The edible market

“Market sentiment is now working to reverse the gains in home prices. For sellers who have to sell, the only way out is to cut prices… not just 5%, a much deeper cut of 10% to 15% is required.”

When was the last time you heard a realtor say such things? If you’re under the age of thirty, probably never. At least you weren’t listening closely two decades ago as you sucked on your Care Bear or drooled over a Cabbage Patch Doll. But there it is, in realtor Jimmy Wong’s latest report to his suburban Vancouver clients, where the national housing correction is playing out in microcosm.

The numbers speak for themselves. Last month there were about 1,200 houses for sale in Richmond, at an average price of $1,125,000. Of all those, only 60 sold, which means a seller might have to wait a year and a half to find a buyer – unless she takes Jimmy’s advice and guts the price.

This week the Canadian Real Estate Association swallowed hard and admitted all those rosy projections were bunk. Sales across the country have just fallen about 6%, the largest monthly decline in two years. In BC they crashed 25%. In Vancouver the melt was 31%. In Toronto, sales are running 12.5% behind this time last year. In Saskatoon, they came in 12% lower.

The crumble in buyer demand is now a fact of life, spreading into every major market. Realtors are universally blaming F and his squishing of the 30-year mortgage. The consequences of this action are about what I told you they’d be six months ago. By dropping the maximum amortization to 25 years the feds managed to raise interest rates by 1% without actually touching them. Suddenly buyers faced higher monthlies, and started falling by the wayside. This should terrify every Re/Max agent in the land.

“The broadly based decline in August sales activity suggests that some buyers may no longer qualify for a mortgage now that that amortization periods for high ratio mortgages have been shortened,” CREA’s chief economist Gregory Klump said, stating the painfully obvious. “As the linchpin of the housing market, lower first-time buying activity will have downstream effects over the rest of the market.”

To translate this into crayon, real estate values have been so inflated by house lust and crack cocaine mortgage money that any event will bring big consequences. The first is a sales disaster. The second is a price plunge. And this is just round one. Yet to show up in the stats is the effect of cash-back mortgages being eliminated and higher income standards for borrowers.

Already offshore buyers have retreated with their tails tucked as the banks refuse to give equity loans. No more money based on fat downpayments, instead of Canadian income. And this banking change is about to bite a lot of Boomers in the ass. These are folks with all their net worth in real estate who think they can sell the Mississauga house for $600,000, bank $400,000 for retirement and buy a modest home in Guelph with a nice little $250,000 mortgage costing just $1,100 a month, paid for with investment earnings. Think again. The banks now want employment earnings. No job? Tough. Buy the place with cash.

In short, there are a spate of negatives about to befall housing. The big slump in BC (which will be the focus of the CBC’s National on Thursday night, I hear) is the warm-up act for places like Winnipeg, Ottawa and Edmonton, as well as most of the GTA and poor Montreal.

If real estate industry apologists are right, and this current dive’s the result of just one of these factors, this pathetic blog was right. The housing market’s hooped. The inherent fragility is staggering, with prices floating on nothing but debt and horniness. When a mess of buyers are no longer able to buy, the entire structure risks collapse. I hope the parallels to the US real estate disaster are becoming clearer to everyone.

What next?

As Capital Economics’ David Madani puts it: “Assuming that sales continue to trend lower over the remainder of this year, then the typical lag relationship between sales and prices indicates that house prices will eventually follow suit early next year.”

Precisely. This is not the housing correction all the green-tinged, musty, blinking, faintly damp basement-dwelling losers who come to this site have been pining for. It’s mere foreplay, with far more serious nookie to come. Sales declines will continue, with prices trending lower by November, paving the way for a 2013 full of surprises.

If you’re a realtor, return the S-class to the dealership. Now. Then call your mom and ask for your room back. If you’re a homeowner thinking about selling, sell. It only gets worse. And if you’ve been reading my drivel waiting for a signal to epic vultch, keep it zipped. We’re not there yet.

But I think I know when that will be.

Garth Turner Live in Toronto

A real estate timetable for the next four years will be part of my presentation next month. Will we see the best buyer’s market since the crash of the early Nineties? How long will the opportunity last? And if housing’s turning into a dangerous and vengeful asset class, where’s money safe if you’re a young couple, or a Boomer facing retirement?

I’ll be hosting a public event on the evening of Tuesday October 23rd. It’s free but I need a new Hummer so feel free to bring your used gold coins. Attendance is strictly limited, so to reserve a seat or two, click this:

Garth Turner Live in Toronto — Event Sign-Up Form

191 comments ↓

#1 Cheryl on 09.17.12 at 10:10 pm

For those of us who live far away, I hope you provide answers to those questions in one of your posts

#2 Claudius Emperor on 09.17.12 at 10:11 pm

will see you on 23rd

#3 Frank on 09.17.12 at 10:12 pm

Where in Toronto?

#4 Kenken on 09.17.12 at 10:15 pm

And what if the Bank of Canada cuts interest rates?

Zero chance. — Garth

#5 John in Mtl on 09.17.12 at 10:16 pm

This planned turn of events might be good reason to invest in REIT’s:

“The largest transfer of wealth from the public to private sector is about to begin. The (US) federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors — vulture funds.

These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value. ”

“… I am not currently aware of any way for retail investors to participate in this process. It is probable, however, that once the privatization has occurred and the properties are generating rental income for the investors, the initial investors will cash out by forming real estate investment trusts (REITs), real estate operating companies (REOCs) or limited partnerships (LPs) that will be made available to retail investors. ”

Source: http://www.thestreet.com/story/11224917/a-huge-housing-bargain–but-not-for-you.html

I wonder if the same thing will happen here in a few years…

John

#6 Not on the boat. on 09.17.12 at 10:16 pm

I hope this movie is good, the reviews are killer!!

#7 stage1dave on 09.17.12 at 10:18 pm

“kick things off by filling out the form below” ? Wow, never seen that before…

However, it appears I nailed a bunch of 71 CFL cards (PSA 8!) I’ve been chasin’ in GA the last couple days; but still waiting for a reply back so thought I’d check in…

I agree with everything that was said above, btw…when are you gracing Edmonton with your presence?

#8 Boomer21 on 09.17.12 at 10:18 pm

Garth, I signed up last night when it showed Vancouver details, I am thinking I don’t need to repeat as I received a confirmation, right?

Right. You’re in. — Garth

#9 DM in C on 09.17.12 at 10:20 pm

Oh but not in Calgary. It’s truly different here.

“While Canada’s resale housing market was showing signs of a correction in August, Calgary’s real estate story was telling another tale.”

http://www.calgaryherald.com/business/Calgary+resale+housing+activity+tops+major+Canadian+markets/7253122/story.html

#10 me on 09.17.12 at 10:20 pm

Furst.me

#11 wwwStratege on 09.17.12 at 10:20 pm

We want you in Quebec City, you know these things won’t happen here. Nous sommes tellement différents.

#12 WorriedinHalifax on 09.17.12 at 10:21 pm

What do you think will happen to Atlantic Canada (Halifax, in particular)?

#13 Steady Eddie on 09.17.12 at 10:21 pm

Thanks for the free event, but I’ll keep my gold.

Garth, what do you think about farmland? It is also in a bubble. I think in SE ontario the prices are about $10K/acre it’s insane. Debt levels for farmers are 16:1 and compared to American farms who are 5:1. It’s going to be interesting how that plays out as well… I suspect there will be a lot of country properties for sale too, maybe not major cash crop properties but definitely hobby farms and such.

Cheers!

#14 me on 09.17.12 at 10:21 pm

Darn 9th

#15 Boombust on 09.17.12 at 10:22 pm

I think the meme IS beginning to change here on the Wet Coast, Garth…oh, and Randy says “Hi”, too.

#16 Claudius Emperor on 09.17.12 at 10:22 pm

what will happen with the canadian dollar?

#17 me on 09.17.12 at 10:23 pm

Darn 14th

#18 Smoking Man on 09.17.12 at 10:25 pm

You need a bigger hall now that the world knows SM will show.

#19 Grim Reaper/Crypt Speculator on 09.17.12 at 10:33 pm

I am getting this weird vibe by my solar powered Ouija Board that Garth has some insider info.

=====================================

PS Smokinky Man. While you were passed out (redundant) we imbedded a Hi Tech device in your #$%^& _____ that tracks you and your thoughts.

You scare us dude….

#20 vatoDETH on 09.17.12 at 10:33 pm

Bang On Garth! But what do you have to say about the last bastion of Calgary? Apparently prices rose last month!

http://findcalgary.files.wordpress.com/2012/09/sales.jpg

Egad!

#21 White Rock Mom on 09.17.12 at 10:35 pm

Patiently Waiting can you provide some listings info on Elgin and Morgan Creek?

#22 Realtors are in an all out panic on 09.17.12 at 10:37 pm

It’s going to be a nasty crash realtors a nasty crash.

#23 Big Al New on 09.17.12 at 10:37 pm

October 23, I’m going to be out in the Atlantic taking a boat down to Florida from Boston. Tape it for me?

#24 Tri-State Pat on 09.17.12 at 10:38 pm

Mr. Turner,

Will there be a video made of your public event in Toronto? If so, would it be made available for viewing at a later date?

Also thanks for including Montreal in your discussion today; real estate there is as toxic there as the other delusional markets in the rest of the country.

#25 guido on 09.17.12 at 10:38 pm

what land are you living in Garth i live in Toronto i haven,t seen any price declines business is booming more construction than ever maybe your living in bizarro world ?

#26 vanisdifferent on 09.17.12 at 10:40 pm

http://www.dcmarketingstrategies.ca/MarketTrends.ubr

#27 JSS on 09.17.12 at 10:40 pm

Garth – any chance you’ll come to Edmonton? Me, my wife and her boyfriend want to come hear you.

#28 NFN_NLN on 09.17.12 at 10:45 pm

Will we see the best buyer’s market since the crash of the early Nineties?

We have to wait a whole month for the answer???

#29 Paully on 09.17.12 at 10:50 pm

Since the USA is so much further ahead of Canada on the RE curve, does anyone have any thoughts on investing in “VNQ,” the Vanguard US REIT ETF? It is supposed to track the MCSI US REIT Index. It strikes me that it should do better than the equivalent Canadian REIT ETF, at least in the short to mid-term.

#30 T.O. Bubble Boy on 09.17.12 at 10:50 pm

Funny how the RE industry pretends that the entire history of mortgage regulations somehow started in 2006 — when F and Harper created “Phase 1” of the bubble with 0 down 40-yr mortgages, before “Phase 2” (starting with the financial crisis of 2008-2009) with rock-bottom rates and lax lending standards led us to where we are now.

How did any houses ever sell in this insane environment with only 25-yr mortgages!?!?! Were there any houses that sold before 2006?

#31 Alpha Bravo on 09.17.12 at 10:55 pm

#12 WorriedinHalifax
What do you think will happen to Atlantic Canada (Halifax, in particular)?

——————————-

Halifax will be dragged into the North Atlantic Ocean by an unprovoked and merciless Kraken attack!

#32 Mark W on 09.17.12 at 10:57 pm

If homes sell at fire sale prices don’t real estate agents continue to make money in an up and a down market?

The sellers motivation for selling is not their direct concern since they work on commission.

Homes flood the market = homes sell at fire sale prices = real estate agents sell even more homes = real estate agents make even more money.

I am not a real estate agent but it just seems the market is rigged both ways.

#33 Dr. WAYNE on 09.17.12 at 11:00 pm

#10 me on 09.17.12 at 10:20 pm ,,, Furst.me

You’re an a$$hole …

#34 Onemorething on 09.17.12 at 11:01 pm

Been away a while as moved my family down to Singapore from Kuala Lumpur. Singapore which has been seriously unaffordable, creeping up to Hong Kong levels for housing is showing signs of reversing.

Singapore, like HK relies on strong tourism and retail. My retail friends are buying (from China) half the orders they would normally now.

