Logic

Yesterday Andrew sent me this email:

I just love your blog. Your advice helped convince me to sell my home in Ontario for a record high in the subdivision that I used to own. I took all the money and headed straight for Alberta. I’ve come across a “Deal of a life time” I think. I’m considering buying a show model town home from a developer that went bankrupt. The home was selling for $299,999. I can purchase for $269,999.  The house also as $40,000 in upgrades. The house has full Alberta home owner’s warranty and is located in Cochrane 30km West of Calgary. I would really appreciate your view on this purchase . Your advice has served me well in the past .

Last night I responded:

Why would you want to live in Cochrane? — Garth

He just replied:

Thanks Garth, I spent most of the evening asking why? Could not come up with a good answer. The only reason is greed looking for a deal. Maybe it’s wrong to be on the side  waiting for a crash, a lot of people are going to get hurt for me to get a good deal. I was lucky to get out of the market when I did. Thanks for the response, I was surprised you took the time!! and I’m glad your out of politics your too good for them and make more difference here on you blog.

Paul and Alicia rent in Vancouver. After reading this blog (they claim) they sold their utterly unremarkable house for $1.8 million, paid off the $650,000 mortgage and invested the rest, to become financially independent at age 38. She’s never forgiven me.

“Not a day goes by I don’t want to buy,” she wrote. “I know all the arguments not to, and I see the market starting to fail. There must be a dozen houses around us for sale, and nothing’s moving. But we hate this place we’re in – so small and bleak. I’m sorry, Garth, but I’ve had it. Go save somebody else.”

This week Khushi and Rick came to see me, vexed with choices. She’s a lawyer in Toronto. He’s an engineer, and they make big bucks. Saved $400,000 so far, all of it in the orange guy’s shorts. Why so much making so little, I asked? Turns out, like many newlyweds in their culture, they live in his parents’ basement. Everybody in the house knows why – to save money so they can buy a property of their own.

“So the money sits because it’s house money,” he said, “and we are under incredible pressure to buy, even though this is obviously the wrong time.” But not Khushi. She badly wants out, and a rented downtown condo for the next two years, even with a kid on the way, is cool with her. Rick is apoplectic at the thought of paying rent. “My mother will kill me.” Khushi thinks Mom might have to line up.

If there’s a thread tying these three small stories together, it’s emotion. Andrew would buy a house in a one-donkey town he’d never live in otherwise just because it looks cheap. And so greed leads him into a decision he’ll surely regret, because real estate’s easy to buy and hard to sell. It even made him gloss over the fact the guy who built the house failed financially. Duh.

Alicia’s house lust flows from hating her rented townhome. Intellectually she knows buying now in Vancouver is suicide, but doesn’t care. Of course, after she’s lost 20% on that $2 million house, things will change. The solution I proposed for her and Paul: Rent a mini-mansion in Shaughnessy or North Van and spend an extra $1,500 a month on rent for two years. Over 24 months that will cost an additional $36,000 and in 2014 when her $2 million dream house costs a fifth less they’ll have saved $400,000.

And Khushi’s exactly right. If Rick doesn’t put daylight between him and mom, he’ll be sleeping with his spreadsheets. They can invest their four hundred large in a diversified portfolio and, if they average 7%, have $800,000 in a decade and millions by retirement. Or, they can buy a house in Brampton at age 28, have no savings and a $250,000 mortgage. One basket, all eggs. Pure risk.

This pathetic blog may soon have to stop yakking about real estate, because there’s little to add. I think you can figure out what 2013’s going to bring. Steadily disappointing sales, swelling listings and eroding prices. Houses will turn illiquid in many markets as buyers do what they always do – retreat from a falling market. Don’t expect a crash, because it’s not going to happen. Instead, this housing deflation will be lengthy, insidious, relentless and destructive to middle-class wealth. Hardest hit will be those who have bought since 2010, the equityless virgins and house-heavy, cash-deprived Boomers. Plus, of course, poor BC.

There is a way out, of course. I’ll have more to say on this Tuesday night. If I can stop being so emotional.

198 comments ↓

#1 Randy on 10.18.12 at 8:53 pm

Smart goat….Could be Finance Minister

http://www.youtube.com/watch?v=dwf8o_H6WaM&feature=youtu.be

#2 TurnerNation on 10.18.12 at 8:53 pm

Garth how come you don’t argue with people on Twitter anymore?

What’s Twitter? — Garth

#3 Canuck on 10.18.12 at 8:57 pm

First!?! Looking forward to seeing you on 23rd!

#4 Van guy on 10.18.12 at 8:59 pm

Garth,

You don’t think Richmond and Van west will crash? Seafair homes are 20% cheaper than 18 months ago.
Isn’t this considered a crash?

#5 drv on 10.18.12 at 9:00 pm

Belly laugh. Prize post Garth I Love It and wholeheartedly agree! Love your writing too. You should be at the vancouver writers fest

#6 Strataman on 10.18.12 at 9:03 pm

Things have really changed here in Yale town Vancouver. People who used to harangue me about the stupidity of me renting, no longer want to talk about real estate. There is actually fear in their eyes! I showed a few the G&M artical about renting a condo is better than owning…and guess what NO argument just change the subject! :-)

#7 bradjlambofgod on 10.18.12 at 9:08 pm

I think it’s been mentioned before, but… it’s a little hard to square the day-to-day news (record household debt levels etc, unending job losses at Caterpillar, Loblaws, the Bay, Blackberry) with the fact that every blog reader has half a million sitting in a savings account.

#8 Realtor #1 on 10.18.12 at 9:12 pm

I love being right

“Don’t expect a crash, Hardest hit will be those who have bought since 2010.

I told you so and now Garth is saying it.

Prices will not reach 08/09 level.
For a crash you need a spike in unemployment

I claim victory.
What a waste of time , three years and counting

Of course prices can retreat to 2008 levels and will in some markets. The hardest hit, obviously, will be those who bought nearest the mountain top. Yes, you are a waste of time. — Garth

#9 Furst on 10.18.12 at 9:12 pm

No poem tonight but I still luv ya. Recent posts and the ones from a year+ ago somewhat contradict each other. Previously you talked about a hard crash, but now you’re saying it’ll be more long and drawn out. It’s almost as if you’re admitting that the gov has done an outstanding job in engineering a soft landing.

#10 Junius on 10.18.12 at 9:14 pm

TRT,

You said, “Some insiders have said that they knew this would be denied…as BELL wants to take over SHAW and/or merge with TELUS. Hmmm…do you think CRTC will keep nixing indefinitely?”

It appears that you know very little about a lot of things. On matters like the CRTC you are way, way out of your depth.

First of all, if there were mergers along these lines it would be Rogers/Shaw or Bell/Telus. Learn the difference between cable and telco.

Secondly, even if the CRTC didn’t stop these mergers the competition bureau probably would. Read their statement on the Bell/Rogers acquisition of MLSE and they made that clear.

The consumer won today. More consolidation is not good for anyone but the Corporate mangent and shareholders of the major corporations.

#11 mark on 10.18.12 at 9:16 pm

Prince George? Headed for the knackery?

#12 TurnerNation on 10.18.12 at 9:17 pm

But of course. Twitter is so Web 2.0. This weblog, always on technology’s forefront, is experimenting with “in-person” talks in selected Canadian markets. This ground-breaking technology combines the 3D liveliness of a living body set against a narrative of…talking. Its participants, who gather into a purpose-built room, are encouraged to view the presentation through the vibrant lens of Beer Goggles.

#13 EIT on 10.18.12 at 9:22 pm

Garth, stop talking about real estate. The banner at the top of the site reads: “Garth Turner on ECONOMICS, real estate, MONEY, and the road ahead” Everyone here wants more from this blog. Let me start. Deposit Insurance by Government should go. Agree?

#14 Questioning Calgary stats on 10.18.12 at 9:24 pm

Why is the housing industry’s lobbying even being heard?

According to the industry’s frankenumbers, prices continue to climb, so why are they lobbying? You can’t release manipulated stats to fool the public into believing that the market is stable and then kick and scream and lobby behind the scenes because you know that prices are tanking. You simply cannot have it both ways. The industry needs to tell the public the truth.

