 tons of radioactive fuel.
It takes ten pounds of weapons grade material to make a fission bomb like what destroyed Hiroshima. It is only nessesary for that fuel to catch fire and burn for there to be a release of radioisotopes that would be the same as tens of thousands of Hiroshima type nuclear explosions. Yes a relatively slow burn of 460 tons of radioactive material could be the coup de grace for the world. All it take is for the pool to fall over and drain or go dry and the nuclear fuel can burn. These fuel pools are not inground pools either they are built above the reactors. So if the building suffers enough damage to bring the fuel pool down it is adios muchacos or if you like game over.
This is why no nuclear facility on earth should be built near earthquake zones or attacked in any way.
Never before have so much been lent out to so many to pay too much for so little that could possible become so worthless due to something deadly you can not see, hear , taste or smell.
#41 detalumis on 08.06.12 at 11:37 pm
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The suburbs of today (especially around Ottawa) make me sick. How can developers get away without putting in sidewalks, parks, commercial/retail, or even the right about of access into and out of the neighbourhoods? There’s a community in Kanata that effectively has only two roads (in and out) that services thousands of people. It’s just disgusting.
@ #48 Devore …. my bad… typo. that should have said “his WIFE is not convinced that it is a BAD (not good) time to buy”.
Bottom line, like a couple of posters had to say… pay the taxes on the income, the rent, and there will still be money leftover for “extras”. Like what #54 tkid said… trip of a lifetime… nice ring…. bribe her ….
Nostradamus La Mad Vlad wrote:
“The Right Reverend St. Pasta Garth has spoken wise words, along with #5 disciple — Sew your wild oats carefully, and enjoy the seven good years of having a rich harvest (and more), receiving nice income leaving you and yours fiscally liberated via renting. Let the bank preferreds, corporate bonds, REITs and dividend-paying shares pay you to own them”
Thanks again for your links…there’s nothing you don’t touch.
Somehow, your informed position evaporates as you side with the idea of the “investment vault”.
Wouldn’t that “investment vault” be super iffy given all the information you’ve uncovered? Should it even be a question? Is it kind of odd ( over the top odd) that someone has to even ask that?
Would you agree that people would have to stay in the dark for your “investment vault” scheme to work?
Where would you be getting your conclusions from? I know the “bank always wins”…but it still requires the same paradigm for those who cash out fake equity to continue to get “paid”.
Is it actually a doable game that the banking cartel digital money can be “invested” by the group Goldman Sachs called “muppets”?
Do you think it’s a good strategy to hide out and play with dwindling casino chips…while casino owners run for the hills…after pillaging your neighbours, friends and family?
Where are people getting their ideas from?
So maybe you can break down the context of your comment. Because it’s wildly incongruent with the rest of your message.
Just got back from Singapore … not saying this will happen anywhere (after all they have over 5 million people on a tiny island).
1000sqft 3br/2ba – 30 min from the centre (nice unit in 500 unit apartment with pool). 1 million CAD.
A house with a 20×50 lot – starting at 10 million, or you can get a semi-d for 3-4 million. Nice houses often change hands for about 30-50m.
Want to drive? add an extra 80k and you get a permit to drive for 10 years … yep, only 7,000 per year to drive your car.
Glad to be back in ‘little Singapore’ Penang, Malaysia – only 250k for the same apartment in a prime location.
Can someone explain what this Remax guy is saying, please?
http://www.youtube.com/watch?v=OSGAWlLNs7Y
Herb, two houses sold in Woodbridge, house horny and a wife and family pressuring you to buy a house?
Tell your wife that you can still make the tomato sauce in a rented homes garage and with the 1mill+ in the bank why not take her for a trip to Italy for a while to get away from the ” foaming at the mouth for houses Italians” you must be surrounded by.
An update on the RE-101 gottahumpahoma virus.
Scientists suspect that ,unlike H1N1 which is carried in the bodily fluids of individuals, RE-101 may be suspended sucessfully in tomato sauce, remaining dormant. Insufficient boiling of those tomato jars may not kill off the virus, thereby infecting those who eat it.
Scientists currently looking at jarred BBQ peppers and malanzanie currently as well.
Oh people, people … poor Herb.
Yes renting makes financial sense but buying and having something that is theirs is what this couple wants.