Back in KL you know the Property market is doomed to correct when undesirable areas look to Groupon to help. Only in Malaysia!

[85% Off] The Peak Realty: RM3,000 for RM20,000 Cash Voucher Valid for Property Down Payments at Villa @ West KL

http://www.groupon.my/deals/klang-valley-kuala-lumpur/villa-west-kl/716354668?nlp=&CID=MY_CRM_1_0_0_262&a=715827975

#35 Robert on 09.17.12 at 11:12 pm

All this attention on Vancouver and Toronto!!! Anyone who thinks that areas like Kelowna, Vernon, Salmon Arm and Kamloops will not feel the pain as much is in for a very good lesson.. It’s called no buyers and no jobs or at least no well paying jobs. IMO these smaller centres will feel every bit of the pain that Vancouver and Toronto will feel.

#36 Click Here, its different on 09.17.12 at 11:18 pm

Hi M. Turner …

I would like to know what you think about QE3 in the states, if you ever have a post in your drawers on the subject.

Also, thx for your post “Hope” last week. When I read it, I felt it could be the very best text to read on the internet on that evening.

#37 Saskatoon-Living on 09.17.12 at 11:20 pm

Appreciate the S’toon mention Garth. I almost pissed myself after reading that paragraph. Could you post that 4yr timetable after your Toronto event? Thanks Garth!

#38 VicBC on 09.17.12 at 11:22 pm

Re #32 Mark W

Which would you rather make 6% of a million or 6% of 1/2 a million

#39 Mithan on 09.17.12 at 11:23 pm

Hopefully you can post those answers Garth, though I imagine you will say the buyers market will be in 2015, after the bull trap hits people in 2014…

As for Calgary and Regina, I expect them to follow Vancouver and Toronto by a good 12-18 months, maybe longer.

Still, it’s hard to live in Regina and see all my friends buying condos and houses and not jump in.

I presume your advice for Regina is to wait for a few more years Garth?

#40 Dude from Richmond on 09.17.12 at 11:23 pm

Richmond sales are down 38%, prices are plummeting.
Asian investors are retreating en masse.
Move to higher ground, before the Tsunami hits.

#41 patiently Waiting on 09.17.12 at 11:24 pm

#21 White Rock Mom – here’s aspecial one just for you. Originally list price was $1,639,000 now Listed at $1,459,000. But the best part is . . . and you didn’t hear this from me . . . there are 2 registerred mortgages on the property total mortgage debt registered is wopping $1,535,000.

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1221096768&s=BRC&t=BRC

I’ll see what else I can find and post later.
Cheers
PW

#42 The edible market | The Retiring Boomer™ on 09.17.12 at 11:26 pm

[…] As published in The Greater Fool […]

#43 mr-b on 09.17.12 at 11:35 pm

My little village saw one sale this year. The owner bought it in 07 or 08 for $100k. Had it listed for over 3 years, finally sold for $50k.

Nothing else has moved for a year. Nothing will. I bought my little bungalow for $75k in 05. Now people want $249k for the same thing. Not gonna happen.

Long past ugly here in the boonies.

#44 dutch4505 on 09.17.12 at 11:38 pm

Wondering what the bottom will be in the lower mainland of BC?? It will be just like the USA. I live in WA state and commute to BC for work. (One of the benefits of being a dual citizen) My real estate holdings in WA state have fallen to 2002 or 2003 price levels. The high point of the bell curve in 2006 has now levelled off to 2002/2003 prices. So my friends in BC…check your assessment notice from 2002. That will be your new value. Hopefully your mortgage and HELOC is below that value. All the best.

#45 Patiently Waiting on 09.17.12 at 11:38 pm

#21 White Rock Mom, here are a few more in a variety of price ranges. Note: 3489 Canterbury PL. This is another one of those highly leveraged ones with 2 registered mortgages on title. Total mortgage debt registered is $1,478,500. More than what she actually bought it for . . . ouch . . .

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1080135533&s=BRC&t=BRC

PW

#46 Investx on 09.17.12 at 11:42 pm

Where in Toronto is it being held?

#47 Crash Calaway on 09.17.12 at 11:47 pm

After F and his cronies rig the invitations to get everybody into the house, they pull the rug out.
Isn’t it great when govt creates schemes for simpletons to dive into.
Home owners are going to lose their shirt.

#48 Mark W on 09.17.12 at 11:47 pm

How about 6% if half a million if my sales go up 300%.

Ref #32 & #38 above.

#49 Crash Calaway on 09.17.12 at 11:48 pm

“You’re richer than you think”

#50 Canadian Watchdog on 09.17.12 at 11:51 pm

This is how Garth pictures metalheads.

Nevada recluse dies with $200 in bank, $7 million in gold at home.
http://www.latimes.com/news/nation/nationnow/la-na-nn-carson-city-gold-20120917,0,5763811.story

“He was a hoarder – there was everything inside that home you could think of,” Glover said. “The workers found a crawl space from the garage. That led to everything else.

#51 Two-thirds on 09.17.12 at 11:54 pm

Meanwhile, in Edmonton, the obfuscation by the RE board is ruffling feathers even among their flock:

“It’s a messy family feud that has spilled into the open, leaving everyone ducking for cover.

In one corner, the usually buttoned-down Realtors Association of Edmonton (RAE), the body that represents 3,200 licensed real-estate brokers and associates in the capital region. In the other, a vocal band of several dozen dissident members, some of whom are spitting mad about a plan – already approved by the Realtors’ board, over the objections of its own internal committees – to change the way local homes sales data are disclosed publicly.

Angry brokers say the new reporting scheme, set to launch in December, would stifle access to timely sales information, keeping them and their clients in the dark.

In particular, they argue, the revamped system would block homebuyers, sellers, appraisers and Realtors themselves from getting timely access to relevant sales data until the deals close – sometimes months after a purchase agreement is reached.

That’s a big change from the current system under which buyers, sellers and their advisers are able to obtain current data for all properties listed on the MLS (Multiple Listing Service) that have been sold unconditionally.

That real-time data serves as a key guide for both buyers and sellers, brokers say, fostering an open and transparent market so owners can establish appropriate list prices for their homes while buyers can place fair bids and negotiate reasonable deals.

Under terms of the new policy – believed to be the first of its kind in a major metro market in Canada, and the second in Alberta – only those whose firms are directly involved in pending deals would have immediate access to unconditional sales prices for their firms’ properties.”

Full article available at:

http://www.edmontonjournal.com/business/Realtors+association+house+divided+over+pricing+disclosure/7241052/story.html

Why change disclosure rules on true selling prices? Why now? What do the board knows that the rest of the market participants don’t?

We will find out sooner or later.

#52 Nostradamus Le Mad Vlad on 09.18.12 at 12:15 am


BPOE and Mikey the Realtor — in Bob Dylan’s words, “How Does It Feel?”

Everything that goes up must come down. Safety and security? In yer dreams! Nice post.
*
#102 Victoria Tea Party — Thanks for the response. It’s still same shit different day, except the verbal diarrhea is more intense.

What is most interesting is if China and Japan throw pansies at one another. The US will side with Japan, leaving them a little stretched.

Ohdearwotapitynottooworrynevermind, a.k.a. horsefeathers. Cheers!
*
Diamonds Are For Russia If they ever bring them up, that would dampen world prices, and further; China The entire charade could be faked to bankrupt the US for when the cycle change is complete (around 2025); QE3 Living standards falling; Duped-A-Thon “But, amidst the rallies in the stock markets, the true story is elsewhere: the dollar index.”; MEast chaos Benny’s funny-money printing goes unnoticed; 59:08 doc. Hay baybz, the party’s over; 1:23 clip Kevin Warsh (former Fed Chief) says Bernanke went all in; Buddy, can you spare a quadrillion or two?
The Euro and the EU Germany doesn’t care for either. Would be curious if The Dragon (China) and The Fourth Reich (Germany) ended up running this two-bit planet; Lowe’s Parking Lot Is the US economy really that bad? Mechanics Two hundred pounds an hour?

US Fed Well, who is creating all the uncertainty by virtue of their policies? High Oil Prices squeezing profits; Japan – China Plants close in China; German banks Safe haven; Factory Slowdown Temporarily; Nigel Farage has an awful lotta moxie about him; Gold and Morgan Stanley; Muni Bankruptcy map; Boomers everywhere Four major expenses.
*
Fire Tornado in Alice Springs, Oz (pix in); Mosquito? No. Drone; Small Arms treaty passes “The Rothschild Zionist network at ABC, NBC, CBS, CNN, FOX and MSNBC were busy following theProtocol 12; Control the Press to the point that even newspapers didn’t report the event on the last page.”; Undersea bases? Smart Meters Nevada Energy has a new spin on things (Agenda 21); WH demands military prisons for US citizens under NDAA; China Gang of twelve; Antarctica’s doing well. It’s the bozos who say it isn’t, and Green Energy? Green vomit more likely; Apple Granted patent for kill switch; Syria – Lebanon “Why would Syria do something that stupid? And how do we know these are not Israeli planes with Syrian markings?” wrh.com; China – Japan “China has begun selling its oil in yuans, rather than in dollars. . . . the US military is actually preparing for a war against China, which currently holds the largest reserve of US treasuries at this time in history. The US cannot possibly repay this debt, given the US budget deficit.” wrh.com; Oromneyba Individuals should be loyal to themselves, not to politicos; Eclipse but nnnnot in the way it normally happens; Morris the Cat? No, Bob; Dragonfly Diamonds or morning dew; Inside the B-747 which carries space shuttles; McNoodles Next big thing?

#53 city slicker on 09.18.12 at 12:23 am

Sherry copper was just on bnn saying debt levels are not as high in canada as usa cause its measured differently. Garth?

#54 Cowpie on 09.18.12 at 12:26 am

The edible cowpie…as published in The Greater Fool…

PS: me, i still luv u. fourty-thuuuuuuuuuuurdddddd!

#55 james on 09.18.12 at 12:27 am

hope you are coming to cowtown to share this. no sense keeping all that knowledge locked up in TO

#56 PoorgEoisie on 09.18.12 at 12:38 am

Mark W you are totally right, you should become a realtor. Don’t listen to the idiots as everyone knows when prices go down sales numbers go up 300% and that increase in sales drives the price further down until the cost of a house is a dollar at which point all realtors will only make 10 cents a sale but big deal because their sales numbers will go up a million billion percent.

#57 Bought a place in the US, just like Garth suggested. on 09.18.12 at 12:41 am

On the emotional cycle of real estate where do the readers and yourself Garth, think the current real estate market is for Canada. Then where do they think it is for the US. Just looking for input.

http://www.bigfatpurse.com/wp-content/uploads/cycle-of-market-emotions.jpg

#58 tedfiftyfour on 09.18.12 at 12:53 am

“This should terrify every Re/Max agent in the land”
Why only Re/max agents. What about the others. Are they spared?

#59 THE CELIAC HUSBAND on 09.18.12 at 1:06 am

France Real Estate fun fact #1:
This proud nation of 60 million does not have an MLS system for their market.
That means if you want to see 4 or 5 houses in a smallvillage, you may need to call three or four realtors…
No lock boxes, not enough property finders.

So, all those realtors in Canada who may be looking for a job soon, come on over ……..start a new career as property finders.

http://theceliachusband.blogspot.fr/2011/11/house-hunters-international.html

#60 Nemesis on 09.18.12 at 1:06 am

All right, OldPol… I’ll bite… Is today’s LeaderIllustration a BeachSide ‘candid’ of BobRennie snacking on another PropertyVirgin lensed by the same Pap who did rhe Duchess’Décolletage??? Do tell!

#61 Ralph Cramdown on 09.18.12 at 1:07 am

I got into a bit of a dust-up with editorial staff at the Globe and Mail yesterday. An astute reader noted that their ‘Done Deals’ feature in Toronto from Friday was a property that likely sold around the end of April (above asking!)