How much more can they be given? Already, the severity of the OSFI enforcement was scaled back because of their lobbying. We just went through a 12 year housing price run-up due to lax lending standards. There is already considerable housing market stimulus in place, including emergency low interest rates and cash back mortgages (soon to be axed but 5% should be 20%).

Prices need to come down as they have in the US. In many states a $15/hr. job can support a $100,000 mortgage quite nicely. Canada needs to get back to the point where the average family can afford the average house. Giving in to the demands of the housing industry and changing some of the rules back will prevent Canada from getting to a house price level that works for families now and in the future.

#15 Just Park It on 10.18.12 at 9:28 pm

I think I am more stunned of the money Khushi & Rick have saved at the age of 28 then the situation they face. Seriously, if most are posting $100K + incomes then $500K homes are really not such a big deal. Everyone seems to be either stuffing their mattresses with cash and whine what a bad situation their in…

Are there any $40K-$50K yearly salary people out there ? What gives – at first I was dumbfounded how the housing market kept roaring higher and higher while I was clipping coupons. Now, most who post are loaded with cash but are just so confused on when to buy –

How many lawyers, doctors, engineers are there in this country anyways – do they all post here ??

Hey, how did you get in? — Garth

#16 Old Man on 10.18.12 at 9:30 pm

I cannot understand for the life of me why buying a home is so important when the asset market is in the first stage of a downfall. It is tantamount that if one does not own a home they are a failure in life, as your peer group might laugh at you; yet own no home, but in 3 days could write out a cheque for $1 million.

Now for those that are renting, do not get sucked into this bubble in Toronto, and it will take a few years for the asset deflation to bottom out, as one day you too can buy a home at a discount price, and this goes for other areas in Canada as well; sit back; save your money; and buy when the time is right.

#17 Devore on 10.18.12 at 9:33 pm

I think Rick doesn’t realize he has a family of his own now that he must take care of and look out for. Who cares what mom will think? People are far too concerned with what others think of them. They will think much better if you make and own your own decisions.

#18 Devore on 10.18.12 at 9:37 pm

#4 Van guy

Seafair homes are 20% cheaper than 18 months ago.

That’s not a real loss, those are just asking prices that started way too high to begin with.

Am I doing it right? I keep losing track of the excuses.

#19 Realtor #1 on 10.18.12 at 9:37 pm

of course it can? or will it?
maybe in Cochrane Calary. Not in the GTA

The story is always changing first its interest rates going up- people who are renewing their mortgage from five years ago are getting a cheaper rate and will continue to do so well into next year.

Now its a soft landing with a bottom that seems to be 3- 5 years away.

Sellers will not sell cheap if they don’t need to too, the spike in listings are those who want to get the most for their RE , trust me they will not entertain any offers that are insulting.
They remember the 08/09 crash and how quickly it rebounded they are much more confident. There is no doom and gloom.

#20 Finally on 10.18.12 at 9:38 pm

Live in Vancouver, married, 38 years old with 26 years old wife. Sold all 3 of my properties in the past 2 years. Been renting since May 2012. Sitting on lots of cash, but planning to buy as I have a growing family. I’m thinking end of 2013. What do you think?

#21 Freedom First on 10.18.12 at 9:38 pm

I live in one of the largest cities in Canada(to be unnamed so as to protect myself from the interprovincial insults:)…….yesterday I got a flu shot from a nurse in her mid twenties. She is single and looking to buy a condo downtown as she said the price has dropped. (I don’t know how much). Anyways, I told her a bit about Garth’s blog, and also a bit about his credentials. Her reaction, she looked visibly upset that someone would challenge her judgement to even suggest she read up on the subject of RE in Canada……..oh well, Garth, I hope I planted a seed at least…..I tried. Keep up the good work!

#22 Interrex on 10.18.12 at 9:40 pm

At least Andrew is realizing the good sense of not moving to Cochrane. My buddy and his wife built out there on the windswept plains south of town for $410K for a small house w. unfinished basement on 36ft of land. Both thought “Cochrane is really nice and so much cheaper.” Bull. They burn $500 a month in gas getting back and forth to Calgary for work, not to mention the time wasted commuting. $2800 a month (before tax, utilities) for what? Constant wind and a view of the house next door that you could just as easily touch out their window? House horny ‘burb dwellers make me shake my head.

#23 Finally on 10.18.12 at 9:40 pm

#17

Agree, I don’t care what people think of me, but I care what people think of others.

#24 Nemesis on 10.18.12 at 9:43 pm

“Andrew would buy a house in a one-donkey town he’d never live in otherwise just because it looks cheap.” – Hon. GT

Strictly speaking, OldPol… there are quite a few OldDonkeys in Cochrane…

http://tinyurl.com/98qj968

And this is where they live…

http://tinyurl.com/97cta3f

#25 Ken R on 10.18.12 at 9:45 pm

The pic is priceless. Where else can you get this much entertainment and enlightenment for a few minutes of your time.

#26 Onemorething on 10.18.12 at 9:47 pm

Garth, 2013 is going to bring the start of everything we’ve been discussing on your blog for the last few years to life.

It’s tough enough coming up with new content every day so thank god for the straight talk, fitting pics and roasting so many GreaterFools!

#27 WEX19 on 10.18.12 at 9:48 pm

Friend of mine sold his one year old house, after a year of trying. (house now 2 years old, south of Ottawa)

Had 525k into it and took 485k and had to also leave hot tub and 20k in appliances. Sold it privately thankfully but, this does not even account for property taxes, interest on mortgage, buying costs, closing costs, etc.

Big losses. He was lucky to find “the greater fool.” Next phase in his sub-division opened and only 2 houses have been built all summer. One is by developer and it is bare bones and asking 515k. Good luck!

Another friend works for big lumber company in Ottawa which makes floor joists, trusses, lumber yard, etc. He says it has been the worst/ slowest year in 20 years.

I watch the Ottawa and surrounding area daily and, values have been dropping fast since last Oct. People are hanging on to high values and DOM are 6-8 months for some places. Lots of commercial store fronts empty as rent is too high for mom and pop to make it.

Funny or not funny, renters are getting wiser too I think. I’ve had no problem renting out one of my properties before. (I make about $300 per month off the place and have had two calls in the last 3 years.)
Now, I’ve had decent prospective tenants trying to tell me what they are going to pay which is about $100 – $200 less than what I’m asking. And they say take it or leave it. Not sure what to make of it.

With mortgage rule changes, should be more renters, but I think they are getting wiser then they have been in the past.

#28 Randy on 10.18.12 at 9:51 pm

Great Pic Garth….Can I borrow it for the Gay Sex Parade in Toronto next year ?

#29 Ford Prefect on 10.18.12 at 9:57 pm

#15: Just Park It

“How many lawyers etc. are there in this country…”

I practiced law for a number of years much of it family law. As a result I closely examined the entire financial picture of many families. One fact that leaped out of these examinations was that a very few people are savers and the rest are not. Families with very high incomes saved virtually nothing and others with very modest incomes saved a great deal. Just viewing these people often gave no indication whatsoever of their financial situation.

I will always remember one women who lived in an ordinary home, drove an old banger, worked at a relatively low paying relatively unskilled job and worked odd jobs outside her regular work. By her mid thirties she had saved and accumulated by wise investments well in excess of $500,000.00 in liquid assets : ie not including house, car etc.

#30 Tim on 10.18.12 at 10:06 pm

Starting to get cheesy Garth…someone lucky enough to sell at the top of the biggest bull market in modern history, yet stupid enough to consider buying now? Are these letters for real?

#31 Party On Garth on 10.18.12 at 10:12 pm

Why would you live in Cochrane?

Let’s see… Beautiful views of the majestic mountains. Half an hour drive in one direction to the most spectacular national parks in Canada and world class skiing. Half an hour in the other direction to a major city with North America’s hottest economy. No provincial sales tax. Lower income and capitol gains taxes.

A better question is why live in Caledon?