I know this feeling very well as I just spent two long years looking to upgrade at a reasonable price (two years of searching because I don’t like to throw my hard earned money away to strangers). Had this one property that I finally found not come along, I think I would have remained in my current house and re-arranged my life to make it work (because, again, I don’t like to throw my money away for nothing).
Herb, you have several choices which will calm your and your wife’s restless house hunting nerves:
1. Find a nice rental in the city and buy a beautiful lakefront cottage that doesn’t cost nearly as much as those crappy bungalows in the city .. that you can fix up and call your own. Something that you can retire to on the weekends (even in the winter .. think gorgeous fireplace, snow shoeing, sunsets .. whatever). The city rental should be modern, streamlined and trouble free .. perhaps with a nice view (floor to ceiling windows ??) … something urban to contrast your getaway cottage which would have character and really define YOU. The cottage should be located, not in the boonies, but rather close to at least some amenities (a quaint village perhaps ? easy to get to in the winter) and you can consider it a place to retire to at the end of your careers when you no longer need to live in the city. Your dream getaway and your future full time dream house.
2. Rent a really nice place for a few years while waiting for the market to descend (again streamlined and trouble free, with a nice view .. something you don’t have to work to upkeep) and then take advantage of this hassle free situation to do some serious travelling. Go out and see the world. Take advantage of not having to take care of a house and go places and do things to distract yourself from the current housing market. If you cannot take long periods off from work, do weekends and be imaginative. Then when you are sick and tired of living it up, start to slowly look at the housing market again .. with fresh eyes.
3. Find new jobs in a location that doesn’t have a ridiculous housing market like Toronto or any of the larger cities. Mid size cities have beautiful properties that you can buy for a fraction of the cost of an urban one AND they have all of the amenities without all of the hassles. Of course this option would depend on many other factors but if you guys are so fed up that you are actually considering dropping a million bucks on a fixer upper that you don’t necessarily like (meaning you will have more to pay on top in order to fix it to your standards), then this might be an option for you.
DO NOT purchase a property unless you are absolutely IN LOVE with it. DO NOT let some idiot agent talk you into buying something by saying that you can fix it up to your own taste. Yes you can do this and as a matter of fact, this is what I am currently doing BUT the property I purchased has a breathtaking location and oodles of privacy and the fixing up is only cosmetic (although still costly). If you are in love with a property and the house simply needs some TLC, then OK but if you are buying a run down old heap in an area that you don’t like just for the sake of owning a home … WOW ! WAKE UP AND SMELL THE COFFEE .. not only will you regret it but you will not be able to get out without losing a lot of moolah in the process.
Herb, I feel for you because I also went through this period and was miserable for a while. I was angry at greedy sellers who thought they were selling the Taj Mahal when they were actually selling a house with problems just like any other. Snooty pretentious sellers who were not looking to sell their home and who needed to move but rather who were looking to make as much money as possible and were willing to wait in order to do so. However, don’t be stupid and play into their hands by paying a premium for simply beating 10 other couples to closing on a sale .. this is SOOOO STUPID !
Think before you leap and hang in there Herb. There is a house out there for you and you will find it very soon.
HHHW
I want a huge “forever house”! A liability that will require $1000+ of monthly cash flow shoveled into it (utilities, taxes, insurance, upkeep) forever.
Some words which should be banned:
– Forever house
– Investment condo
– Renting is throwing your money away
– Building equity.
Get a home and begin building equity! Ever hear of a TFSA? Shovel $500/mo into a TSFA. Even an 18yr old can do it. Tax free. No house required. Pure hard cold cash. Tax free.
Naw I’d rather pay a realtor, and two land transfer taxes, $20,000 to begin “building equity”. Plus 2500/yr property tax, yearly interest (rent to bank).
#62 What the hell is a Bic?
http://i.imgur.com/hSapB.png
Is there a chance: the mill will be divided up as follows.
100k to divorce lawyer
450k to him
450k to her?