I checked and, sure enough, it sold April 30th. Oh no, sez the Globe, we checked land titles, and the deal closed June 15th. So there you have it: The paper of record is reports in mid September on a bargain struck on April 30th and consummated on June 15th. What do they say? “Regardless of their weaknesses, we believe our Done Deal stories remain a crucial tool used by our readers to understand the state of the local real estate market and guide their buying and selling decisions.” Bamboozled by the cartel would be a charitable explanation.

I suggested that if they’re going to report spring market deals in the fall, they could at least publish the contract and closing dates.

#62 Mr Buyer on 09.18.12 at 1:16 am

Can sales data be obtained outside mls and real estate boards? If so how? If this can be done online then I think an opensource real estate information service is a real option. If it can not be done online presently then a way forward must be formulated. Any suggestions?

#63 dosouth on 09.18.12 at 1:23 am

It’s all B.C.’s fault and darn that F guy…

http://tinyurl.com/95lnmyk

…. and ther BCREA says this trend may only last for a few months….
………
………
……..
sorry, I just fell off my seat lau
g
h
i
n
g!!!

#64 Jane on 09.18.12 at 1:27 am

For those of us unable to attend, will you record TO’s presentation? Can u set up a link for us to watch live or at a later date? It would be much appreciated out West! Thanks!

#65 Mr Buyer on 09.18.12 at 1:28 am

#4 Kenken on 09.17.12 at 10:15 pm
And what if the Bank of Canada cuts interest rates?

Zero chance. — Garth
…………………………………………………………………
As I have stated before many times, a bubble is a very simple life form with a simple life cycle. It inflates and collapses. While government policy can indeed initiate and accelerate a bubble, prolonging a bubble is an exponentially increasing challenge as a point is reached at which all available resources have been consumed and even speculation reaches a degree of risk and insanity that the population at large can no longer ignore. At that point sales decline, then prices that cause a self reinforcing cycle that exponentially decreases the likelihood of the particular asset being the focus of a bubble for a generation or two at the very least. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE. THE BUBBLE HAS TOPPED AND POPPED. SALES AND PRICES ARE FALLING ACROSS CANADA. YES HOUSES CAN FALL DRASTICALLY IN VALUE AND NOT ACHIEVE THOSE VALUATIONS EVER AGAIN. The grim reality that will increasingly come into focus over the coming months and years is a scorched earth collapse in real estate prices and sales nationwide. THERE ARE NO SOFT LANDINGS.

#66 Mr Buyer on 09.18.12 at 1:31 am

I forgot to mention the real reason that the population at large is sobering up and re-evaluating. Debt fatigue, but even if the banks kept giving away money the bubble would have collapse they always do. All resources get consumed by bubbles until there is nothing left. SCORCHED EARTH is what results, not soft landings.

#67 Bob on 09.18.12 at 1:51 am

And what if the Bank of Canada cuts interest rates?
Zero chance. — Garth

Why do you think there is zero chance?

#68 Mr Buyer on 09.18.12 at 2:01 am

Why do bubbles ultimately and invariably crash? They suck all the air out of the room. They consume all available resources. Even in a debt fueled bubble such as our current monstrous RE bubble reaches a point at which the monthly payment consumes too much of the monthly budget. This would be almost unbelievable if this were a much maligned society of savers which we are not. A huge portion of monthly budgets service a host of other debts and obligations in addition to the monthly mortgage so it is easy to see there is a wall that we likely impacted years ago and passed through on the back of speculation and even more debt vehicles. Thus SCORCHED EARTH not soft landings (it would be interesting to amass data points supporting this assertion but sadly I simply do not have the time). I will finish by bolting this on the end of my little sermon. Common sense tells me that savers are not morons and losers as they are often made out to be. I have come to the understanding very late in my financial life that I should have been doing a hell of alot more saving then I did. It is the surest and slowest way to amass wealth. STOP consuming, START saving, become very fearful and let it motivate you to contemplate and gain some clarity and then proceed to take risks.

#69 esmerelda fitzmonster on 09.18.12 at 2:12 am

Couldnt happen to a better nation of smug. cliquey, corrupt hicks.

#70 cynically on 09.18.12 at 2:12 am

@25 guido, for G’s sake, keep a low profile will you, or they’ll be onto you!

#71 Tony on 09.18.12 at 2:24 am

Re: #9 DM in C on 09.17.12 at 10:20 pm

Calgary will get pounded to the downside especially when the price of oil falls below the $34.50 U.S. level likely late next year.

#72 martin9999 on 09.18.12 at 2:26 am

go and get one in china then (H2)

#73 Mr Buyer on 09.18.12 at 2:31 am

Consumption is not healthy. Let others do it. SAVE, SAVE,SAVE. Hot chocolate in thermoses, bagged lunches, home made pizza (it is better anyways). Water instead of sugar drinks, second hand cars driven into the ground. Spend on computers and internet access, not smart phones and cable TV (believe it or not there are still television stations you can pick up on antennas). Time is the real limited commodity. Learn two totally new pieces of software each year or two. Spend on exercising. Learn to relax, relaxation improves productivity when you have to work. Learn the traps, remember this bubble and tell your kids (so they will know when a new one is forming and get in and out unscathed our avoid it all together). Learn math. There are tons of resources online and you can get math texts at garage sales for pennies on the dollar. Math is actually fun and builds logical constructs that are laterally transferable (for what it is worth there was some research done that was trying to find common factors among groups of people somewhat well off and a relatively higher command of math was one such factor). There is no quick fix for this terrible time that is now upon us. Good luck everybody. My big challenge that is slowly gaining my attention and coming into to focus is developing what is known as passive income as I have maxed out my ability to increase my active income (at least through my present course of action, I am now concentrating on developing other means of increasing my active income). This lying to the general public to get them to make damaging financial decisions is absolutely unacceptable. It is not that I have never lied in my life but what has transpired to date and continues to unfold is nothing less than criminal misrepresentation of fact to gain profit at the expense of those being misinformed. Am I just too sensitive or what? We have to get fiber optic to the home nation wide and get the media giants out of the internet business (download/upload caps, ancient technology, hobble data transfer rates). In addition to this it turns out the carrier waves we use for our cell phones are potentially carcinogenic (this calls for a return to a wired internet experience until a less harmful carrier wave or network configuration can be implemented). Boy can I ever tell I am on holidays.

#74 Tony on 09.18.12 at 2:37 am

Re: #25 guido on 09.17.12 at 10:38 pm

http://guava.ca/

A forty percent price decline should take around 4 years in Toronto.

#75 B P O E -$-$ #2 on 09.18.12 at 2:48 am

Thats right you heard it here folks, the unthinkable is unfolding, sales in Vancouver worse than 2008 inventory past 19000 and soaring to 20000, completely unstopable, the bubble has burst, all the pros waiting in the wings have filled their pants and were last seen waiting in line at Money Mart. Fire sale pricing on Mercs and Beemers from repo man coming soon, 2 for 1 hammers and drywall at Home Depot.Real estate for sale/ reduced again/ bank owned sign installers working 24/7. Bob Rennie and Tsur new managers at White Spot. I’m very right!

#76 Buy? Curious? on 09.18.12 at 2:57 am

Garth, I guess this is your “I told you so!” Victory tour. Would you mind if I sold anti-nipple chaffing t-shirts outside your venue? And whatever you do, don’t pose beside Smokey the Bandit. He’ll pick your pocket or at least try to cop a feel.

Seriously though, are people getting scared or what? I have a friend who bought in deep Scarborough/Ajax (I don’t know what is considered the boundary anymore) who told me that his wife’s contract is up at the end of the new year and there is no talk of having it renewed. I know they’re not living the high life and my snobbish powers of perception would suggest that they’re barely getting buy. He wanted to know if I wanted buy his BBQ. “Not a Webber? Whatevah!” Once people start losing their jobs is when the real panic happen. The panic you’re seeing now are just busy bodies who have nothing else to talk about.

http://www.youtube.com/watch?v=DrLH1h78KhI

#77 Daniel on 09.18.12 at 3:24 am

#34 Onemorething

What is your take on the Penang market?

Even in the most desirable areas apartments are still in the $300(900rm)/sqft range.

#78 MoonSpotPrices on 09.18.12 at 3:27 am

It’s no mystery that prices are falling, its demographics.
https://upload.wikimedia.org/wikipedia/commons/4/49/Pyramideca2010.jpg
Buyers have all bought, and you’ll not see a return to this lunacy until the echo of the “boomers echo” (boomers grandchildren).

#79 Finally on 09.18.12 at 3:31 am

Thinking of buying in Lions Bay, West Vancouver when prices go down in a year or so. Anyone think its a good place to raise a family?

#80 My Head Hurts on 09.18.12 at 3:44 am

“…feel free to bring your used gold coins.”

You have told us soooo many times that “gold is dead”.
Why would you want gold Garth?

#81 Skip on 09.18.12 at 3:55 am

Capitalism starts to enter is dying days. Look it’s just the away it is, every economic theory tried out eventually dies. As you can see every time they try to fix it, it just causes troubles in unexpected ways. Here in Canada, to save the capitalist economy, they lowered interest rates and made buying a house easier, so everyone bought in. They didn’t know how chaos would rule the day. Know these same idiots are gonna tell us they have the fix to the problem caused by their original fix. For Capitalism to regain itself there would have to be an economy out there that could rescue it and their isn’t one. The West is in total decline and or stagnation. Plus there is no other country that has a stable society to take over from here. You think China and India care about Capitalism? They have been around for thousands of years, their just going with the flow at the moment. Tomorrow they will change if the wind blows in a different direction Cause they don;t give a fuck they’ve seen it all already. They have structured their society a thousand different ways already. They don’t think like you do Garth.

#82 Devore on 09.18.12 at 4:07 am

#32 Mark W

If homes sell at fire sale prices don’t real estate agents continue to make money in an up and a down market?

Sure they do. Well, SOME do. Dollar volume of real estate moved in Vancouver is off 35% YoY. What do you think that does to realtors’ incomes?

#83 Jay Currie on 09.18.12 at 4:36 am

Renting looks to be a good thing.

Here on the Dog Walk Index there are at least five “million dollar+” homes sitting vacant. No signs or sales, just empty.

Over a million in Victoria is the kiss of death.

#84 Plirr on 09.18.12 at 5:04 am

Thank you to Patiently Waiting. Much appreciated.

I certainly wish we had a Canadian site comparable to Zillow.

#85 Humpty Dumpty on 09.18.12 at 5:40 am

Edible Asians….

http://www.zerohedge.com/news/postcards-furious-china?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

Not all of us on the coast are bigots G, just have a look at these Pics….

We just dont want to see our city and country painted entirely with red…. Unless your a commie…

#86 Belzón on 09.18.12 at 6:04 am

I’ll be there in Toronto, Garth!

With bells on.

Only bells.

#87 Professor on 09.18.12 at 7:03 am

But but what if the gold coins end up exceeding 5% of your portfolio??

#88 Buy? Curious? on 09.18.12 at 7:40 am

#69 esmerelda fitzmonster, even with a thesaurus, I could not have said it better.

Canadians for too long have been patting themselves on the back, thinking that as a country, they’ve avoided what every other western nation has experienced. It’s coming Canada, it’s coming.

And now that there’s no hockey season, what do you think will be the new national past time?

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

#89 sweet on 09.18.12 at 7:43 am

very well written entry, garth.

#90 TurnerNation on 09.18.12 at 8:02 am

Oh Rly?

Turkey Cuts Rates First Time in 7 Months as Economy Slows
By David Neylan – Sep 18, 2012 7:26 AM ET

Turkey’s central bank cut interest rates for the first time in seven months in response to lower- than-forecast inflation and slowing economic growth.

The bank in Ankara reduced its overnight lending rate, the top end of its interest-rate corridor, by 150 basis points to 10 percent, according to its website. Six economists surveyed by Bloomberg had expected a 100 basis-point reduction. The bank held its benchmark one-week repo rate at 5.75 percent, in line with forecasts. It’s the first change in the corridor since a cut of 100 basis points to the top rate in February

#91 Victor on 09.18.12 at 8:24 am

Why I’m going to wait to buy a house and keep renting

http://www.theglobeandmail.com/globe-investor/personal-finance/home-cents/why-im-going-to-wait-to-buy-a-house-and-keep-renting/article4542610/

#92 John on 09.18.12 at 8:38 am

And on and on the denial plays out. One lurching step at a time.