No Cowboys? — Garth

#32 Mike on 10.18.12 at 10:14 pm

Lots of logic in this post once again.

I hope you saw the Globe today Mr. Turner. I counted 4 articles that articulated opinions expressed here for many years. First time for the Globe though….it’s about time they catch up

please keep up your unselfish service to others

#33 Saskatoon-Living on 10.18.12 at 10:15 pm

You’re right Garth, there’s very little you can add to this blog regarding real estate……………………oh wait, you can add a post on S’toon real estate.

#34 Canadian Watchdog on 10.18.12 at 10:21 pm

#8 Realtor #1 @Garth

“Don’t expect a crash, Hardest hit will be those who have bought since 2010.” “Prices will not reach 08/09 level.”

Post Date: 14/10/2012

CIBC: Pre-Legal Real Estate Counsellor

JOB PURPOSE
Reporting to the Manager, the incumbent is responsible for working seriously delinquent mortgages or other real estate secured products prior to engaging our law firms to formally engage power of sale, foreclosure or other legal remedies

We don’t have foreclosures in Canada. It’s different here. Right guys?

#35 Bottoms_Up on 10.18.12 at 10:22 pm

#142 Herb on 10.18.12 at 12:52 pm
———————————————
Thanks Herb I appreciate the response.

#36 Old Man on 10.18.12 at 10:23 pm

#21 Freedom First – am hoping with this nurse that no other seeds were planted lol.

#37 Gregor Samsa on 10.18.12 at 10:28 pm

“Why would you want to live in Cochrane?”

Ha, I love this response. Cochrane is the soulless suburban wasteland to end all suburban wastelands. If the cookie cutter, row upon row of shacks in outer Calgary is a bit too much culture for you to handle, you move to Cochrane.

#38 Uwinsome on 10.18.12 at 10:34 pm

Why the subtle change in your tone Garth? You used to use words like toast, done, crash, cascade, burst…

Not too long ago, you talked about a 30% correction, more in places.

Now, you seem to be saying a crash won’t happen. Just a slow tedious 1/5 reduction that might take years. Hell, this pathetic blog may even have to stop taking about real estate you say.

Not so fast fella. Now you’ve got some explaining and clarifying to do.

#39 Burnt Norton on 10.18.12 at 10:41 pm

Hi Garth. I for one really, really appreciate the bone-jarring, head-banging repetitiousness of this blog’s message. It well may be the only antidote to the RE zombie KoolAid. These folks, I might presume, are confusing personal security with home ownership. I know because I’ve been there, hit rock bottom, got the T-shirt, made it through RE zombie rehab and have been RE sober for around 6 months now. Amen.

#40 YYC on 10.18.12 at 10:50 pm

Cochrane is a n older old town so at least you are getting some of that “small town” living. Much better than Airdrie, which is just like another Calgarian suburb, but 25K out of town. A real hole. Cookie cutters and big malls, yuck.

But in the end it make very little financial sense to buy there to save money. You only get a 10 percent discount, which you will surely spend in gas and car maintenance. I don’t understand why people move there.

Not to mention that Alberta is not just yet correcting. Just wait another few months and things should unravel here too.

#41 John in Mtl on 10.18.12 at 10:52 pm

I just spent a really great evening with journalist Chris Hedges today, he was a guest speaker at our university here in Mtl. The whole audience burst out laughing, in shame really, when he mentioned that us Canadians seemed “too stupid to learn a lesson from the Americans” concerning housing and money/economic matters; and that we were essentially repeating the same mistakes that will invariably end the same way.

It was almost to be expected, given our current federal government and the way the MSM and our other supposedly good institutions feed us propaganda…

For those of us who follow Mr Hedges’ writings, the conference will be on CUTV shortly. http://cutvmontreal.ca/

John

#42 eviee1973 on 10.18.12 at 10:52 pm

As a new arrival to Calgary, Cochrane would be a neat place to live if you worked in the NW section only. Crowchild Trail is now four lanes to Cochrane, and the C-Train is getting closer with a new station to open in Tuscany in the next year or two. Real estate is no deal there though, and as previously mentioned expensive transportation costs to work in Calgary, plus the gridlock once you hit the city limits. I can see my apartment complex from my place of employment, yet a half hour drive is not unusual to work.

#43 renters rule on 10.18.12 at 10:55 pm

@Realtor #1

non-new condos have reverted to 2005 prices or less; new condos (new in 2009) have reverted to their 2009 prices…and we are barely into this correction…. it is going to be very very ugly….Based on friends’ experience who are trying to sell. Buyers have evaporated, place is only worth what it will sell and CLOSE for….

you are a very deluded realtor….. multi-residential in Van/greater Van will revert, over time (what, 3-4 years?) to 2003 prices… maybe lower…..

#44 Smoking Man on 10.18.12 at 10:56 pm

Garth,

I expect that we’ll soone see a spicke in sales emanating from Victoria that will sweep east and drive prices higher.

The machine wants it, and what the machine wants the machine gets.

Although none of your tichers ever taught you that.

#45 T.O. Bubble Boy on 10.18.12 at 10:57 pm

Toronto may crash last, but it will crash.

Rob Ford is still the mayor, which proves this city is a little “slow”.

#46 T.O. Bubble Boy on 10.18.12 at 11:00 pm

“Greater Vancouver realtors are now forced to quit and find new jobs”
http://whispersfromtheedgeoftherainforest.blogspot.ca/2012/10/thurs-post-2-vancouver-newspaper.html

#47 young & foolish on 10.18.12 at 11:01 pm

Hey, I thought people can make money in Real Estate irregardless of market conditions.

#48 TimV on 10.18.12 at 11:04 pm

Ah shawks, let’s have a big group hug for Garth, with tears and all.

#49 T.O. Bubble Boy on 10.18.12 at 11:04 pm

Realtor humour for you… “Houses sell so quickly in Toronto, ‘House For Sale’ signs are only used as antiques”:
http://www.qwac.ca/2012/10/this-house-for-sale-sign.html

#50 Inglorious Investor on 10.18.12 at 11:12 pm

“Insidious” indeed.

In previous comments I opined that I would not be surprised if, rather than a conspicuous crash, Canada’s housing market experienced a slow-burn rebalancing, during which house prices, masked by inflation, might not correct very much in nominal terms, but would be surely devalued in real (inflation adjusted terms), making RE a dead investment for years to come (at least in terms of capital appreciation).

This did not rule out a sudden, initial drop, as we are seeing, and as Garth predicted. But crash events don’t tend to happen while previous crashes are still fresh in the public consciousness. We were almost as reckless as the US (mortgage fraud was rampant there) but we could escape a major crash event (perhaps not in condos) because we had the American experience to learn from.

Perhaps F’s seeming sacrifice of the housing market is the lesser of two evils, and while it will hurt some (and protect the banks––always the priority) it may just be enough bad-tasting medicine to prevent the RE death that so many expect.

Furthermore, if the global economy accelerates sufficiently and before a crash could take hold, it would support the housing market. Therefore, the largest threat may not be a recession, but the inability of Canadians to, in aggregate, carry the current, crazy debt burden. At some point, not even free money will be enough to keep the game going. But if we get a severe recession along with the debt? Oh boy, I hope your airbags are working properly.

BTW: Interest rates are the price of money. Price reflects demand. Ever wonder why interest rates are so low?

#51 Angel on 10.18.12 at 11:13 pm

If Alicia wants small and bleak she should come check out our place. The windows are old, the kitchen needs a total demo, the ceiling is two different colours, the appliances are all original, so circa 1980s, the wiring is wonky and the livingroom lights don’t work 80 percent of the time, the people in the downstairs suite slam their doors at 10pm every night and wake my kids up…and I still can’t think of a good reason to buy a place. I can think of a good reason to redecorate or maybe move, but not buy.

It amazes me how many of my friends I’ve talked to that have bought half-mill homes weren’t planning for them to be a long-time home. Less than five years and already the walls are closing in, they’re thinking of their next place. At least one recognizes that they’re destined to get screwed in the coming crash. Just surprised in talking to friends how little planning went into buying a house, almost like an impulse thing.