Herb Herb Herb ….. what can we say? Some get it ….. most don’t. People are funny … they know the right thing to do …. then they go do the opposite. You’ve done the hard part (sold your stuff at a good time). Now friggin chill! Nothing is going to happen fast …. you are in the drivers seat. Watch and listen … there’s lots of time. Herb … if you buy a house in the next 12-18 months (any where in Canada) … you are the biggest f#cking loser on the planet. Tell your wife, sister, father and especially your agent to F-off! The worst case scenario is you have nearly a million cash sitting making you more money at a time when the world (and real estate) is in flux. 99% of Canada wishes they were in that position …. don’t give it up.
Dear Garth,
I’m a man with an over controlling wife who keeps my balls in the cupboard next to my estrogen patches, and we’re both complete morons. I’ve read your blog since initial inception, and we’re just now starting to realize you may have a little common sense with this whole market tanking theory. We own a beater home together and we know we’ve made a fair amount of equity. Also, we know the market is going to crumble. Should we sell or should we stay and wait for rates to rise? My wife cringes at the notion of renting because only filthy poppers would rent, getting a like-property for half the monthly layout. I am completely emasculated, and I do not want to lose my wife. What should I do?
*********************************************
I say first find your balls, draw a line in the sand, and stick to it. Otherwise, get a new wife already.
Check this out.
At 4.43 microsieverts per hour that is roughly 38.8 times the safe limit of radiation exposure per year which is one milliseivert per year. Don’t you all love that fukushima rain? How clicking hot is Canadian real estate? Quite likely too clicking hot to be worth anything.
http://www.youtube.com/watch?v=K4u14i6F6oE&feature
#78 Chris on 08.07.12 at 8:34 am
#62 What the hell is a Bic?
I was thinking PEN, not LIGHTER – easier to take notes with…
Garth, rumour has it that there will be a few ‘wise guys’ attending your speaking engagement here in T.O when it happens.
All these Italian builders and land speckers are going to ‘put the boots to ya’ just a bit. Your message is hurting their “operations”
Your blog has not gone unnoticed…LOL
I will relish the moment. — Garth
Garth, I REALLY like your blog (it’s like an eye opener for so many people) and that’s the reason I hope you are not adopting the “Super Motivational Speech About Real Estate” style in these talks in Vancouver and Toronto.
You know what I mean? Those talks like Steve Martel, Rich Dad Education, Trump University and many others… where we take advantage of low prices (after the crash), we get into the real estate business for positive cash flow rent (or any other sort of goal) and we get rich and we are smarter than the rest… etc etc etc.
A couple of days ago you said “Nobody will sell you anything”… please don’t sale trainings, please don’t sale your services, please don’t sell dreams. Keep it real man.
BTW I guess you are not going anywhere else, as people keep begging for other cities but you say nothing… (oh wait… this is familiar: the media preparing the masses with a hidden target in mind. Probably that’s the reason you only focus in Van and GTA in this blog… were you preparing the scenario ?)
I better stop writing …
Have a good one.
Herb. Go with Horny Housewife #72 option 1
Was in Orillia thsi weekend and visiting a buddy who has a place at Shopies Landing. We were at the pool area having some bears and atleased 6 people 50ish looking to buy drop by said hi and asked about the place. What they have in common nice cars . What they want to do, unload there re holdings in city in 5 or 10 years buy a place in orillia and aplace in Florida
This is the next trend its 5 Years away
Anyone know where to get a good deal on boat props, fk up. Who is this posable a rock in the middle of the lake between big chief and port orillia came out of the water and bit of a chuck of my prop
Herb, just do it man! Listen to your sister and your father. They surely can back up their point of view on rising prices with solid facts and arguments. Herb what are u doing in this blog man? Bidding war or nothing! Go and please your wife Herb. Buy the 1M fixer upper. By next year it will be worth 5M…. ask your father or sister, they’ll confirm it.
Be happy Herb!
#62TEMPLE on 08.07.12 at 6:47 am
Bring your Bics
What the hell is a Bic?
******************
Binoculars. Garth will have charts.