What’s the truth? There is no housing correction and there will not be a housing correction. This is a fact.

So what’s the lie? Many are starting to catch on. By talking tech on “housing market correction dynamics”, the iron-clad assumption is that the market-economy contains and will continue to contain, moderate and “cycle” housing “values”. Tech talk babble is entertaining, but where is it going?

It’s about street smarts and playing an angle in the casino. Outta debt, liquid and diversified. Married to the casino and dodging the bullet while 90% of society gets sucked into depression. Huh? Did the Titanic have a “sideline”? Those would be lifeboats right?

Playing off of confusion and a couple of generations of consuming brain death means people will buy the babble on tech talk. They’ll soak up “housing correction” and pretend they’re “ok” via the outta debt, liquid, diversify mantra.

It aint so. There is no housing correction. The “values” for Mississauga housing came from international banking cartels. Check where “Canadian” banks have their “assets” ( digital casino chips and physical resources). Answer: Everywhere. Hey, it’s so international that they put Goldman Sachs Mark Carnival Carney in charge of the Canadian outpost. Good technocrat eh? Like Draghi and Three Card Monte. Canada is in this up to it’s armpits.

Housing? Stop. It’s just a passing denial fad.

Here’s an article on Canada and money printing. Wait…it’s about QE3. Doesn’t matter. Canada is an outpost in a seamless casino. Check it. Then think about “housing correction”. That angle is nonsense from top to bottom. It’s not legit.

http://lfb.org/today/five-deadly-effects-of-qe3/?utm_source=rss&utm_medium=rss&utm_campaign=five-deadly-effects-of-qe3

#93 HalifaxEd on 09.18.12 at 8:54 am

@ #12 WorriedInHalifax, who wrote: “What do you think will happen to Atlantic Canada (Halifax, in particular)?”

I’ll offer an unpolished opinion.

The almost astronomical rise in Halifax housing prices over the past decade were built on long amortizations and cheap easy money, just like the rest of the country. Not on true economic fundamentals like a vibrant economy and steady wage growth. The “wealth” we are seeing here is actually “debt”.

Our population is aging, taxes are punishingly high, and immigration has all but stalled. Young people continue packing up to seek better fortunes. Wages are still lower than national averages and stagnant. None of these factors can account for half-million dollar homes in Spryfield, Timberlea, and (gasp) Lower Sackville.

NS needs to retain its young population while attracting immigrants and new businesses to counteract the aging and shrinking demographics. If this was truly a good place to be (aside from scenery), then those factors would manifest and be self-evident.

To date, the gov’t still needs to offer considerable “bribes” and buckets of taxpayer cash to bring anything in, and that is never a sign of a healthy, stable, and growing economy. So far the model has been: bring in your business, take the taxpayer handouts, and close up shop once the perks run out.

Promises of a shipbuilding housing boom are still just wisps of air. If they ever do start cutting steel, no doubt they will just import cheap transient labour from overseas. There will likely be a mild swoon in local markets, but hardly the “boom” they salivate over.

Maybe I’ve been living in this “culture of defeat” for too long, but it seems they always find some way to bungle things up.

Our legs are still very wobbly. We are top-heavy with a public sector dipping into a rapidly decreasing taxpayer pocket. A few lofty promises of good things yet to come and our slowly fading optimism do not change any of the underlying economic and demographic realities.

Things are definitely going to cool and correct in the Halifax market. But developers and real estate agents will fight it (with denials and market manipulations) every inch of the way.

#94 syfon on 09.18.12 at 9:01 am

One day I will bring you my old gold.
Be patient.

#95 };-) aka D.A. on 09.18.12 at 9:07 am

The markets always seek equilibrium but never achieve it as the reckless drivers of monetary policy step too hard on the gas causing the pendulum to swing too far in the opposite direction.

The economy is much like a ship – there is no break pedal, just a throttle and steering. The momentum of a miscalculation continues long after realized. Will they ever learn slow, steady and neutral are their best friends?

And then there are those unexpected winds which can blow you off course compounded by the surprise of it such that you overreact giving her too much throttle. Before you know it you’ve smashed into the dock and done a whole lot of damage.

#96 Steven Rowlandson on 09.18.12 at 9:08 am

The long drop in sales and prices has begun. I expect that the term real estate will be deemed to be profanity by the time things bottom out. Financial sanity will bankrupt the real estate fanatics and bystanders will be very cautious about large purchases. When a 20 something tradesman or industrial worker can pay 3 years or less of his income as in one income for his first home then sanity will be restored to the real estate market. No combining incomes, no investors syndicates just one man earning a living and thats to buy a 2 to4 bedroom home on a lot. Untill that happens there will be no recovery.

#97 Sebee on 09.18.12 at 9:13 am

So the deleveraging has commenced.

Now, lets ask ourselves if rolling back the gains made since GFC will be enough, or if we’ll go right through that mark. What have incomes done since GFC?

#98 In Garth not God we Trust on 09.18.12 at 9:15 am

#67 Bob

“And what if the Bank of Canada cuts interest rates?
Zero chance. — Garth
Why do you think there is zero chance?”

Why you ask? Because the bearded mystic oracle, all knowing, all wise, gifted financial prognosticator without equal, sooth saying, crystal ball gazing, denouncer of parliamentarian peckerheads and peckerettes, former minister of National Revenues, Amazon bathed and protected, Harley riding bad ass, lone voice of financial reason crying out in the HELOC infested wasteland of Canada knows what he is talking about and his pronouncements are worthy of betting your house (if you own one)on. Nuff said. Sheeesh!

#99 };-) aka D.A. on 09.18.12 at 9:20 am

Clues the market might well be headed toward another SHIFT

Clue #1

Price follows volume and this year to date, in Kelowna, there have been 10% more single family homes sold than there were during the same period last year. Again price follows volume and volumes are clearly moving up despite the 1% drop in average prices this year over last consequential to the dynamics of that market the year before last. Lag time… the price drops eventually beget volume increases which ultimately bring about price increases.

Clue #2

The all-important first time buyer market which typically represents about 25% of home sales has recently be curtailed, largely by changes in monetary policy, to just 16%. Granted some of that lost 9% can be attributed to shifting demographics but the bulk of it is policy driven and represents a pent up demand.
An FTB market of just 16% is not normal and not healthy for the economy. If the first time buyer market does not regain its typical market share on its own you can expect recent monetary policies to be revised in order to facilitate such a return to norm. That pent up demand representing a potential and probable 9% increase in volumes will eventually, and sooner than you might think, be invited back into the market one way or another.

#100 Brett in Ottawa on 09.18.12 at 9:21 am

#32 Mark W

I want to know why you think the volume of sales is going to go up, and not down. You will have a lot of people on the selling side that will be reluctant to sell for less then what they think their place is worth. You will see some sporadic sales at lower prices, which will further widen the gap between the sellers unrealistic expectations, and the few buyers who will not want to overpay for a place that might be worth less in a year if the current trend persists.

We as Canadians should be learning from the American experience, and somehow we ignore what they’ve gone through.

I always laugh when I watch the Steve Carell movie ‘Date night’ from 2010. In it, Tina Fey is a realtor, she has a couple in to look at this beautiful place, she goes on about the great things with the place, and the fact that it is down to 300k from 1.8 million, and the couples reaction, “we think it will still come down some more”. This little bit of comedy is likely to tell us about where we are going in the near future, and I don’t think the number of sales will be going up in this environment.

#101 Weedeater on 09.18.12 at 9:27 am

@#67 Bob
An interest rate cut won’t happen unless a scenario of a crash landing in the housing market occurs. And, F says he has a contingency plan for that, so we’re okay (laugh). Carney desperately wants to raise the rate and that timeline is pushed out even more now, after the actions of the US Fed’s bond buying. Maybe not zero chance, but not likely in the extreme.

#102 Daisy Mae on 09.18.12 at 9:31 am

#39 Mithan: “Hopefully you can post those answers Garth, though I imagine you will say the buyers market will be in 2015, after the bull trap hits people in 2014…”

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

Well, I am staring at my copy of ‘2015 – After the Boom’ (How to prosper through the coming RETIREMENT CRISIS).

Time to re-read….

#103 Patiently Waiting on 09.18.12 at 9:46 am

Just saw this interview on BNN this morning. Analyst says housing price correction has begun . . . not hard to imagine price drops of 25% or more in Vancouver area . . .

http://www.bnn.ca/News/2012/9/17/Economists-warn-housing-correction-taking-hold.aspx

pw

#104 Leggendario on 09.18.12 at 9:49 am

Oh the 12% drop here in Saskatoon is just normal. Summer is over that is the reason. Still, “It’s Different Here.”

Garth, do you think moving to BC from Saskatoon will be a great idea. Are they more delusional there?

#105 Francis on 09.18.12 at 9:51 am

Many thanks for your morning tonic. The injected humour is brilliant. Do you really own a Hummer ?

#106 Form Man on 09.18.12 at 9:53 am

#99 DA

grade 2 math. supply demand equation. I have 2 eggs, there are 12 spaces in the carton………

Kelowna market has 13 MOI. Until this drops below 6 MOI prices will keep falling.

should not be too hard to understand…….

#107 Alberta Boy on 09.18.12 at 9:54 am

My wife and I recently moved to Halifax. I am a doctor and she is a nurse. We sold our home in Edmonton last month. Guess what we’re doing in Halifax? Renting! The prices in Halifax are outrageous. We have been called crazy by realtors who say that the “ship building contracts will drive RE way up.” I do not believe oil will save Alberta and I definitely do not believe ships will save Halifax. There are some rough seas ahead.

BTW I became a Garthite 3 years ago at one of his revivals in Edmonton.

#108 Just Park It on 09.18.12 at 10:00 am

Just to add my 2 Cents … even during the hayday of rapid price appreciation – my wife’s parents were told by the realestate agent to lower the price by 7% if they wanted an “easy” sale…in other words, the agent wanted to make “0” effort in selling the property and to accomplish that – create buzz with a lower price – I don’t necessarily see that as a sign things are declining –

But I do have a question for some in here who do the happy dance at the financial ruin of others (there probably is a more sinister underlying issue) –

Anyways – you buy say at a 30% discount from today’s prices -why buy even then, prices may head to Zero – I don’t need some to tell me there waiting for prices to head to affordablity range – what out there is actually affordable. As Gordon Gekko said it best “how do they price a paper clip – by pulling that number out of thin air” – that is so true in about everything we buy today –

Enjoy today because it may be your last!!

#109 Canadian Watchdog on 09.18.12 at 10:13 am

Is BILD’s website working for you guys? http://www.bildgta.ca It hasn’t been online for a few days.

#110 LuckyRenter on 09.18.12 at 10:17 am

Economists warn housing correction taking hold!!

After years of blistering price gains and surging sales, the much-talked about correction in Canada’s housing market is taking hold, according to a number of economists.

On Monday, the Canadian Real Estate Association (CREA) said the number of home sales in August posted their biggest month-over-month decline in more than two years.

August sales fell 5.8 percent from July and were 8.9-percent lower than the same time last year, CREA said. The pullback was felt across the country, with sales down in about 80 percent of markets — including in nearly all of the country’s largest urban centers.

http://www.bnn.ca/News/2012/9/17/Economists-warn-housing-correction-taking-hold.aspx

See you October 23 Mr. G.Turner

#111 Blacksheep on 09.18.12 at 10:23 am

D.A. #99,

“An FTB market of just 16% is not normal and not healthy for the economy. If the first time buyer market does not regain its typical market share on its own you can expect recent monetary policies to be revised in order to facilitate such a return to norm”
——————————————
No worries. Supply vs Demand, rules. Policy was applied to ‘affect’ the exact change your concerned about. The First Time Buyers will once again represent their traditional % once the ‘supply’ price adjusts to the point that ‘demand’ returns, via qualification or willingness to pay. That’s why it’s called a ‘correction’. Your being a realtor and using the word clue repeatedly, while distributing poor advise, is just looking for trouble : )

take care,
Blacksheep

#112 Gunboat Denier on 09.18.12 at 10:38 am

Sign me up for Toronto! Just one question.