#52 Ronaldo on 10.18.12 at 11:14 pm

#2 Turner Nation –

”Garth how come you don’t argue with people on Twitter anymore?

What’s Twitter? — Garth”

Garth realized that twitter is for twits. Who follows that stuff anyway?

#53 THE CELIAC HUSBAND on 10.18.12 at 11:16 pm

Bulls make money.
Bears make money.
Pigs get slaughtered.

I am going to open a bar in my retail space for all those who need a place to drown their sorrows.

http://theceliachusband.blogspot.fr/2012/04/retail-space.html

#54 Junius on 10.18.12 at 11:18 pm

#41 John,

I am jealous. I think that Chris Hedges is one of the most important thinkers of our time. I wish I was there.

Thanks for the report.

#55 Ronaldo on 10.18.12 at 11:19 pm

”Of course prices can retreat to 2008 levels and will in some markets. The hardest hit, obviously, will be those who bought nearest the mountain top. Yes, you are a waste of time. — Garth”

There are many places in Canada where prices have not come back from their peaks of 07. Alberta for example.

#56 Boombust on 10.18.12 at 11:20 pm

“Live in Vancouver, married, 38 years old with 26 years old wife. Sold all 3 of my properties in the past 2 years. Been renting since May 2012. Sitting on lots of cash, but planning to buy as I have a growing family. I’m thinking end of 2013. What do you think?”

Me?

Well, since you asked, I think you’re full of shit.

#57 eagle eyes on 10.18.12 at 11:25 pm

If a $2 million dollar home today is expected to drop 20% to $1.6 million dollars, then I would say that the people waiting on the sidelines for a crash better stop waiting. Listen, ONE MILLION SIX HUNDRED THOUSAND DOLLARS is a lot of money to perhaps just me. But realistically, I don’t think that I will EVER be able to afford a house in that price range, and I can safely say that many people who I know cannot either. My family income is $70,000.00 on average (unless the economy tanks and it will be less). And until the prices can come down to $400,000.00 for a decent home (not a shoebox), I will not be buying a house.

#58 Canadian Watchdog on 10.18.12 at 11:29 pm

#50 Inglorious Investor

“Canada’s housing market experienced a slow-burn”

That is impossible if the insurance limit isn’t lifted. Lenders have to continuously lend a greater amount of loans just to keep the market going.

#59 Mr Buyer on 10.18.12 at 11:30 pm

Crash, no crash, crash, no crash. There will not be a soft landing irregardless of the language that is used to describe what is now upon us. Buying now is insane. Once people understand they will no longer be able to withdraw equity from their homes on an annual or even 5 year basis I think the mindset will be dramatically altered. Good luck with the whole engineering of people’s expectations thing. It is a tricky business at best, an absolutely effortless endeavor at times (often requiring large amounts of time, influence and money) and completely hopeless task at others. I personally like collapse, like and over inflated dirigible buckling under its own weight as it meets the ground. Always remember the Real Estate types are signing all is well from every venue even as I scratch this nonsense out a world away. I think describing what is upon us as a crash is an appropriate countermeasure. No one should be buying until the wheels well and truly fall off. There is no reason to expect otherwise. 40k off a hugely overpriced house is not the deal of a lifetime. They will come sooner than later. Just wait for it.

#60 T.O. Bubble Boy on 10.18.12 at 11:33 pm

F is going all 2008 on us… completely missing and/or misleading on his economic forecasts (again):
http://www.huffingtonpost.ca/2012/10/18/canada-economy-flaherty_n_1980246.html#slide=1644184

In case you forgot, here was his September 1st 2008 prediction (no recession):
http://www.canada.com/story_print.html?id=846259ec-de91-471e-a216-c8d776cb82a7&sponsor=

And, then his October 24th 2008 statement (no recession):
http://www.theguardian.pe.ca/Economy/2008-10-24/article-1296767/Flaherty-says-it-again-rough-going-but-no-recession-for-Canada/1

And, then November 24th (we’re in recession):
http://www.reuters.com/article/2008/11/24/financial-canada-recession-idUSOTW00018720081124

And, January 12th 2009 (action needed to overcome recession!):
http://www.thestar.com/News/Canada/article/569524

#61 Hugh Jasz on 10.18.12 at 11:37 pm

#45 T.O. Bubble Boy on 10.18.12 at 10:57 pm

“Toronto….slow….Rob Ford”.

I’ll concede that Ford is a buffoon and, at best, a mediocre mayor.

That said, which of his opponents was going to do better for our beautiful city at the centre of the universe?

Joey Pants? Rossi? Smitherman? Any of the fringe candidates?

I dunno. I really didn’t find any of those offerings very inspiring, so I sided with what I know – the fat, angry, straight, binge-drinking, domestic dispute causing, “mangia cake”.

Dear Fordo’s been a tiny bit worse than I expected, but really, we were stuck with choosing a kick in the nuts versus a shit sandwich.

Sadly, the fact that he’s only been a tiny bit worse than expected may get him my vote next round as well, but here’s hoping we actually get someone inspiring to run against him.

#62 Guy_in_Regina on 10.18.12 at 11:42 pm

Andrew! 30KM west of Calgary is paradise! Buy the townhouse, and a season lift pass.

#63 Inglorious Investor on 10.18.12 at 11:45 pm

#34 Canadian Watchdog on 10.18.12 at 10:21 pm

“CIBC: Pre-Legal Real Estate Counsellor”

Ha! I love it! Here’s an alternate job description:

“Incumbent must have the ability to be a real, persistent pain in the ass, and be able to carry a very threatening tone, as needed, when dealing with deadbeat home owners who aren’t paying on time (the pricks). However, the right candidate must also be able to switch to a more conciliatory tone intended to elicit feelings of guilt and stir up a deep-seeted sense of moral obligation to pay your banker masters. The Counsellor’s success will be based on how many cases do not have to be referred to our legal department (real lawyers cost real money) such that we can get our freakin’ money for minimal cost. Underworld experience, familiarity with terms such as “the vig”, and experience negotiating with spoiled, demanding, over-sugared children in public settings are definite assets.”

#64 vonder bra on 10.18.12 at 11:56 pm

Yup….USSR is back on track alright…

“In response to a request from the Senate Budget Committee, the Congressional Research Service (CRS) reported that federal welfare spending reached three-quarters of a trillion dollars last year. When added to what the states spent on welfare, another $300 billion, total government welfare payments in 2011 hit $1.03 trillion. More unnerving is that the report from the CRS didn’t include spending on Social Security or Medicare.”

http://thenewamerican.com/usnews/politics/item/13275-government-welfare-payments-top-$1-trillion-for-the-first-time

#65 John in Mtl on 10.19.12 at 12:00 am

#54 Junius

I am jealous. I think that Chris Hedges is one of the most important thinkers of our time. I wish I was there.
.
.
Personally, I never dreamed I would ever meet the man in person and get a chance to ask him a question. I could not miss this opportunity. Totally agree with you that Indeed, he is one of the most important thinkers of our time. I said to him, “thank you for sticking your neck out for all of us… and raising awareness of what’s really going on”.

John

#66 Bast on 10.19.12 at 12:13 am

Ha! My llamas live near Cochrane, but I live a stone’s throw from downtown Calgary. That’s the way we roll in Alberta – livestock outside of city limits, humans near the action. Er, except in July during Stampede, when the whole thing gets terribly muddled up and really quite messy.

#67 PapaCub on 10.19.12 at 12:15 am

What?! No crash?

I think I’m gonna go hunt me some polar bear. I hear their master is finally capitulating.

#68 Rainman on 10.19.12 at 12:26 am

“Live in Vancouver, married, 38 years old with 26 years old wife. Sold all 3 of my properties in the past 2 years. Been renting since May 2012. Sitting on lots of cash, but planning to buy as I have a growing family. I’m thinking end of 2013. What do you think?”

Me?

Well, since you asked, I think you’re full of shit.

I agree – full of shit.

#69 Bert on 10.19.12 at 12:38 am

A post on Saskatoon would be a good addition to this blog. Seriously, Garth, you should take a knowledgeable building inspector through that city. I’d estimate that at least half the older properties on the market wouldn’t pass building code in other provinces and a lot of the rest are just squeaking by yet they’re selling for upwards of 500k.