78Chris on 08.07.12 at 8:34 am
#62 What the hell is a Bic?
http://i.imgur.com/hSapB.png
*********************
Okaaay….what do I know? LOL
Or….it could mean:
Basic Interpersonal Communication Skills
@#52/Nostra… “Hundreds of tanks rolling thru Burbank”…
You don’t suppose that’s why that WascallyWarren bought himself a railroad, do ya?…
http://tinyurl.com/chhe9rh
The problem with Herb and many people in his situation are A)he has a wife that thinks that renting a home is bad, that “owning” is better B)he has relatives and friends that know he is renting and not owning C)all of the above people have no concept of investing, nor tax implications of doing so. See as Garth has esposed, what exactly does a home with say a supposed worth of $ 1 million do for a person? It don’t pay you anything, it just sits around and detriorates, and you have to pay property taxes and occupant costs. Conversely a $1 million invested in a basket of preferreds or ETF’s can throw off dividends and can be setup to avoid volitility. You can take the dividends, which are very tax advantageous compared to interest income, and live almost cost free in a home if you were to rent! Off course as above the people in his life are clueless to investing and also to tax implications. They just don’t have the knowlege or the understanding. All they have is the emotion and the belief that realestate in any form is good, as it goes up forever. That a home owned, is better than a home rented. That renting something you throw away money, and that owning you don’t. Well these people are going to experience very shortly what has occured in the US and in Spain, Ireland and most other western nations, that this does not hold true.
Were you at my wedding?
Re: (Disclosure: never short individual stocks. You are but one news release or takeover away from ruin. See: RONA’s recent takeover offer).
We all also remember Yahoo and the people who shorted that stock after they didn’t get bought out. I’m still short RONA and still say they’ll go bankrupt. No company on Earth Lowe’s et al could be stupid enough to buy a bankrupt company. As we saw Lowe’s stock plunged on the news of a possible takeover. Lowe’s obviously learned their lesson as did others that day.
Well, it’s nice to see a man at his daughter’s wedding getting ready to lead her down the aisle. Particularly when he still loves his wife enough to give her an affectionate squeeze.
Garth I’m sure some of us would like to see a video or two from your up coming “it’s a debt bubble stupid” appearances.
Any plans?…..
Hot Asian Money now sitting in Ponzi schemes?
http://www.reuters.com/article/2012/08/06/us-china-banks-idUSBRE87501T20120806
#86 Smoking Man on 08.07.12 at 9:36 am
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Drought conditions out there SM…lake likely down several feet than normal…
Garth, are you coming to London any time soon?
Herb,
It may just be a status thing on your wife’s part. If so the easiest fix is to buy a cheap house in the Maritimes for cash. Don’t spend more than $100,000 on it. You don’t need to live there. You just continue to rent in Woodbridge as you already planned.
This should satisfy your wife’s need to be able to tell her friends and relatives that she owns a house. In fact if you get a nice one with a couple of acres, she can be ahead on the bragging game. Plus it limits your potential RE losses to less than 10% of your net worth.
You can rent the house out if you like but if you don’t want the hassle, just close it up. Its purpose is to satisfy your wife’s RE itch, not to make money.
#62 Temple
BIC – Bic Lighter, for the power ballads during the presentation. Nowadays my generation uses cell phones. It’s less hazardous.
Election year DOW cycles. Next leg up in a few months? Interesting website…
http://www.seasonalcharts.com/zyklen_wahl_dowjones_election.html
#84 bigrider
Real Estate Goons.
Comin’ to get ya!
Haha.
Speaking of nobody escaping, does anyone think that THIS is going to have any effect on real estate values?
Been working and saving my whole life for million. Set for life gives a thousand a week so 52000. That’s 5.2% before taxes. Enjoy this not blow it on a house because your uninformed in laws say so.
#70 John… “Incongruent” – implying a straight line. You know, televisions come in colour now… You will find, John, that money does not exist; therefore, by using a weapon (that does not exist) against the very same Goldinmysacks people who wield it against you, what is accomplished is nothing in real terms. But you do need to eat, and you need to use their form of money to buy that same food from them, so your comments are hypocritical because you don’t understand the difference between the REAL economy and the fake one which they use to scare you with articles about the 100+ billion bank SECRET bailout in Canada. By definition, the central bankers are bailed out each and every day since their inception. You live in fear and it is blinding you…
Garth
Should I put a tent in from of the Marriot Hotel in Montreal waiting for your meeting here?
Please include Montreal in your trip, even if I must to ask the mayor to fix all the holes in the streets
http://www.telegraph.co.uk/finance/comment/jeremy-warner/9456634/Negative-interest-rates-spell-final-defeat-for-beleaguered-savers.html
No matter how much money Brits put into economy, it still simply blows.