Where’s Toronto??

#113 Cristina on 09.18.12 at 10:45 am

Hi Garth.. love love your blog. I signed up for the Oct. 23 event and received an acknowledgement by email. Does this mean that I am confirmed for the 3 seats that I requested? Am I to get a confirmation No. or tickets later?.. Thanks so much and keep up the wonderful work that you do for Canadians.
Cristina

You are confirmed, however expect a reminder letter closer to the date of the event. — Garth

#114 EIT on 09.18.12 at 10:52 am

I hope Israel doesn’t attack Iran. The war drums are beating louder. This is gonna suck.

#115 John on 09.18.12 at 10:54 am

And what if the Bank of Canada cuts interest rates?
Zero chance. — Garth

Why do you think there is zero chance?
———

Bank of what…? Since when is that relevant to causes and effects in the Canadian economy.

We could all pretend that there isn’t an elephant in the livingroom, but the 50 kilogram sacks of peanuts stacked 8 feet high against the walls kind of gives it away.

#116 eaglebay - Parksville on 09.18.12 at 10:56 am

#81 Skip on 09.18.12 at 3:55 am
“Capitalism starts to enter is dying days. Look it’s just the away it is, every economic theory tried out eventually dies.”
_______________

Capitalism will not die. It works perfectly.
It’s the governments interferences that screw it up.
China and India will become more capitalists over time.
Mark my words.

#117 Ralph Cramdown on 09.18.12 at 11:15 am

Tactics, gentlemen, tactics.

All of these policy changes from Finance are obviously designed to put the squeeze on one Thomas Mulcair, the home-as-ATM cash out refi King of the Commons. All else is merely collateral damage.

#118 Realtors are in an all out panic on 09.18.12 at 11:24 am

http://www.theglobeandmail.com/report-on-business/economy/canadian-economy-stuck-in-soft-patch-td-warns/article4550790/comments/

The slow patch is going to get alot slower as housing takes a huge hit as people without money can no longer buy homes . Also HELOC which allows people to use their home as an ATM will end those slowing the fake economy even more. It’s going to be a nasty crash realtors a nasty crash.

#119 Industrial Guy on 09.18.12 at 11:34 am

Through Canada’s Economic Action Plan, your Government has streamlined a gift to manufacturing companies and lawyers across Canada. It’s called SR&ED. It’s $4.7-billion in your tax dollars handed out to 20,000 Canadian companies across Canada for “Research and Development” but very little R&D is actually done.
It’s basically a scam ..and it’s such a lucrative scam that Canada Revenue Agency staff are leaving the Government to work for private consulting agencies.

Great article in the Globe and Mail: http://m.theglobeandmail.com/report-on-business/flawed-rd-scheme-costs-taxpayers-billions/article1939418/?service=mobile

CRA will will hound you for that $150.00 you owe them and yet they permit wholesale fraud on a grand scale.

#120 Onthesidelines on 09.18.12 at 11:37 am

Something to keep in mind as all of this unfolds is that owning one’s own residence is far from being a necessity as, indeed, are many purchases. Once people wake up from their delusional desire driven motivation, the hammer will come down on realestate like we’ve never seen before.

#121 Wudeva on 09.18.12 at 12:02 pm

Smokin’ blog today Garth!
Maximum bravado.
What brand of coffee do you guzzle?
Must be Kickin’ Horse…Kick-ass!

#122 Bill Gable on 09.18.12 at 12:16 pm

Mr. Turner is well worth seeing, even if you have to stand.

I was hacked, I was out of Vancouver, when the “Bearded One” was telling us the truth, here in Rain City.

If you have not get your tickets – you might be too late.

Too bad Mr. Turner can’t write either, sheesh.

#123 EIT on 09.18.12 at 12:19 pm

#81 Skip on 09.18.12 at 3:55 am
“Capitalism starts to enter is dying days. Look it’s just the away it is, every economic theory tried out eventually dies.”

———————————————————-

Please define capitalism. And please enlighten us as to the type of economic system that is presumably replacing the one that is entering its dying days.

#124 Bill Gable on 09.18.12 at 12:21 pm

BTW – you should try on prices for everything in France!

Paris blew our minds. We think it’s nuts her? Sacre Blue jeans, it was insane!

No wonder people take scooters in Paris – and there’s a punishing 16 something VAT.

Yipes. Something’s gotta give. Lots of unemployed 25-35. Oops.

#125 Marina on 09.18.12 at 1:01 pm

Garth, you are alrming RE decline for a few years and I don’t beleive you any more. Soon RE prices will go up again.

On your planet? — Garth

#126 truth hammer on 09.18.12 at 1:10 pm

Did I just hear a two-headed dog barking?

“Already offshore buyers have retreated with their tails tucked as the banks refuse to give equity loans. No more money based on fat downpayments, instead of Canadian income.”

Did Garth just admit the unadmittable…in print? Is he finally admitting that HAM was a factor and that Canadian Banks were loaning money to non citizens to speculate in the Canadian housing markets as many…myself included…..have pointed out only to hear the politically correct bleating that nothing like HAM has ever existed and if it did there would be no consequence to local markets as speculation by foriegners ratcheted up local residential real estate values with speculation……hold my hand Garth….the stench of burning hypocrisy is giving me ‘the vapours’.

#127 Jim on 09.18.12 at 1:12 pm

“Capitalism starts to enter is dying days. Look it’s just the away it is, every economic theory tried out eventually dies”

We don’t have capitalism. In a capitalist economy there are no bailouts, patents, subsidies, government agencies holdings trillions of private sector mortgages, etc.

#128 Randman on 09.18.12 at 1:38 pm

The Global economy continues it’s decline…

“For the current quarter, FedEx forecasts earnings of $1.30 to $1.45 per share, compared with $1.57 per share last year. That’s well under analysts’ forecasts.

FedEx’s forecasts are closely watched for signals of future economic health. Its results provide insight into the global economy because of the number of products it ships and the number of countries in which it does business.”

http://ca.finance.yahoo.com/news/fedex-says-global-economy-worsening-further-cuts-outlook-121653780.html;_ylc=X3oDMTEwNTJqdmpoBF9TAzExODQ1NTAwMDkEcG9zAzIEc2VjA211c3RyZWFk

#129 Steve on 09.18.12 at 1:43 pm

Edible Market = “Gulliver Eating an Amazon” ???

#130 jess on 09.18.12 at 1:44 pm

something to chew on

…”even George W. Bush’s own Treasury Department conceded in 2006 that the Bush tax cuts (which were mostly targeted to the wealthiest Americans) would not have a significant effect on economic growth over the long term. And every few weeks in his New York Times blog post, Ronald Reagan’s former advisor, Bruce Bartlett, explains that tax cuts really can not and do not make an economy healthy.”

======================
http://www.loc.gov/crsinfo/about/

A non-partisan Congressional Research Service (CRS) using data from the past 65 years found that there is no correlation (PDF) between top tax rates and economic growth. But it doesn’t stop there. The study also found that there is a correlation between the reduction in top tax rates and the increasing concentration of wealth toward the top of the income distribution. The report, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, is also clear that this is not only about tax rates on regular income, and points out (PDF) that “changes in capital gains and dividends were the largest contributor to the increase in income inequality since the mid-1990’s.”

http://www.ctj.org/taxjusticedigest/archive/2012/09/its_official_cutting_top_tax_r.php

#131 triplenet on 09.18.12 at 1:50 pm

#51 – Two-thirds
Why change disclosure rules on true selling prices? Why now? What do the board knows (sic) that the rest of the market participants don’t?
—————————-
It’s (governmental) privacy laws that direct policy and this is the result although it may seem somewhat illogical in practise. This legislation will also give you insight into the development of the bra and why we sometimes think the law is an ass.
As per your (linked) article:
(The) co-chair of the association’s arbitration and professional standards committee, says the new policy is intended to address privacy and liability issues.

#132 bubble head on 09.18.12 at 1:51 pm

mid sales for the 416 -TREB

sales down 20% for detached , 30% for Condos
still can’t believe the average price is holding up.

#133 zeeman1 on 09.18.12 at 2:03 pm

http://business.financialpost.com/2012/09/18/the-10-most-notorious-doomsayers-on-wall-street-and-what-theyre-saying/

Garth, thoughts?

#134 Old Man on 09.18.12 at 2:04 pm

Just heard that some amazon gal is so excited about Garth’s seminar she hooped a ticket, and is flying in from the Caribbean to hear his lecture, and wants to meet Smoking Man over drinks, and her name is Karla.

#135 triplenet on 09.18.12 at 2:08 pm

#61 Ralph Cramdown
Bamboozled by the cartel would be a charitable explanation.
——————————-
The correct explanation is there was a meeting of the minds on April 30th., with a completion date of June 15th., and an LTO date stamp of June 15th. Sometimes it takes another month or two of “bureaucratic time” to report and publish these stats.
There has been no recent change to this policy and procedure. All analysts know that.
Are you still bamboozled?

#136 Blacksheep on 09.18.12 at 2:17 pm

John #92,

“So what’s the lie? Many are starting to catch on. By talking tech on “housing market correction dynamics”, the iron-clad assumption is that the market-economy contains and will continue to contain, moderate and “cycle” housing “values”. Tech talk babble is entertaining, but where is it going?”

“It’s about street smarts and playing an angle in the casino. Outta debt, liquid and diversified. Married to the casino and dodging the bullet while 90% of society gets sucked into depression. Huh? Did the Titanic have a “sideline”? Those would be lifeboats right?”

“Canada is an outpost in a seamless casino. Check it. Then think about “housing correction”. That angle is nonsense from top to bottom. It’s not legit.”
————————————————-
The system / machine / casino, has got our collective number. Agreed. Some people here have shared concerns of : protest / anarchy / unrest. Recently at the annual Langley Cruise In (large car show in Fraser Valley) I lost hope of any ‘positive peaceful action’ ever taking place, to better our situation. While enjoying the scenery and cars, my wife and I noticed a line containing 1-2 thousand people. We had no idea what would prompt the masses to patiently form, a ridiculously long line (many with fussing children). Obviously, in my ignorance, I had overlooked some special event taking place. I resisted the ingrained herd drive, to join line and asked a man at least 1000 people from the front, what marvellous wonder awaited those whom had the endurance to stand, on the blacktop in the sun, for what would certainly be hours based on the stationary stance of this snaking line? And I quote:

“It’s an IN n OUT Burger trailer” & “Their burgers are reallllllly good”.

I could not contain myself and burst out laughing, “waiting hours for hamburgers!?!?”

Nothing but dirty looks. Time to go. Some people wonder why I refer to the great unwashed as Cattle. Resistance is not futile….it won’t even be attempted.

So this is the reality. No massive change coming. How to deal? While venting can be therapeutic, endless complaining (myself included) about corrupt elite, banks, corps or politian’s is wasted energy. Time to figure out the casino / machine / system and play the game (legally). Garth’s Greater Fool shtick follows this premise. Think contrarian on steroids. So going forward John, I would respectfully request, we attempt to enlighten the Cattle (me) with insight and solutions. Once you ‘see the elephant’ it’s impossible to ignore. We can not save the many, but with some luck, a few, may just find that seat on the proverbial lifeboat.

take care
Blacksheep

#137 disciple on 09.18.12 at 2:21 pm

Confirmed… Former Chancellor of Germany, Gerhard Schroeder is played by Jeff Bridges… warning to all of you criminals in our Canadian government,… I’m coming for you…

#138 Victoria Tea Party on 09.18.12 at 2:35 pm

#52 …Vlad EYES WIDE OPEN

Yes, pansies, exhanged by China and Japan, indeed.