#70 Soylent Green is People on 10.19.12 at 12:44 am

Nadine Lumley snip snip: Dr. Shiv Chopra was a drug company insider, and also worked for what is now Health Canada — the Canadian equivalent of the FDA. He is uniquely qualified to explain why no flu vaccine has ever worked, and that swine flu and avian flu are nothing more than hoaxes.

http://www.youtube.com/watch?v=ywyiwNgko30&NR=1

http://news.yahoo.com/ex-official-arrested-over-swine-flu-vaccines-111741414.html

.
.
.

#71 Soylent Green is People on 10.19.12 at 12:46 am

Whoops ‘ dis one better

………….

Dr. Shiv Chopra was a drug company insider, and also worked for what is now Health Canada — the Canadian equivalent of the FDA. He is uniquely qualified to explain why no flu vaccine has ever worked, and that swine flu and avian flu are nothing more than hoaxes.

http://www.youtube.com/watch?v=ywyiwNgko30&NR=1

http://news.yahoo.com/ex-official-arrested-over-swine-flu-vaccines-111741414.html
.
.

#72 Ex-Edmonton Mortgage Broker on 10.19.12 at 12:54 am

Cochrane and Balzac. There, i said it.

#73 earlybird on 10.19.12 at 12:55 am

I thought a slow deflation in Canadian housing would be the most likely scenario….but if too many humans panick all at once, it tends to overshoot to the downside…

#74 Punnoval on 10.19.12 at 12:56 am

Teaser mortgages live!

Shaughnessy on Lions Park: $769/month for a 1 br $255K

http://www.liveattheshaughnessy.com/

By normal calculations of the mortgage with 5% down with 3.09% interest on 25 year amortrization this should be $1154/ mo + insurance + condo fees + taxes.

For all GT fans of Exchange Traded funds:

http://etfdailynews.com/

Now that GT sez that US doesn’t doctor their employment figures, take a look at this one courtesy of the St. Louis Fed.:

http://etfdailynews.com/2012/09/09/what-is-the-real-unemployment-rate-indexsp-inx/

#75 Seriously? on 10.19.12 at 12:57 am

There is a restaurant in Cochrane that makes the best pie in Canada.

Seriously.

It’s right next to the ice cream parlour that has the best ice cream in Canada.

Seriously.

Still wouldn’t live there. I mean how much pie and ice cream can a guy eat?

Seriously?

#76 Burnt Norton on 10.19.12 at 1:02 am

Dear DA / lame winky face guy: 

I gotta bit of spare time tonight, kids in bed and all that, caught up on the blog comments over the past few days. Noticed your content. 

Shelter salespeople earn money by assisting clients with property transactions.  Good for them.  Now you recently raised the concept of fiduciary duty. Fine. What I take issue with is the disingenuous implication that this so-called fiduciary duty trumps the shelter salesperson’s impetus to earn money, particularly in situations where the salesperson is the primary breadwinner for his / her family. 

My lawyer recently told me that out of her clients that are shelter salespeople, the ones who are the primary breadwinners for their families are still putting a positive spin on the RE situation here in Raincouver. On the other hand, the ones who are secondarily supplementing their families’ income are ‘honestly’ advising clients to hold off on buying, particularly for first-time buyers or young families.  Incidentally, the same lawyer does a lot of shelter transaction work and she said that deals are slowing to 2008-2009 levels. My own realtor is the secondary breadwinner for his family and he agrees that now is not a good time for me to buy. Even though it would earn him a lot of money if I did.

It’s human nature, DA old pal, no need to justify or absolve yourself of it.  If I built a career and supported a family by helping clients buy and sell shelter then, sure, ethical guy that I am, I would be inclined to steer clients toward a deal that, based on my wealth of experience, professionalism and fiduciary pride, I thought to be in their best interest as far are the transaction itself is concerned. But would I sit them down and go through a rent vs buy spreadsheet and spend time advising them that now is a very risky time to buy and suggest to them ways to resist the pressuring to buy that they get constantly from their spouse / friends / parents?  Would I do that knowing that it would make it harder for me to pay my own mortgage and car payment and food bill and buy my wife that necklace for our anniversary and pay for that trip to Hawaii next spring?  Would I do that even if I thought deep down that my client might soon really regret buying a house even as he blindly wants to buy one now?

What do you think?

#77 lookoutbelow on 10.19.12 at 1:04 am

It’s getting boring, Garth. We all know now that it’s going to CRASH HARD in BC.

Time to move on from the earthquake to the resultant damage. Suggested topics, “The Effect of Declining Real Estate Values on the Broader Canadian Economy” or “How F and C engineered the great Canadian Housing Boom and Bust”.

Maybe, it will be different here. Watch out for the aftershocks. There will be many.

#78 Vangrrl on 10.19.12 at 1:06 am

For crying out loud Alicia lives in Vancouver. How long has she been here? It’s bleak no matter how pretty your digs are. Unless you just don’t step outside at all for the next 7 months, maybe 8…

#79 Tony on 10.19.12 at 1:07 am

Andrew seems to be clued out on Alberta. You simply go on mls and offer half the asking price until you find a seller at your price. That should take a couple of hours tops. Andrew should heed this advice and save himself at least 100 grand if he still wants to purchase a townhouse.

#80 house burden on 10.19.12 at 1:13 am

#8 Realtor #1 on 10.18.12 at 9:12 pm
===========================

You ever seen an avalanche Mr Realtor. First the snow piles up higher and Higher slowly and softly piling up.

Until some trigger click and BAM!!!! The Snowslide begins and swallows everyone and anything in its path.

With real estate the SALES are beginning to pile higher and higher, The higher it builds the worst the collapse. Don’t look at the here and now, wait a few years from April 2013 before you claim your victory.

#81 Tony on 10.19.12 at 1:16 am

Re: #56 Boombust on 10.18.12 at 11:20 pm

The safest thing to do is move to another city where real estate won’t fall in price. That way you won’t give any or all your money back by doing something stupid. No telling how many years or decades Vancouver will fall in price. Japan has been falling for 21 straight years so Vancouver could fall at least that long or longer.

#82 Devore on 10.19.12 at 1:29 am

#22 Interrex

Used to be people moved out to burbs for the space. The large back yard, the deck with a BBQ and firepit, a garden, etc. Now they move because it’s cheaper than in the city, and not a whole lot at that. But that’s just short sighted thinking, as you say, they will burn tons of gas commuting, put miles on their vehicles, and waste time on the road.

Time, is the only thing you cannot buy for any amount of money, it’s also the only thing that’s free.

#83 NoName on 10.19.12 at 3:37 am

http://www.telegraph.co.uk/earth/energy/fuel/9619269/British-engineers-produce-amazing-petrol-from-air-technology.html

thinking outside of the box…

#84 betamax on 10.19.12 at 4:30 am

#8 Realtor #100,001

The inability to read and shoddy logic may get a pass in a two-week realtor course, but it doesn’t fly elsewhere.

Speaking of job loss, what are you going to do next?

#85 TRT on 10.19.12 at 5:11 am

http://www.ottawacitizen.com/business/Changes+pensions+will+create+tier+worforce+public+service/7409944/story.html#Comments

As a Boomer Garth, do you condone this?

Cannibalize the young. Yes, that is the Boomers legacy. We will make the young work 5 years longer. Anyone who is young on this blog wake up!

#86 John on 10.19.12 at 5:41 am

“Paul and Alicia rent in Vancouver. After reading this blog (they claim) they sold their utterly unremarkable house for $1.8 million, paid off the $650,000 mortgage and invested the rest, to become financially independent at age 38.”
———-

Since it’s a no-no to openly and explicitly examine the world economy and it’s connection to the Canadian real estate bubble, maybe examining the logic directly associated with this deal will help. Real life examples beat theory.