Letter from Herb shows exactly how some smart people – and I believe Bart is smart one – gets lured
or pressured into something which obviously stinks to high heaven. I am a single guy, have close to 400K
in my bank and – please be seated as this is heartbreaking – I rent a place…When I talk to any new person
I meet in my life here in Vancouver they look at me with their eyes saying – oh my gosh, this guy is
a weirdo, stay away from him. Women gives you look saying – what a looser is this guy. Want start a new
relationship – first question some babe ask you – where do you have a house and then
you just hear how she is spitting on the way walking from you after hearing – o my gosh it is even
hard to write it – I rent a place. Well Herb – you are on the other side now. Get ready to be
mocked. But hey – who is laughing the last is laughing the most
“My wife is disgusted by the idea of renting when we could buy.”
Disgusted? Really? Why? I don’t get it. Sounds like a material girl.
This is what irks me. People with a million in cash and no idea of what is going. Probably made their money by accident just by owning a home and now think they are smart.
Dude. Buy the house. Lose 30% of your equity. You and your wife need a lesson in economics and this crash is the perfect course.
Garth,
You have to come to Victoria. People are truly delusional out here. Something about the fresh air, flowers and seaside vistas.
Garth….great picture of Bill and Hilary’s wedding….
http://comiterepubliquecanada.ca/Canada-s-Housing-Bubble-Blow-Out
Interesting read on the state of Canada’s banks and real estate which according to this author are only being together by previous .gov bailouts the promise of covering any future losses the banks my suffer when the real estate market drop. While I agree with Mr. Turners take on the real estate market I don’t see how the banks get away unscathed unless one is assuming never ending bailouts from the Canadian .gov. That would mean complete regulatory and political capture of all political parties by the banks and financial sector.
Please tell me there aren’t people that would sell out the Canadian public for their own personal gain?
Garth to make up for open disagreement in previous posts I (re) wrote you a catchy theme tune for your upcoming tour.
It is royalty-free, I think you should close every show with it ;)
kevsta remix 2012
Garth, why not start your tour in your own backyard? Seem the GTA is the most deluded place around. At least Vancouver is sobering up a bit now.
Hi Garth,
What time does this event run until.
Thx
9 pm. Nookie time. — Garth
#107 OnlyTheBankersLaugh
Canada’s economy is now pre-1940s, not 1980s.
The more the government spends, the more dire the outcome, and no Garth, the government cannot tax its way out of their debt. It would be socially unacceptable.
Where did I suggest that? — Garth
#98. Bottoms Up
Good point my GPS warns me when I’m heading for low water it missed this time. Good point
Herb, just lie to everyone. Rent a place, but tell people that you bought it. As long as your wife is on board, it’ll get everyone off your back. Then when RE tanks, you can pretend to suffer and hold it over them they they pressured you to buy – at which point pushy people like this say “you didn’t have to listen to me”. It’s no-win with people like these, so don’t even bother with them.
Then you buy at a lower price.
People don’t need to know your business.
So Garth, you’ve been 2 steps ahead of everyone regarding the crash. We all know it’s coming now. So could you start posting stories about how to mitigate the disaster, how to see opportunities when blood is on the street?
Not saying that I can’t do it myself, but it would be fun with your sense of writing.
Disciple wrote:
“by using a weapon (that does not exist) against the very same Goldinmysacks people who wield it against you, what is accomplished is nothing in real terms. But you do need to eat, and you need to use their form of money to buy that same food from them, so your comments are hypocritical ….”
—–
Yeah I know. Super cynical. So they are your north top to bottom? Flesh that out more.
#84 Garth to Bigrider on ‘wise guys”- ” I will relish the moment”
No, you will bleed from every orifice and feed from a straw. LOL
Looking forward to hearing you speak when youre here.
Maybe we get a few RE agent hecklers in the audience as well.
Garth, how soon do you speak in TORONTO?
Soon. Details in a couple of weeks. — Garth
#119 24 yr old:
“So Garth, you’ve been 2 steps ahead of everyone regarding the crash.”
—–
Easy with the flattery there. There are other smart people whose intelligence you are insulting. The people who you know don’t constitute “everybody,” neither do the things you know amount to “everything.”