Twentieth Century “relations” so-called between Japan and China (the 1937 “Rape of Nanking” comes to mind) have been less than sanguine, if you’ll kindly excuse that word.

Wikipedia writes thusly: “…the Rape of Nanking, was a mass murder and war rape that occurred during the six-week period following the Japanese capture of the city of Nanking (Nanjing), the former capital of the Republic of China, on December 13, 1937 during the Second Sino-Japanese War…Historians and witnesses have estimated that 250,000 to 300,000 people were killed…atrocities, at the time labelled as war crimes, were later tried and (many perpetrators were) found guilty at the Nanjing War Crimes Tribunal, and were subsequently executed…”

OF CONTINUING IMPORTANCE…

“…The event remains a contentious political issue…As a result of the nationalist efforts to deny or rationalize the war crimes, the controversy surrounding the massacre remains a stumbling block in Sino-Japanese relations…”

SO…

Today’s demos in China, against Japanese business and other interests, have long historical legs.

But the key reason behind these protests has more to do with central bank money printing, and its subsequent effects of driving commodities prices higher thus cramping peoples’ “standards of living”.

This event is well-worth watching.

I can’t imagine war breaking out but if it did, Japan would lose big time because the US, crippled by political correctness, would be left flat-footed in having to respond to an “ally” in trouble IN TIME.

Troubles, similarly, in the Middle East can also be traced back to central bank fiddles.

BTW, we should all be watching Syria a little more closely. Will some catastrophic history-driven denouement between the shias and the sunnis be “hatched” as a result of the battles within battles going on in that tragic place?

The Arab “market place” can get a bit complicated at times.

#139 Old Man on 09.18.12 at 2:42 pm

#125 Marina – when you see a false bottom settle in get horny and buy something, as there will be a false bottom when the herd rushes in once again, but that will be Act 1, so stick around for Acts 2, and 3. The final bottom will take a few years for the curtain to close, and that will be the time to buy.

#140 IM in C on 09.18.12 at 2:44 pm

@126 Truth Hammer
The trouble with ‘that ‘ subject is, it almost instantaneously morphs from a intellectual discussion to a rascist rant and in the process , deflecting us all away from the truths being delivered by our bearded oracle. Much as I hate to say it, sometimes it is better to be politically correct.

#141 An Cat Dubh on 09.18.12 at 2:50 pm

I heard two newsjocks on the Kelowna news station today saying the new word for real estate in KLO is R.E.N.T. One of the jocks was a former real estate broker. They were mentioning the condo projects which only have 1 or 2 phases complete. They were saying it’s going to be maybe 7 years before things pick up. I think it will be longer than that.
I guess the new Toyota Lexus dealer in Kelowna won’t be selling too many vehicles now. Realtors are some of the biggest Lexus buyers.

#142 Ralph Cramdown on 09.18.12 at 2:51 pm

Yo triplenet:
“[…] a meeting of the minds on April 30th., with a completion date of June 15th […]”

My files got the sale info on May 1, as did every TREB realtor. The Globe published it a few days ago, with no date, and suggesting it was indicative of the current market. By then, it was already stale for use as a comp, and in no way indicative of September market conditions.

#143 backwardsevolution on 09.18.12 at 3:05 pm

Industrial Guy (post #119) – thanks for the link to the article on “Research and Development”.

“It’s basically a scam…and it’s such a lucrative scam that Canada Revenue Agency staff are leaving the Government to work for private consulting agencies.”

Just another handout to the people who supply campaign contributions. Makes you really wonder about all tax credits, doesn’t it?

http://m.theglobeandmail.com/report-on-business/flawed-rd-scheme-costs-taxpayers-billions/article1939418/?service=mobile

I just wonder what the landscape would look like if there wasn’t pandering to different interest groups (i.e. first-time buyer tax credits, lengthening the amortization term, lowering interest rates, et cetera). We’d probably be able to make reasonable decisions about our lives.

Disgusting! Get rid of all of these tax scams. It’s just the government’s way (whoever is elected) of winning votes and helping friends.

#144 betamax on 09.18.12 at 3:07 pm

Talked the other day with a very successful Van realtor who’s always had high sales, even when other realtors experienced slowdowns in ’08. But now, the market is dead for him. Listings through the roof and no sales for over a month. Worst August ever.

Why? He honestly didn’t have a clue. Thought maybe it was the good weather. (LOL) He’s a great ‘people person’, but neither research nor logic are his strong points.

He’s just hoping that things will somehow pick up in the fall, as his fixed costs are decimating his meager savings. His business model is based on a continuous boom, so even a slowdown will torpedo his finances, let alone a full-blown correction.

I’ve been cautious to call the crash as finally happening, but now I’m convinced. If this guy is dead, then it’s done.

#145 Smoking Man on 09.18.12 at 3:11 pm

#133 bubble head

Prices still going up, you aint seen nothing yet.

Let’s go back to early 2009. Dominated in the papers, radio, Tv. Gloom and doom, we where bleeding jobs.stock market was tanking. Rosenberg calling for a 4000 tse. And this blog Msm was on a rampage to find negative stories.

Re started to crash. Then out of the blue the little red dots on the MLS vanished. The stuborene heard just de listed rather that take a bath.

Its happening again. Red dot hide and seek.

Bubble Head it 4 years later. Do you think the herd is scared.

Sales are 20 precent down off historic highs. In spring of 2009 only 1/4 of the volumn of last month changed hands.

So barring massive interestrate hikes or massive job cuts

Prices of 416. SFH are going one way and that’s up. Demand is there and supply is rapidly vanishing. And remember house arre always cheapest in Dec.

#146 backwardsevolution on 09.18.12 at 3:11 pm

Truth Hammer (Post #126) – “Did Garth just admit the unadmittable…in print? Is he finally admitting that HAM was a factor and that Canadian Banks were loaning money to non citizens to speculate in the Canadian housing markets…”

Garth has been totally and crushingly wrong on this one, especially re Vancouver. He doesn’t live here and was not able to witness the onslaught.

Garth, you’re great, but take Bob Rennie out for lunch the next time you’re in town and ask him about HAM. HAM had a monumental influence on Vancouver real estate prices.

#147 jess on 09.18.12 at 3:13 pm

price holds up until …for example, when

Boom time for fraudsters as “austerity bites”
fraud barometer uk
http://www.kpmg.com/uk/en/issuesandinsights/articlespublications/newsreleases/pages/fraud-barometer-boom-time-for-fraudsters-as-austerity-bites.aspx

#148 Smoking Man on 09.18.12 at 3:18 pm

Bubble head I have know idea why people at the go statioin file threw on little tunnel at the back of the station to go to platform 6. When the doors open first on platform 5.

So as logical and mathamaticaly correct a big crash is coming the owner refuse to play. And I see nothing in the short turm to make them think other wise.

Oh and old man I would do Karla

#149 John on 09.18.12 at 3:35 pm

Justtryingtoprotectequity wrote:

“House prices should have corrected four years ago. You were right. And only historic low interest rates and Mr. Flaherty’s shenanigans (0 down/40 year amortizations) kept the party going. Like giving alcohol to underage drinkers. They just couldn’t stop taking on more and more debt. Driving up the price of homes, leasing vehicles, taking out second mortgages and lines of credit. Easy money. An absolute sham and all at the behest of one Jim Flaherty.

Thank you sir, for what you do.”
————-

Anyone else cringing at this stuff?

Look at the name of the poster: “justtryingtoprotectequity”. Exactly. The global casino loads up a demographic ( mostly) segment with casino chips via selling cheap money to Canadians ….and the response is “just trying to protect equity”.

“Just trying to protect equity?”. Yep. That’s what drives all the analysis, all the questions, and all the answers. The posters handle is another name for “hopelessness”.

The good news though…is that it won’t happen. If the horseshoe toss club were to “win”, of course they lose.

The cartels have absolutely no intention of letting them keep the “money”. So there’s no long-term advantage of taking the equity and partnerin’ up with the cartels that are doing this. Short term? Sure. Who knows how long. It depends on a few things, as gets outlined every day on this blog.

It’s important not to forget that the casino couldn’t operate without dupes. Getting into debt, becoming illiquid and being undiversified makes you a dupe.

Guess what else. Getting out of debt, becoming liquid and diversifying doesn’t un-dupe you. I suppose it helps on some level. But not to the level being argued by some here. Why? You need a functioning ponzi long-term to make it work.

The problem is far more serious than that. You mentioned “hope” by referring to the article, but “just wanting to protect equity” is hopeless.

#150 Old Man on 09.18.12 at 3:36 pm

You will never know in Real Estate or anything else in life about the great illusion; knowledge is power that takes years of experience to understand it all. Now in my youth took a year off to make some money, as became an auditor for a huge firm with big accounts with an undergraduate degree.

Ok, need to be careful, as one of the largest companies in the world made items that you walk upon, so off I went for a week on an audit with a few others east of Toronto to the main manufacturing plant for a week, and we had big expense accounts, and one junior partner came along; oh we ate well, and went bowling at night, and ended much to my horror every night at this strip club, as the junior partner was the boss.

One morning over breakfast asked about this huge building in the forest, and he said that is the division for engineering, but we can’t audit it; just for the eyes of a senior partner only. Well, he took us over, as they knew him, and we were placed in this upper level room just to look. I saw the biggest lathes in my life as far as the eyes could see making missles for USA.

#151 robert on 09.18.12 at 3:54 pm

Anyone sitting on interior of BC properties waiting for the prices to go back up needs to read this blog three times a day. Kelowna has one major problem, its called no good paying jobs and you can add Vernon and Salmon Arm to this list. Kamloops is the exception in the jobs arena yet their RE has come to a standstill. IMO this winter is going to be the tipping point in the interior and prices could accelerate to the downside. As the Boomers face the possibility of a major correction in the market we will see a flood of listings as they look to downsize and put some cash in the bank. You also have to ask yourself what percentage of the thirty percent of non home owners will decide to stand on the sidelines waiting for the other seventy percent to reduce their prices? Oh yes and what percentage can no longer qualify to buy a home?The numbers just donot work on any metric. All the way from supply and demand right to the other side of the fence which includes qualifying for a mortgage and the real fly in the ointment being appraisals. All this talk about long term price depreciation is bogus as once the this ball gets rolling IMO a 25% drop could happen over 6 months which will just add gasoline to the fire..

#152 jess on 09.18.12 at 4:05 pm

Disclosure = see through rather than a pass through

How come ?
OECD is “skeptical” about Rubik accords. see- loopholes regarding Beneficial Owner: (insurance wrappers and foundations)

http://blogs.euobserver.com/shaxson/2012/09/18/crucial-battle-on-tax-transparency-in-german-bundestag/
Crucial battle on tax transparency in German Bundestag
The German Bundestag is to hold an official hearing on Monday (September 24th) on the bilateral Swiss-German “Rubik” tax agreement, which has been signed by both countries but not yet ratified in Germany

http://www.bundestag.de/bundestag/ausschuesse17/a07/anhoerungen/2012/DBA_D-CH/Stellungnahmen/14_-_Mark_Morris.pdf
How to remedy the Swiss-German tax loopholes 24.9.2012

#153 jess on 09.18.12 at 4:15 pm

http://www.taxresearch.org.uk/Blog/2012/09/17/pull-the-other-one-pwc/

#154 Old Man on 09.18.12 at 4:18 pm

#149 Smoking Man – I use to live in Port Credit many decades ago with my small apartment going back and forth into Toronto, so don’t knock the Go Train, as got more dates on this system than Sinatra ever had, and it was my pickup train into paradise with a sweet taste of honey.