Without saying or looking at what the factors are that caused their house to triple in value, we can say that the value doesn’t reflect the dynamics of the community where the house is located. Why? A normal, young, working, educated, professional, value-offering middle class person, earning and saving without speculation-related earnings or another “tripled” property bought in 1995 could not purchase the home. That person no longer lives in a “community”, because it is now hostile to his interests. Fair enough?

If a regular person can’t buy the home, but can when it’s “value “reverts to the mean”, how would this happen? What would the world outside Vancouver have to be like in order for this to occur? What local and international dynamics would have to be going on?

Finally, what would the possibility be of a “liquid” investor being “financially independent” in that scenario. You’d have to have had 10’s upon 10’s of thousands upon thousands of a narrow demographic of middle class casino winners cash out and continue the ride “up”….and also enjoy an at least somewhat stable economy.

I realize we’re not ready to talk about how the equity was earned, but how about “financial independence” for the casino winner who got liquid? Blessed are the liquid, right?

Break down the risk associated with living in a community reverting to the mean on housing prices, where the money sucked out is back in the casino…”invested”. The money amounts included. Percentages. Earnings. Demographics of the “winners” and the sustainability of their entitlement. Spin-off economy removal. Job numbers and the like. We could even pretend that the world economy isn’t the main actor in Canadian real estate. Thus the debate could still inch forward anyway.

It doesn’t have to be fancy…but at least get started on some risk analysis. Financial independence rests on that.

Perhaps the challenge is too…uh…logical?

#87 John B. on 10.19.12 at 6:04 am

I think you can still continue to write about real estate. It is not going in the same direction everywhere (Market Watch: Strong Average Price Growth in September). I´m glad Vancouver started to cool down, but other provinces have not hit their peak yet.

Regarding to the first story, I think it is not a bad deal. As somebody has mentioned in the discussion, the place is beautiful and there are plenty things to do, while you can still reach the city. On the other hand, buying just because it is a good deal is stupid. The house would not have any real VALUE for him afterwards and he would regret his opinion.

#88 Frank on 10.19.12 at 6:37 am

I always felt there would be no crash but a soft landing, but according to you we will have price deflation for a long time to come. If that is the case that prices will only go lower for years to come, when will it be a good time to buy? I think you have put a lot of people in a bind and are now running around like chickens with their heads cut and not sure what to do. Everyday these chickens read your blog hoping that somehow you will announce than in a few days you can buy your dream home for half the price.

That’s a chicken problem. I’ve consistently predicted a 15% national price decline (we’ll probably get there in 2013), following by an unknown number of years of flatlined or eroding values, depending on the market. You want simple? Watch Fox News. — Garth

#89 Confused on 10.19.12 at 7:11 am

I counted two “irregardless” in the first 60 comments today, this is my limit for the day…must stop reading and turn on the boob tube.

#90 Picasso on 10.19.12 at 7:17 am

When you read about 20 something’s owning real-estate and see them driving new cars you know there’s a big indebt issue.

#91 Victor on 10.19.12 at 8:13 am

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/downsizing-to-condoland-why-its-best-to-rent-not-own/article4619669/

Let’s understand a couple of things about the great migration of Canada’s seniors from their family homes into condoland.

Point one: A condominium offers many pluses to a couple that want to downsize, including a wide range of locations to choose from, pleasant surroundings and amenities such as underground parking and fitness facilities.

Point two: Condos are best rented, not owned.

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

MSM finally beginning to concede the obvious.

#92 Nukester99 on 10.19.12 at 8:26 am

@Confused

Literally only two irregardless comments? That sounds unpossible.

#93 Gypsy Kid on 10.19.12 at 8:27 am

Eagle eyes, good for you for being logical. You dont have to own a house to have a home.
Years and years ago when my husband and I first found our rental was our happiest day. Even now I look back and remember my first home with my husband very fondly. We out right own a beautiful house now but I’m not any happier in terms of “owning” vs. renting. Carefree renting because we had really good landlords…

#94 };-) aka D.A. on 10.19.12 at 8:27 am

Real estate – listen to the pros!

How does today’s 30 year old retire at 55?

and

Flipping 101 – Is it time to quit your day job?

Here

http://www.castanet.net/edition/news-story-82044-1044-.htm#82044

Have fun.

#95 Jeff in Moose Jaw on 10.19.12 at 8:40 am

Hey Everyone,

So the guy sells in Ontario to live in Calgary, talk about taking the money and run.

I watched this Canadian report called “The Bubble”.
Found it throught the G&M investing section.
Talks about our debt.

http://www.cpac.ca/eng/programs/our-times/episodes/bubble

#96 T.O. Bubble Boy on 10.19.12 at 9:05 am

The inflation rate is only 1.2% now?
http://www.ctvnews.ca/business/canadian-inflation-rate-stays-at-1-2-per-cent-statscan-1.1002072

So, throwing your money in the Orange Guy’s Shorts (now Scotia’s shorts) actually beats inflation?

ok – not really beating inflation after tax is taken off, but some of the higher-rate savings accounts (Ally, etc.) would come out ahead.

#97 };-) aka D.A. on 10.19.12 at 9:26 am

#76 Burnt Norton on 10.19.12 at 1:02 am

1.) I wouldn’t say I am the principle bread winner in my household as my better half earns a respectable amount of income as well. So the pressure for me to ‘bring home the bacon’ is not such that it would motivate me to do something do something I ought not.

2.) Our home is bought and paid for and our children are now grown and under roofs of their own so our monthly living costs are… minimal. I am under no external pressure of any consequence that compels me to tell someone to do that which benefits me more than them.

3.) I have not endeavoured to “put a positive spin on the RE situation” anywhere as your lawyer says of many. I have most certainly offered evidence of a market contrary to that SPUN on these blogs.

4.) It is for each individual to decide for themselves what they think the market is and where it is headed – I’m just offering information which balances that readers here might look at the situation more objectively. I deplore anything too one sided as this blog tends to be. While my participation here has often been criticized I will continue to endure and provide information that some, even if it is but one, might find useful in arriving at their own conclusions.

5.) Your comment;

But would I sit them down and go through a rent vs buy spreadsheet and spend time advising them that now is a very risky time to buy and suggest to them ways to resist the pressuring to buy that they get constantly from their spouse / friends / parents? – Burnt Norton

Is one in which you would be telling your client what to do. Do you really believe it is correct to tell someone what to do? I think not.

I think it is much better to provide information that a client can make their own decision. Your advice might be wrong. Imagine the fallout should your direction end up costing your client tens of thousands. You don’t know the future and neither do I. It would be reckless to even insinuate otherwise.

By even ‘advising’ your clients “now is a very risky time to buy and suggesting to them ways to resist the pressure to buy” is putting them under pressure not to. That is not for you to decide. You are embarking upon a slimy sales tactic in doing so. You are ‘closing’ them on an action plan of your design not one they came up with themselves.

Don’t you realize what a hypocrite your comment divulges you to be? Were you a REALTOR, by your comments, you disclose yourself likely to be every bit as deceitful as you accuse so many others of being – yours would simply be a different agenda but one with every bit as much potential of doing your clients harm. It is NOT for you to decide what your client should do. It would be your job to help them make a decision for themselves by providing all the information they need to make an informed decision even though some of that information you might not agree with but you clearly believe they might want to know about.

6.) I could most certainly increase my hourly rate by ‘closing’ clients on a purchase or sale but that would be wrong no matter how right I thought the advice was for the client. It is my fiduciary duty to provide as much information as possible that my principals can make an informed decision for themselves. It takes more work to do so but it is the right thing to do for them and for me.

What do you have to say to that Mr./Mrs. Norton?

#98 Mixed Bag on 10.19.12 at 9:29 am

Rick – rent the condo, and tell the parents that you bought it. Problem solved.

(What, are they going to look over the paperwork now?)

Just make sure you get used to saying monthly expenses instead of mortgage or rent.

Great post Garth, thanks.

#99 futureexpatriate on 10.19.12 at 9:34 am

I think there will be a crash in BC.

#100 };-) aka D.A. on 10.19.12 at 9:38 am

Further to my preceding comment, as one ‘in’ the business I can honestly say far, far more of my colleagues are of similar opinion and practice to that I expressed than not. Yes, just as in any business, there are a few bad apples I have come across. Buying and selling real estate is a big deal… chose your agent with care – even if that agent might be yourself.