Another gracious remark from the tadpole. — Garth
71 Daniel
I came across this article:
Singaporeans who do not have a flat of their own; thus are not eager to have more children.
..”In the 1970s the Singaporean government encouraged women, especially uneducated women, to get sterilised following their second child”
http://en.wikipedia.org/wiki/Population_control_in_Singapore
Why monetary incentives alone won’t raise Singapore’s birth rate
feb 2010
“The more immigrants the ruling party imports into Singapore, the lower the pay of ordinary Singapore citizens. And the higher cost of living for Singaporeans will have an end result of a lower birth rate.
http://www.propertyguru.com.sg/property-management-news/2010/2/27192/why-monetary-incentives-alone-won-t-raise-singapor
I hope Herb reads this…….
my parents bought a house in the 905 just north of toronto 9 years ago for $735,000 Mortgage free. The driveway needed to be done, the shingles were peeling back badly, the windows on the rear of the house needed replacement and the flagstone walkways were cracked and falling apart. They decided to sell mainly because they felt this is the top of the market and for the $150,000 they would have to sink into it for repairs. They just closed 1.5 months ago for 1.4 Mill. Both parents are in their late 50’s with a few years left of work till the retire. They are now renting a house for 1 year with a second year option for $1600 per month, brand new detach 1800 square feet in the same town. They are loving the freedom, property tax on the old house was $7500 per month. $1600 a month rent with being able to claim on their income during a very uncertin time in the economy to me sounds like an incredible move. Tell your wife what time it is and show her who wears the pants. My parents have made good investments choices over the years, houses are no different. Treat your house like a stock, when its high you sell. Get out and watch the market crash.
i meant $7500/year*
–
#70 John — “I know the “bank always wins”…but it still requires the same paradigm for those who cash out fake equity to continue to get “paid”.”
Afternoon John. There are posters (supplied below) who have said in far better terms what I could, or what I (like Garth and others) am pointing out.
Bear in mind that the feds. and CRA make the rules up as they go along, and we have to live with those rules. As Garth has previously pointed out, Canada is one of the most generous countries in the world when it comes to giving tax breaks.
Therefore, it is incumbent upon us, as individuals, to take full advantage of these breaks, thus becoming less dependent on the feds., provincial and municipal govts. for handouts / bailouts.
Main thing is when the correction is in full swing, to be self-dependent, to have spare cash available to help ourselves and others, unlike the Europeans who have become totally dependent on their govts. to bail them out. Consequently, countries need to be bailed out as well. The ultra-rich are already profiting nicely from others’ misery.
Rather then me being dependent on, and therefore a burden / slave to the various levels of govt. here, it is better for me to take full responsibility for myself, as I was the one who caused my present physical infirmities. No one else did.
I used my own freedom of choice to live the first part of my life in accord with the choices I made and now I must live with the effects (partly blind in both eyes, paralyzed down the right side).
So if opportunities present themselves, as they always will, I have already figured out what I would do. On the other hand, because my physical body is deteriorating, one day I won’t be here. Could be a heart attack, brain hemm., whatever.
If my better half moves on ahead of me, the last thing I want is to own a nice, fully paid-for home. Unlike said iinvestments, which pay me to own them, I have to pay ongoing maintenance to keep it in fairly respectable condition.
I would much rather use the income from the investments to live in a retirement complex, and turn the home over to young people who are better able to look after it.
But there is no doubt I have had a terrific life, and when my number is called, I won’t have any trouble leaving my clay temple behind, and moving on into the next worlds.
Here are the posters:
#53 So sad — “And sitting on a pile of cash is soooo comfortable.”
#57 Coho — “This is a good example of how people are conditioned and programmed to act and think in ways to fuel these manufactured boom and bust ‘cycles’, [which are designed to leave average people with net losses while the few insiders laugh it up smoking Cubans and sipping brandy as they rake in the money.”]
#60 Last (bene a while) — “WOW I am sooo glad my wife and I are cured of this!!! I much prefer having my dividends paying my rent, my landlord paying the bills!!!!”
#67 Steven Rowlandson — “It takes ten pounds of weapons grade material to make a fission bomb like what destroyed Hiroshima.” — That’s another reason why many of us may finish down here sooner rather than later.