#155 GregW, Oakville on 09.18.12 at 4:39 pm

Hi Garth, You or someone else might be interested?
The Canadian Club of Toronto, Tue. Sept.25 11:30am
Speaker: Hon. Peter Kent, Canada’s Environment Minister
http://canadianclub.org/Events/EventDetails.aspx?id=3201

#156 Victor on 09.18.12 at 4:41 pm

“Soft landing at worst” for Canada housing market: Scotiabank CEO

http://ca.finance.yahoo.com/news/soft-landing-worst-canada-housing-200039310.html

But Waugh, the head of Canada’s third-largest bank, said all indications so far point to a fairly modest correction that will not significantly affect lenders, which lose money when homeowners stop paying their mortgages.

“The numbers we’re seeing are really not a huge surprise. They are well within our expectations of, say, 10 percent (declines) in sales volume and 10 percent in prices,” Waugh told reporters following a speech on risk management in Toronto.

============

A 10% decline isn’t ‘modest’ for greater fools who have less than 10% down payments. That spells a 100% loss of equity.

This will not end well.

#157 DON on 09.18.12 at 4:46 pm

@ Mr. Buyer

It’s a pleasure reading your posts. Well worth my time.

I’m on vacation also.

#158 Realtors and bankers in an all out panic on 09.18.12 at 5:05 pm

Look at the bankers out in an all out panic as word is bankers are seeing foreclosures EXPLODE in vancouver as the house of cards is falling down and falling down hard. Many people have used their HELOC to borrow to make payments on their mortgage. Now that they can no longer use their HELOC people in vancouver are going bankrupt like crazy. It’s going to be a nasty crash realtor and bankers a nasty crash.

http://www.theglobeandmail.com/report-on-business/economy/canadian-economy-stuck-in-soft-patch-td-warns/article4550790/comments/

http://www.theglobeandmail.com/report-on-business/economy/housing/at-worst-housing-market-headed-for-soft-landing-scotiabank-ceo/article4551980/

You can smell the fear from the bankers. Canada faces the greatest housing crash in history

#159 torontorocks on 09.18.12 at 5:08 pm

Are we wearing name tags at this love in or what?

What’s with the ‘where’s the event. Where’s the event’ chicken littles? Click on the effin link!

#160 TheBigLebowski on 09.18.12 at 5:30 pm

Are you scared out of your wits yet with all the political economic and social upheaval all over the world? No? Then get ready to suffer through even more until you are begging to give up your sovereignty to the United Nations and allow them to rule over us. Its all managed deception and they are very good at it because its an old science

Is Kamloops a good place to hide? — Garth

#161 TNT on 09.18.12 at 5:32 pm

152-Robert

Just spent a week in Kewlona.
Spoke to a RE agent on the Westside.
His response was that sales numbers were up, prices are still high regardless of inventory.
Saw quite a few Ferraris,Lamborgs,Porshe..
He said that a large % of buyers are from Alberta.
But, some deals to be found inland not on the water.

My concern about Kelowna is that there is countless tons of pesticides from the miles of grape growing for the wineries dumping into the lakes and ground water.
I would be curious to see the cancer rate charts.

A paramedic from the Osoyoss area said he would never swim in that lake, open sewers its full of crap,condoms,tampons..
Eye and ear infections, strep, you might as well drink out of a toilet.

#162 JustTryingToProtectEquity on 09.18.12 at 5:35 pm

#150 John

Wow John, you sure put me in my place.

Thing is, I just sold my million dollar home and I have another property (that I own outright) that I “hope” to retire to.

With close to $3.5 million now invested in everything from Apple stock to some of the ETFs that Mr. Turner has been recommending, I think I’m doing just fine, thank you.

It is a casino if you play it like one. I agree.

But, if you follow Mr. Turner’s advice, he’s trying to take some of the risk out of the equation for you.

You’d be wise to listen to him.

I hope you agree.

#163 Old Man on 09.18.12 at 5:36 pm

I had a bad night the other day, as is a man’s worst nightmare, as two lovers came to see me at the same time knocking at my door. The one gal said who are you? The other said and who are you? They both agreed that I was her boyfriend, so now have a problem as they both want to kill me, so am leaving town. I am so sorry about this all.

#164 patiently waiting on 09.18.12 at 6:06 pm

MLS® Summary – Fraser Valley

August 2012
Sales 1,073 1,341 -20.0% 1,393 -23.0% Sales – year to date 10,425 11,254 -7.4%
New Listings 2,406 2,644 -9.0% 2,938 -18.1% New Listings – year to date 23,346 23,371 -0.1%
Active Listings 10,366 10,074 2.9% 10,813 -4.1%
Average Price $ 483,024 $ 506,075 -4.6% $ 472,516 2.2%

#165 patiently waiting on 09.18.12 at 6:11 pm

Fraser Valley Real Estate Board August Stats show sales have plummeted 20% YOY and 23% MOM

Aug-12 Aug-11 % change Jul-12 % change
Sales 1,073 1,341 -20.0% 1,393 -23.0%

PW

#166 John on 09.18.12 at 6:29 pm

Justtryingtoprotectequity wrote:

“With close to $3.5 million now invested in everything from Apple stock to some of the ETFs that Mr. Turner has been recommending, I think I’m doing just fine, thank you.”
—–

I don’t doubt that you’ve been “doing well”. You did virtually nothing to win your earnings ( as evidenced by the fact a 25 year old couldn’t do the same today) and want to protect them. I would too.

That’s one thing. But when you talk about this “helping people”, now you lost me.

Canada is an inactive a-political democracy when you don’t care at all that your winnings came from a destruction of Canadian society by a banking cartel.

Maybe you can’t control that…and it’s good to protect the lottery “money”.

Two things:

1. Due to the nature of the system and the instability it will now cause, it’s highly unlikely your winnings are going to be untouched. Thus the call to duck, dive and diversify.

2. Protecting accidental cartel winners is hardly a
“noble social cause”, nor will it help society. Your main strategy is to form an association with the cartel.

Keep the money if you can ( I sure would if in that position living in identity-less Canada..cover your butt), but it is what it is. You’re calling it something it’s not.

If you want to talk about “hope”, that’s another matter entirely. Unrelated to spending your energy “covering your ass”.

#167 Nostradamus Le Mad Vlad on 09.18.12 at 7:09 pm

#60 Nemesis — “I’ll bite… Is today’s LeaderIllustration a BeachSide ‘candid’ of BobRennie snacking on another PropertyVirgin . . .” — Pic reminded me of when I munch down seeded grapes. All of a sudden, the seeds (bones) hit the teeth, then the juice (blood) floods the mouth!

#81 Skip — “Capitalism starts to enter is dying days. Look it’s just the away it is, every economic theory tried out eventually dies. As you can see every time they try to fix it, it just causes troubles in unexpected ways.” — Very good way of calling it like it is, and somewhat goes with #139 Victoria Tea Party’s analogy below.

#93 HalifaxEd — “We are top-heavy with a public sector dipping into a rapidly decreasing taxpayer pocket.” — Good point, so as truth hammer says, if the public service is gutted by 50% (unsure of figures), where will the extra money to run this country come from? Increased taxes at all levels is my guess.

#109 Canadian Watchdog — This is what I got here. Seems ok.

#120 Onthesidelines — “Something to keep in mind as all of this unfolds is that owning one’s own residence is far from being a necessity as, indeed, are many purchases.”

‘Sright. It’s pure greed, I wanna have this / that / or the other. He who dies with the most toys leaves nothing behind.

#137 Blacksheep — “I could not contain myself and burst out laughing, “waiting hours for hamburgers!?!?” Nothing but dirty looks. Time to go. Some people wonder why I refer to the great unwashed as Cattle. Resistance is not futile….it won’t even be attempted.”

That is the most accurate and pertinent description of STOOPID SHEEPLE I have ever come across. Thanks for the laugh!

#139 Victoria Tea Party — “This event is well-worth watching.”

Good day, VTP. Many possibilities exist in this situation, not the least of which China is deliberately letting its economy tank, the pansy-throwing stuff has been going on for quite a few years now (‘tho it has only started to recently heat up), and by slapping Japan in the face, China is goading the US to come and protect Japan.

When the time is right, China could call all its loans back, then switch to a new gold-backed currency, which would provide a little more stability than the petro-dollar.

With Soros – Obomba following China’s lead, one guess is that they are taking the US down the left path, which is somewhat anathema to most citizens. They are more interested in ‘live and let live’. As usual, it’s the money junkies, lobbyists and politicos who are dancing to the money-men’s tune.

Here, #114 EIT — “I hope Israel doesn’t attack Iran. The war drums are beating louder. This is gonna suck.” comes in, as Russia and China are certainly committed to protecting Iran, and probably Syria as well, as Russia and Syria are allies.

That’s the great thing about life — it’s completely unpredictable!
*

#168 TGS on 09.18.12 at 7:13 pm

@TheBigLewbowski

Actually giving up sovereignty to a supra-national entity would be one of the best ways to fix the global economy. We have an economy that functions on a global level and a political system that functions on a state-by-state basis, meaning that policy only leads to failed outcomes.

Imagine if Canada had no federal government, and to decide national-level things like foreign policy or economic policy you had to get all the provinces together and make them agree? That’s basically the state of the world today.

We could only be so lucky as to get a global government and abolish the old international state system!

#169 Victoria Tea Party on 09.18.12 at 7:16 pm

#152 robert

ALWAYS THE CANARY…

…in the mineshaft; aka BC’s economy.

The Interior took a major hammering during the wonderful NDP rule in the 1990s. What a disaster.

Now, under the Liberals it’s getting it in the neck once more.

Problem is, the dross up there then continues flowing down beyond Hope (BC) and, like the mighty Fraser River, right into good old Greater Vancouver and its mud-coated mcmansions and high-flyin’ condos.

Oh, the NDP will blame this upcoming winter economic melt on the potentially outgoing Liberals. Why not?

But take a look outside our beautiful province for the real reason: the already underway currency wars, launched, it seems, for one big and final time by last week’s US central bank announcement to print unlimited amounts of money until things get better down south!

Right! Some canary, some mineshaft (apologies to W. Churchill).

The currency wars have been off and on skirmishes for a few years now, but things are starting to get serious out there and little people, the 99 per centers, have to still get out of debt and stock up on stuff they can barter for food and other essentials, if things come to that (hyperinflation).

In some areas of the US boxes of .22 ammo have been a great “currency”, apparently (an old story, actually).

Anyway, to what extent such international currency earthquakes will affect the rest of us, we should know over the next year or so.

Keep your eyes peeled on the US dollar index.

It was up a bit today but since last week, when QE3 was announced, it is now trending lower against other currencies including the sick and dying euro!

QE3 will go down in history as being the dumbest move any central banker anywhere has EVER made.

Take care.

#170 Smoking Man on 09.18.12 at 7:40 pm

#155 Old Man on 09.18.12 at 4:18 pm

A Ha, know what your saying, years ago I took the Drove down from up north, took the George town line, made train friends, cuties :) offers up the ying yang. Never did anything. I have a code. Pay for them to go away.

It’s just that you take the 12:43 everyday, TV says platform 6. You see the smoking man and a few other track 5ers. But they never follow and get with the program. Getting an Iphone 5 next week, I will take some pics and post on my blog. It’s unbelievable, screw pics I will do a vid.

#171 TRT on 09.18.12 at 7:41 pm

Facts:

1) A 10% decline is nothing; A 5 year term (25yr amort.) will reduce principal by 15% in 5 years. Inflation will reduce it by 10% (based on gov figure). So 25% reduction in principal. For God’s sake do the math!! If you expect a +25% correction, then wait. Otherwise…

2) 400 Richest Americans earn more than the lowest 150 Million Americans. Some guy named Reich admits only solution is education of the 150 million. Not that type of education…the “open your eyes” type of education.

#172 jess on 09.18.12 at 7:49 pm

1964 johnson and goldwater

…”saw off he eastern seaboard and let it float out to sea .”

http://www.livingroomcandidate.org/commercials/1964/eastern-seabord

#173 Dave on 09.18.12 at 8:06 pm

#160 I believe they are wondering “where” in Toronto is the event? It’s a pretty big place with lousy public transit and traffic gridlock. Some people would like to know in order to guesstimate if they can be there (how far from work?) before it starts.