Busy day today so… Hasta Mañana

#101 Islander on 10.19.12 at 9:39 am

#36 Old Man
Quit it, or at least get an Oldtimer’s(sic) assessment.

#102 Ralph Cramdown on 10.19.12 at 9:44 am

#94 };-) aka D.A.
How does today’s 30 year old retire at 55?

That’s a great article, DA! The author sets a goal to retire in 25 years with $2MM in assets and $100k in income, assuming an inflation rate of 3%. He doesn’t explicitly say whether he means $100k in 2012 dollars or in 2037 dollars, but, since his calculations don’t deflate these numbers, his answer is in 2037 dollars. That’s income of $48,000 from a portfolio worth $1.1MM in today’s dollars. See you at the slots! P.S. If you want to check his calculations, just click where it says “click here” — oops, no link! Like most other realtors on the net, he probably just stole this story from somewhere else without attribution.

#103 Goddess of Kamchak on 10.19.12 at 9:50 am

I’m not the brightest bulb on the tree but do you ever have a lot of dumb people writing to you!
Get it through your heads people: 2012 has no resemblance to your grandparent’s time.
Unless you inherit a house, unless you are so loaded it doesn’t matter OR until the prices are less than 4 times your annual salary, you are an idiot to buy a house.
Many people are still under the illusion that a house equals stability. How many times do you have to be told: it does not. Life is difficult enough. Have some fun, work with the less fortunate, mentor a youth, take the Orient Express. Embrace the new economy. Home ownership is highly overrated at the best of times. Use your imagination. There are a million things that are better than worrying about gutters and new kitchens. That’s all.

#104 Doug in London on 10.19.12 at 10:13 am

My comments to Paul and Alicia who sold their house for 1.8 million, with a net gain of about 1.3 million. Why are you still renting a pitifully small place, with a high rent cost, in Vancouver? Why not move away to some place where the cost of renting is cheaper, retire with the money you’ve made, and buy a house only after values correct?

#105 Inglorious Investor on 10.19.12 at 10:20 am

#58 Canadian Watchdog on 10.18.12 at 11:29 pm

“That is impossible if the insurance limit isn’t lifted. Lenders have to continuously lend a greater amount of loans just to keep the market going.”

I don’t know… Do you really think it’s that simple?

Obviously there are a number of downward pressures on sustained growth:
• debt levels
• tighter credit standards, especially for first-timers with no money
• home ownership saturation (is 70% the natural limit?)
• if a severe recession kicks in, then, as I said, fuggetaboutit

I have always figured that the main reason F changed the rules (again) was because of the above points. I see it as a move to protect the banks. Their mortgage originations may slow down, but at least if they can avoid a crash they can protect the tremendous cash flows they can now generate for decades given that 70% of households now own a home.

It’s the lesser of two evils. Certainly protecting what they have is better than risking a US-style debacle just to eek out a few more mortgages from high-risk buyers.

#106 Van Isle Renter on 10.19.12 at 10:22 am

Meanwhile Up Island:

House listings have exploded, prices are tumbling and rental listings have too. Suddenly the landlords are willing to give moving allowances and free rent just to have someone in the place.

An acquaintance of mine is renting a water front house and the lease is up. The landlord (gorged on Vancouver and Whistler properties) is unable/unwilling to sell anything and has offered him a 70% cut in rent just so the place will stay occupied by a neat and reliable renter.

I guess the landlord is concerned about it becoming a grow show.

#107 jess on 10.19.12 at 10:24 am

fine print turns more than teeth brown

AMY GOODMAN: When you’re talking about the fine print, just go through example after example, as you did your research over these years, of how people are robbed blind and how you can fight back. But give the specifics, David.

DAVID CAY JOHNSTON: OK. Well, and indeed, one of the things I do in this book is show various ways that you can fight back about this. The pipeline industry, let me go back to them. During the Bush administration, they got an administrative rule passed. They created something that didn’t exist in the law in terms of hearings, so they could have one-sided contact with the commissioners—the industry could—that allows the pipeline industry to collect from their customers—and they’re all captive customers—the corporate income tax. But pipelines don’t pay the corporate income tax, because they’re partnerships. And there’s a court case that shows this increases their profits as much as 75 cents on the dollar. So if you’re going to earn a dollar, you actually get a dollar and 75 cents in your pocket at the end of the day if you own one of these.

Well, the—I wrote a piece in a little publication called State Tax Notes. They were going to try and do this on the state level in California with something called the SFPP pipeline, which is a descendant of the old octopus that strangled California, the railroad operations, in the late 1800s. And three citizens went to the California Public Utilities Commission and said, “We’d like to speak about this,” and it killed it right there. The government no longer imposed that rule on the state level in California. This particular tax costs the average family a couple of pennies a day. Nobody’s going to fight with somebody over being robbed of a couple of pennies a day, but if you can get a penny a day from every single person in America, at the end of the year you’ve got $1.1 billion. These companies are collecting several billion dollars a year this way, and they shouldn’t. They’re collecting a tax they don’t pay to the government….

http://www.democracynow.org/blog/2012/9/19/david_cay_johnston_the_fine_print_how_big_companies_use_plain_english_to_rob_you_blind

#108 Deb on 10.19.12 at 10:34 am

#88 Frank

As you know, corrections in the real estate market follow several declines in monthly sales. A significant reduction in the prices of homes does not happen instantly.
For example, it is not like Black Monday (25 years ago today) when, on October 19, 1987 the Dow lost over 22% of its value and what was then known as the TSE lost 11% of its value, all on a single day!
Many panicked and sold. Most froze like deer in the headlights and did nothing. And a few chose to gather their cash together and add to their equity holdings through buying what was on sale.
Real estate corrections are not like this at all. It takes several months for price reductions to follow declines in sales. It takes time and it takes patience and those who choose to wait to buy will be rewarded in 2013.

#109 Tony on 10.19.12 at 10:42 am

Re: #87 John B. on 10.19.12 at 6:04 am

I’ve got news for you all provinces have reached their peak with Alberta reaching theirs’ five years ago.

#110 jess on 10.19.12 at 10:46 am

Holy Crap!

Isle of Jersey -elliot management through ann romney
let detroit go bankrupt
new exposé on the cover of The Nation magazine called “Mitt Romney’s Bailout Bonanza: How He Made Millions from the Rescue of Detroit.” Investigative reporter Greg Palast reveals how Republican presidential nominee Mitt Romney made some $15 million on the auto bailout and that three of Romney’s top donors made more than $4 billion for their hedge funds from the bailout
Did Romney made millions on the bailout ?
Greg Palast: “Mitt Romney’s Bailout Bonanza: How He Made Millions from the Rescue of Detroit”

http://www.democracynow.org/2012/10/18/greg_palast_mitt_romneys_bailout_bonanza

#111 Jimmy on 10.19.12 at 11:04 am

Slow but adequate growth, stable employment, and an economic environment that is suggesting more and more that Carney won’t be raising rates for years. Much to the dismay of the readers of this blog, Garth is finally seeing the light — the housing market is not going to crash. How much it will erode is highly questionable.
Life is short. If you want a home for your family, then buy a house. Do you rent, Garth? Would your wife be happy to pull up her roots, sell the family home and start renting from a stranger? Don’t let avarice and the advice of misguided gurus stop you from living your life, people. NO ONE can predict the economic future, regardless of what they promise you.

#112 Bottoms_Up on 10.19.12 at 11:11 am

#71 Soylent Green is People on 10.19.12 at 12:46 am
—————————————————–
Another funny joke. You’re kidding right?

#113 Jane54 on 10.19.12 at 11:16 am

One of the major banks in the UK has just published a study saying that 51% of homes for sale are owned by folk who want to move down the housing ladder and only 22% of homes for sale are owned by people who want to go up.

The average age for a downsizer is only 55 years, so Garth it is starting.