#74 bigrider — “Scientists suspect that ,unlike H1N1 which is carried in the bodily fluids of individuals, RE-101 may be suspended sucessfully in tomato sauce, remaining dormant.” — Is this a levitation-style home-made tomato sauce, or store bought varieties? If so, which stores?!
#91 Nemesis — “You don’t suppose that’s why that WascallyWarren bought himself a railroad, do ya?…” — Exc. point, ‘tho I can’t figure out why he would do that. He, Bill and Melinda Gates, Ted Turner and others are already on the depop. side, so why don’t they just eliminate themselves, and let us get on with life? It sure would make things really interesting, esp. if they take all the politicos and lobbyists with them!
Hi Garth,
would I be wrong to say kitchener/Waterloo is in for a big crash here in Ontario? lots of nice people in denial? I have tried to lead them to your blog” but they still say its different here and we will benefit from being just an hour from Toronto! Now I just keep my thoughts to myself and keep reading your blog.
“white horse prophecy?
Exclusive: Brigham Young’s Great-Great-Granddaughter on Mormonism and Mitt Romney
Aug 7, 2012 4:45 AM EDT
is now president of the Exmormon Foundation, which was organized to give support and understanding to those who leave Mormonism. In an exclusive interview with The Daily Beast, Emmett, who rarely speaks to the media, talks about what life is like in the church, why she left, and what she thinks motivates Mitt Romney to want to be president.
http://www.thedailybeast.com/articles/2012/08/07/exclusive-brigham-young-s-great-great-granddaughter-on-mormonism-and-mitt-romney.html
http://www.thestar.com/business/article/1238289–toronto-s-housing-market-cools-following-flaherty-s-tougher-lending-rules
Canadian Finance Minister Jim Flaherty is making progress in his effort to cool Toronto’s overheated condo market with tougher mortgage lending rules.
Condo sales dropped 10 per cent in July from a year earlier to 1,753 units, and the average price fell 1 per cent to $328,216, the city’s real estate board said Aug. 3. Prices have fallen 11 per cent since February, according to Bloomberg calculations using Toronto Real Estate Board figures, and were little changed in July from a year earlier, ending annual price gains that peaked at 22 per cent in October.
“We have hit the peak in the new condo market; we are on the downside of the roller coaster,” Ben Myers, executive vice-president of Urbanation, which tracks Toronto’s highrise condominium market, said in a phone interview. “We will really have to see how the developers react to a little bit of the slowing in the market, if they hold off on new launches.”
”The heavenly granite reward will come.”
is this also known as a gravestone?
Ok, XIU.TO gapped up, touching the Daily 200 SMA. I’ll need more convincing than this move is providing.
#107 OnlyTheBankersLaugh
Savers should “stop moaning and start spending”.
http://www.telegraph.co.uk/finance/personalfinance/savings/8028884/Savers-told-to-stop-moaning-and-start-spending.html
Message hasn’t changed.
Where did I suggest that? — Garth
Actually, you’ve suggested that is what the U.S. are capable of doing on a number of occasions. Whether U.S. Canada or Timbuktu. There isn’t a industrialized nation right now capable of pulling it off.
#116Canadian Watchdog
What exactly caused the spike in 1971 taxes?
Francine McKenna, Contributor
Deloitte and Standard Chartered Bank: In Service To Profit Above All
http://www.forbes.com/sites/francinemckenna/2012/08/07/deloitte-and-standard-chartered-bank-in-service-to-profit-above-all/
#109 Idiots r plenty said ,
“This is what irks me. People with a million in cash and no idea of what is going. Probably made their money by accident just by owning a home and now think they are smart.”
Gov policies have ruined a generation or two by allowing this RE to form. THIS HAS ALLOWED FOR THE MIS-ALLOCATION OF INTELLECTUAL RESOURCES. The Young will chase Ponzi schemes that Boomers have initiated. Why get an education and become productive when you can just jump on a Ponzi bandwagon??
in last post, insert the word, “bubble” after RE. ;)
I want to be one that skates through this unscathed and seizes the looming opportunities.
People LOVE owning real estate – telling them not to buy it is like telling newlyweds not to have sex, Texans not to eat meat, kids not to go outside when it’s sunny! I’ll consider renting when I’m an empty nester. I like our house but can’t wait to buy something else in the near future! A new family home, a rental property, a cottage…we’ll see how the market unfolds.