#174 Herb on 09.18.12 at 8:08 pm

#164 Old Man,

dream on, Geezer!

#175 Nostradamus Le Mad Vlad on 09.18.12 at 8:14 pm


3:12 clip US Fed is the fourth branch of the govt.; We’re #18! The US, in terms of economic freedom; Preserving the petro-dollar with WW3; Locking People Up for not paying their mtgs.? Is this what America has become? Unemployment and Hopelessness = the election. Doesn’t matter who wins.
*
Victoria Tea Party, here’s more — Chinese General Prepare for combat and Chinese Military Drills; 1:45 clip US and UK tubs now in the SoH; Low and deteriorating IQs FOX-TV and neocons; Romney, Noddin’ Yahoo and failure; Yasser Arafat was murdered, and continues to be a thorn in Israel’s side; Damn Judges Keep getting in the way; US govt. guarantees 90% occupancy rate in private prisons. What of Herr Harper’s plans? Alex Jones Case buildiing against him; Fluorideless Bottled water companies; The Corporate Takeover of science.

#176 jess on 09.18.12 at 8:20 pm

mr romney has called out the parasites…

http://www.nakedcapitalism.com/2012/09/michael-hudson-on-how-finance-capital-leads-to-debt-servitude.html

…Paying out profit as interest leaves no reportable earnings. Interest is deemed a “cost of doing business.” But it is not a cost of production. It is financial overhead. And since the 1980s, growth in this overhead has absorbed and even outstripped the rise in productivity. Instead of living standards rising, the economic surplus has taken the form of a return to the FIRE sector, mainly the financial sector – commercial banks, investment banks, mortgage packagers and brokers, and so forth. Real estate owners gained during the bubble years as property prices rose faster than the bank debt that was inflating them. But the reckless junk mortgage lending and outright fraud led to a collapse of new lending after September 2008, leaving a residue of negative equity, bankruptcy, foreclosures and abandonments in its wake.

Companies that pay out all their cash flow as interest do not pay income taxes on this diversion of revenue, because interest is a tax-deductible expense. As for the financial engineers at the top – the class that has replaced industrial engineers – they aim to get rich not by earning profits, but by capital gains. These are taxed at much lower rates. So the financialized tax system encourages speculation rather than profit-making direct investment.

Suppose that a company earns $1 million dollars of profit in a year. About $400,000 must be paid in income tax. A corporate raider will buy the company’s stockholders (equity owners), for $10 million in junk bonds. The entire $1 million dollars of profit will now be paid to the banker or the bondholder in the form of interest. The company won’t report a profit, so there is no tax payment. The financial manager will hope to increase the company’s price (to re-sell it on the stock exchange) by cutting costs or selling off its pieces to make a capital gain. This is how Republican presidential candidate Mitt Romney’s Bain Capital made money. It is “balance sheet” engineering, not aimed at raising production or living standards.

Read more at
http://www.nakedcapitalism.com/2012/09/michael-hudson-on-how-finance-capital-leads-to-debt-servitude.html

#177 Leggendario on 09.18.12 at 8:26 pm

I was at the Bank this morning and I’ve heard a realtor talking to someone on his cell phone (maybe a client) in a loud cocky voice telling the person on the phone that Saskatoon has a very robust economy and the salary has doubled in the last 10 years. I can’t stop from shaking my head that this will not end well.

He end up the conversation that ITS DIFFERENT HERE!

#178 Leggendario on 09.18.12 at 8:26 pm

ITS DIFFERENT HERE !

#179 Astute Poverty on 09.18.12 at 8:32 pm

Party on Garth, Party on Wayne

#180 John on 09.18.12 at 8:41 pm

Blacksheep wrote:

“Think contrarian on steroids. So going forward John, I would respectfully request, we attempt to enlighten the Cattle (me) with insight and solutions. Once you ‘see the elephant’ it’s impossible to ignore. We can not save the many, but with some luck, a few, may just find that seat on the proverbial lifeboat.”
——-

There are a ton of great posts, humour and everything in between on here….and I just saw this about “going foward”.

Good point. The first part of the solution for me is to stay on my belief systems. The pressure to attach identity and security to a “game” is enormous. And unconscious. I have my TV turned off for 11 months now. It has however created a more volatile state of consciousness. TV is packaged. The internet is not.

Solution means challenging those old beliefs everywhere so there’s extra space to do real self-care; the kind you can’t get in a portfolio. Good habits of all kinds, sports, no drugs, etc. being positive and supporting people open to same.

I think small town one-to-one business style will boom. People who are sick and afraid won’t be able to offer value there. And that interface is going to matter again.

Value is such an attractive thing…and if you have it..you can give it away. Pure “portfolio” as identity and security is of very low value in an unsettled and transforming world. It’s like a wall. Isolating and lonely, hoping the shoe doesn’t drop.

On the other hand, you have to acknowledge the realities of the game and play it or you get squished. Self-knowledge ( experience) improves that balance.

Relationship is going to be massive…the conduit of value in the emerging new paradigm. Networking. Availability. Exposure…good boundaries. It’s a lot of work and investment to build that. Trust. Humility…real things. Currently very unpopular.

You can’t do any of that stuff in your house in front of a TV, knowing you have a “strong portfolio”.

#181 EIT on 09.18.12 at 8:46 pm

#168 TGS

I didn’t realize there are people out there like you.

#182 truth hammer on 09.18.12 at 9:02 pm

#140 I C…….I can’t agree that being politically correct is ever the right approach…it just makes liars out of all of us.

The liberals created the concept of PC to dumb down and control the population…look at the mess we’re in now. We have a population that can’t speak the truth…politicians are forced to mis allocate tax dollars because they are afraid of appearances…..even to the point where in the case of HAM…couldn’t even point to abuses being perpetrated by foriegn nationals against Canadians of every race….the whole thing was so transparent it was pathetic…and really bad for Canada.

The PC state of mind has produced a dependant and entitled population ……..PC – Speak has become a weapon of the Liberal media to talk down anyone who wants to point to the flagrant abuses by unionsa and special intrests.

Nope……just like anything else in life…best to be honest from the get go.

#183 Snowboid on 09.18.12 at 10:26 pm

#141 An Cat Dubh on 09.18.12 at 2:50 pm…

I wonder which agent returned this one…

http://www.lexusofkelowna.com/used/2012-Lexus-LFA-Kelowna-BC/dcm/brochure3/id2397644?seo

Seriously, you are right – Kelowna will soon hold the record for the most abandoned condo developments in Canada.

I would be really ticked off if I had spent a million plus to live on the lake, only to see the homeless were now living in an abandoned project next door (which is happening on Sunset Drive downtown).

Some agent was taking a couple through our complex today and asked me what the strata council was like. I said I didn’t know (or care) as I rented. The woman almost collapsed, uttering “How many renters are there here?” I didn’t want to tell her it was more than 1/3 of the building, so I just smiled and said I didn’t know.

How stupid are these ‘greater fools’? You only have to do ten minutes research to see the prices are coming down – and will continue down.

Patiently we wait…

#184 youliana on 09.18.12 at 11:08 pm

I am a RE/MAX Realtor and I am NOT terrified one little bit… However, I find stats to be so misleading… it is unreal, prices just can’t be up in Van from a year ago, from what I see.

#185 Mr Buyer on 09.19.12 at 12:14 am

#182 truth hammer on 09.18.12 at 9:02 pm
#140 I C…….I can’t agree that being politically correct is ever the right approach…it just makes liars out of all of us.

The liberals created the concept of PC to dumb down and
…………………………………………………..
The Liberals peed my pants

#186 Patiently Waiting on 09.19.12 at 12:18 am

TRT on 09.18.12 at 7:41 pm
1) A 10% decline is nothing; A 5 year term (25yr amort.) will reduce principal by 15% in 5 years. Inflation will reduce it by 10% (based on gov figure). So 25% reduction in principal. For God’s sake do the math!! If you expect a +25% correction, then wait. Otherwise…
———————————————————

Better check your amortization schedule TRT, (or take a course in financial math), unfortunately the first 10 years on even a 25 year amortization are mostly interest, so very little principle will have been paid back after 5 years (and it gets even worse on the 30, 35, and 40 year amortizations – poor newbies will learn the hard way), and while it is true that inflation erodes purchasing power, the debt still remains to be paid in nominal terms – fail.

#187 aggie on 09.19.12 at 1:53 am

Aggie is finding out what life is like as a bottom feeding renter, now that her condo has sold.

Found a great little basement suite, landlord seemed all keen to rent to me, but then danced a phone-tag dance when it came time to meet to seal the deal, trade a key for a cheque… and then yesterday afternoon comes a text message: Sorry for the short notice, but my wife’s brother is coming to stay with us, and I only found out last weekend… .

Well, it could be worse. Completion date on my place isn’t till the 26th… key handoff at noon the next day. I’m pouring over CL ads looking for a very low budget place, so I can shake off the shortfall/closing costs debt asap and start building up that balanced portfolio!

It’s really humbling, and challenging, to have to try to explain to wary landlords why I’m looking for a place to live on such short notice. I can see in their eyes that they’re wondering why I’m interested in lowly places when it looks as if I’m used to better digs! I’d rather be interviewing for a job.

Think I’ll go buy me that wee RV sooner rather than later, so I’m never without a place to stay and don’t have to explain myself to anyone. But I’m not ready for that.

Meanwhile, my DD’s digging out the bed in her spare room (aka storage catch-all).
No room there for all my stuff. I’ve culled and culled and culled, and still have so much STUFF!! I’m torn between getting another storage locker or calling Get Junk and then finding just a furnished room. Or doing none of that and trusting that a wee, cheap unfurnished suite for little old me’n Sage will materialize in the 11th hour. Or an RV.

As always, I must say thanks to our toasted marshmallow of a host. Every one of your articles this past week or so has touched me deeply and prompted me to write (when I _should_ be doing other things). I just save my thoughts into a text file, because, well, you know how I tend towards TMI…

I just felt like sharing my tonight’s note, putting it here on yesterday’s thread instead of the front page. It’s just one example of what happens when a fool who never managed to build equity finally sees the light and tries to play catchup.

This pathetic blog is my shining beacon of light and hope.

And btw, who doesn’t love the jarring taste of a charred crust, followed by the delectable surprise of a soft gooey centre…

#188 cynically on 09.19.12 at 2:38 am

#136 Blacksheep – You missed the best, reasonably-priced burger in North America. Even the Hollywood crowd line up for an IN ‘n’ OUT burger but you’ll have to travel to SoCal for one next time.

#189 Herb on 09.19.12 at 8:28 am

#182 Truth Hammerer,

“…best to be honest from the get go.” You’re a little late to start from the “get go”, but it’s never too late to start.

So, nothing but the truth from you from here on? Heck, I’m going to miss your right wing rants.

#190 GTA Engineer on 09.19.12 at 10:53 am

For all you gold lovers out there, you may want to try drilling your gold…

http://www.zerohedge.com/news/tungsten-filled-10-oz-gold-bar-found-middle-manhattans-jewelry-district

#191 Onemorething on 09.19.12 at 9:32 pm

#77 Daniel on 09.18.12 at 3:24 am

#34 Onemorething

What is your take on the Penang market?

Even in the most desirable areas apartments are still in the $300(900rm)/sqft range.

Penang Market is a prime example of a market which will topple. I know all the guys at iproperty.com and all the developers and agents and net sales for properties at the Iproperty show in Penang were greater than those in KL. First time for everything, and for everything a price.

I wouldnt touch anything in Penang or KL, maybe JB since many in SING have just said no to rising property prices.

Condos now in KL are being heavily marketed to outside foreign investors especially the Chinese for money placement and Japanese for retirement options.

The market is at the top. Government has stepped in on speculators as well where you must put down big deposits on 2nd and 3rd properties.

You will see a downturn in the next few years but I wouldnt buy any condos as condos are the first to take a hit.