#108 Jojo: “When I talk to any new person
I meet in my life here in Vancouver they look at me with their eyes saying – oh my gosh, this guy is
a weirdo, stay away from him…”
********************
Well, I spent my twenties working in downtown Vancouver in the sixties…and it was NEVER that way then. We didn’t give accommodations a second thought. No one cared. Todays’ modern woman must be very materialistic…very sad.
To Nostradamos Le Mad Vlad:
I really respect what you wrote, and what most comes across is that you are a real gentleman…in the best sense of that word.
These are tough times ‘to not own a single stock’…..every bank share has increased at least 5% this year and pays a 5% dividend……preferreds suck….etf’s are just saying you have no idea of how a market works.
A stealth rally in some sectors has made this summer a very profitable time……by the time ‘the public’ cottons on the smart money will be a sellin….yeehah…..no wonder I get to winter in paradise…..theres so many layers of fool in this country……….
#115NAM not HAM on 08.07.12 at 2:51 pm
I heard a late night adults-only show encore is is planned.
Named: greatertool.com
(Will this make it to print…).
General dress code at all events is a Canadian Tuxedo. google it..
I’ve talked to too many single women friends — widowed/divorced, it doesn’t matter — who confide now that they are using HELOCs and Reverse Mortgages just to make ends meet.
These are scary times….
Thank you, Garth, for keeping us enlightened!
And I continue to learn. Today I learned what BICs means! LOL You do this on purpose, don’t you?
#94Tony on 08.07.12 at 11:07 am
While you are waiting why not write some puts for income. Or CYA and buy calls also, for a costless collar. Hedging is the name of the game.
–
Parallel Currencies and Parallel Universes One exists, the other doesn’t; China – US “Of course, if the US can provoke war with China, then they don;’t have to pay back all that money they borrowed, or at least that is the theory in DC!” wrh.com, but what if China cashes in on all their IOUs in one go next month? China “China manufactures products. Wall Street manufactures debt.” wrh.com; S&P above 1400 “The FED telegraphs to the banks its endless string of broken promises of market intervention is coming to an end.”; 5:03 clip “Remember how Bank of America (and Bank of New York/Mellon and MERSCORP) were in hot water with Lorayne Souders because of Michele Sjolander rob-stamping and apparently lying about when they received her lawsuit as they tried to remove the case to Federal Court? You thought it couldn’t get any worse, right?”; Walmart selling GMO corn; US Mint Buy silver — better value; 58:09 documentary Credit cards, if paid in full monthly, are nice to have; Boosting Gas Prices How convenient was the fire in the California refinery? MGM Resorts Bad case of tje blues; Kill Bill III Is now the time? The CFTC hasn’t dropped its silver manipulation investigation; One Pound But you have to live iin the house; Obomba Pro-union?
*
5:57 clip Wisconsin shooting. It appears forewarned is forearmed, and Nemesis Never mind Burbank, Anaheirm or California. ‘Owzaboud Wisconsin? As events happen in threes, 2:33 clip James Holmes; Potbelly Globalists “World population needs to be decreased by 50%” — Dr. Henry Kissinger. Then by all means, let’s start with all you ego-driven, narcisstic whackjobs. The rest of us can look after ourselves quite nicely! Ginger could handle diabetes; GoDaddy Not worth using; Bohemian Grove All the latest who’s there, etc. and Two Faces of a police state; CC = Death of Democracy Incl. carbon taxes; GMO free for all Bankrolled by biotech giants; Obomba angry? Too bad.
Sorry, G. Of course, you the smartest, the rightest, the tallest, the nicest.
fuuuuuurrrrrrrrrrrrrrrst
Okay, knit-picking, but what else to do on a warm, muggy afternoon. Re#43, it is Ontario has 1/3 OF the people, not 1/3 fewer people. #48, take a “not” and guess where it goes in the wife-statement. #49, the talk ends when Garth runs out of breath or words, whichever is first.
What are radioactive houses and land worth?
#152 Steven Rowlandson on 08.08.12 at 9:49 am wrote:
What are radioactive houses and land worth?
Well, in Aberdeen where the older houses are radioactive because they’re made of granite and the unventilated basements fill up with radon gas, a three bedroom house will set you back about £229,000 ($357,000) on average.