#114 Arthur on 10.19.12 at 11:17 am

I just found out my 23 year old coworker bought a house 2 months ago in Langley, BC. She only graduated from engineering school 1.5 years ago. She had help from her parents so she could make a 20% down payment but otherwise somehow qualified for the mortgage on her own. I don’t know the exact details but the house probably cost around 450-500k.

She is able to cover the mortgage completely from renting most of it out (already has the renters), leaving a suite for herself to live in.

I guess she won’t be totally screwed as the renters are covering her mortgage but I think she is going to lose her all of her down payment at least in the next few years.

I didn’t think they were still qualifying people who make ~60K/year for 360K+ mortgages.

#115 Buy? Curious? on 10.19.12 at 11:19 am

Today’s post is brought to you by Canada Post. “When you just want to mail it in!” Also brought to by, Potassium, “Bananas are a great source of POTASSIUM! And the letter “Y” “Why? “The joke is funnier if you know what Potassium is the periodic table.”

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

#116 DM in C on 10.19.12 at 11:36 am

Jimmy:

” If you want a home for your family, then buy a house.”

We’ve both owned and rented. We’ve never made more money than we do right now, and we rent. A home is what you make it. Our boys understand that. A house is merely shelter.

Buying a house is not living life. And you don’t need to buy one to make a home. And I’m the wife/mother in the family.

#117 Inglorious Investor on 10.19.12 at 11:38 am

#111 Jimmy on 10.19.12 at 11:04 am

You are correct that no one can predict the economic future, or at least time it. That’s why your choices should not be based on predictions; they should be based on risk management. That’s a very key distinction that too many people either forget or just don’t know.

And most of us are just not very good at risk management. But really, when it comes to buying a home, it should not be that difficult to assess your risks and work through some scenarios (e.g. if you lose your job and can’t find one for six months, would you still be able to pay your expenses?). The risks are unique to each individual. You can also assess market risks and broader economic risks, but again, they apply differently to different people.

I also agree that if home ownership is your dream, then you should not wait, unless your circumstances are very precarious (home ownership is just not right for everyone for various reasons). However, what I would do, is try to make sure I bought a home that I could afford. Not “afford” in the sense that I can scrape together the mortgage payment if I make good at Friday night poker. But truly afford, in the sense that I have everything covered (I won’t go into details) based on a solid financial plan.

Part of the problem in Canada is that most of us have been suckered into thinking that carrying costs are all that matter; that houses always go up in value; and that granite and stainless steel are birthrights.

#118 Alex N Calgary on 10.19.12 at 11:38 am

Ain’t that the truth about living in Cochrane. Its full of delightful subdivisions with some of the more, colorful people in AB who can’t quite afford to buy in Calgary. 15min to the outskirts communities in Calgary which are still HELLA far from most places that offer employment, good advice. Also you can get a decent townhouse in Calgary for that kind of money, still outrageous of course.

Our next door neighbours (early 50’s) continue their forced-labor camp style work renovating their investment house, 5th straight month, day and night, weekends, all the time, I call the guy, the Bearded Wonder, in honor of garth. their whole summer burned away, all that landscaping about to become Mute as the snow is going to fall in a few days, maybe they’ll be lucky and find their greater fool.

You know they are out of new buyers, as there are lots of renters on my street, they are the trashiest trash, early 20’s, 30’s, whatever, thats all thats left that didn’t buy, keep up the good work Garth! even repetitive messages I still look forward to reading this each day, not sure what that says about me, but rather I guess says this blog is good!

#119 Burnt Norton on 10.19.12 at 11:42 am

Dear DA / lame winky face guy:

Well, I’m mystified as to how you can accuse me of deceit based on my #76 comment. In keeping with Garth’s topic-du-jour, the logic escapes me.

Anyway, DA old pal, I simply try to make myself aware of my own biases, whereas your posts continue to suggest that you may not.

In selecting a shelter salesperson, as with any agent I might pay in return for a service, I have found that it is prudent to consider the nature & extent of any potential bias and / or conflict of interest that the agent may be operating under. It’s just a part of caveat emptor. Doesn’t mean that they aren’t nice people, as I have indicated, it’s just human nature in the business of marketing and sales. No biggie.

Most of us succumb the rampant consumerism that compels us to purchase goods and services that we probably could do without. As such, we spend time and money acquiring frivolous things for all sorts of reasons, conscious and unconscious. No, DA, of course it is not up to you or any other retained agent to make decisions for another competent person. In fact, it could be perceived as paternalistic, if not arrogant, to presume that such a notion were true. Although really, it’s nice to know that you have your clients’ best interest at heart, as you continue to emphasize.

My point is simply that there is very likely to be a major conflict of interest (conscious or unconscious) when a commission-paid salesperson with financial obligations of his / her own advises a client on issues related to a transaction that, once completed, incrementally compensates the agent for time and effort expended up front. Same with mutual funds, diamond rings, cars, litigation and cataract surgery.

The stakes are raised when the transaction ends up being one of the most, if not the most, important financial decisions of a person’s life.

#120 Canadian Watchdog on 10.19.12 at 11:45 am

#105 Inglorious Investor

“I don’t know… Do you really think it’s that simple?”

It is simple and probably why it confuses people because it appears so complex. Ask yourself: Why would F impose rules just before insurance cap is breached? Why not before after the biggest mortgage crisis just unfolded? Answer: to buy time.

OSFI’s B20 guidelines was a sideshow. One day soon it will become apparent who’s not lending (or wasn’t) causing sales to fall further. We’ve seen this before and there is already a blueprint for how this unfolds.

Watch for the headlines.

#121 Spiltbongwater on 10.19.12 at 11:46 am

Was it gay marriage that killed the donosaurs, or was it limate change that killed them? If only the dinosaurs were smart enough to have a carbon tax and develop a carbon trust, where as they would throw all their money down a big polluter such as a volcano, and buy offsets from the volcano, we could be using a tranined brontosaures to help us with sustainable mining.

#122 Inglorious Investor on 10.19.12 at 12:19 pm

#120 Canadian Watchdog on 10.19.12 at 11:45 am

As I allude to in my comment, the government is doing its due diligence risk management. Certainly, if conditions warrant it, they can simply increase the limit. But I think they’ve concluded the risk/reward (again, for the banks) is not favourable given the points I stated, and certainly perhaps others.

Of course, I also blame them for the bubble. They could have easily moderated the effects of low interest rates with tighter rules (like they just did) but first they made it so everyone and their pet dog could get a mortgage. In short, they played us. And it’s all for the banks.

Of course there are also socio-political considerations (that’s a Pandora’s Box). One cannot overstate these. After all, they want to get elected next time, don’t they? I’m sure that figured into their timing as well.

But I agree with you (from previous posts) that home prices are based on lending limits and standards. So, if you cut out the main fuel of that lending engine (CMHC), the result should be no surprise.

#123 TRT on 10.19.12 at 12:37 pm

I was wrong. I thought Boomer pensions were the next thing on the cutting block in this time of austerity.

Two-tiered Pensions: CAW, Federal Public Service, Air Canada…

This will spread like wildfire to other sectors as the government have set an example.

Like I said before, these kinds of attacks on the young will bode ill for the Boomers with regards to health care.

#124 GTA Engineer on 10.19.12 at 12:39 pm

As expected, more earnings misses. Or more correctly, revenue misses, from MSFT and McDonald’s, in addition to yesterday’s Google fun. The beat-to-miss ratio for revenue is now running 41%:59%, meaning there are 50% more companies missing revenue targets than those exceeding them. Bad news everyone. EPS may still be a slightly shinier turd, but corporations can only cut costs so much to maintain earnings until that top line eats into those figures too. Today’s market drop won’t be the last – there will likely be some spikey recoveries, but we’re in for some serious market corrections..

There are no ‘targets’ but analyst’s expectations. Profits are profits. — Garth

#125 KommyKim on 10.19.12 at 12:42 pm

#13 EIT on 10.18.12 at 9:22 pm
“Let me start. Deposit Insurance by Government should go. Agree?”

Only if the fractional reserve banking system is eliminated. ie: The total of bank loans must equal total deposits.

Then there would be no loans, and houses only for the wealthiest. Figure it out. — Garth

#126 spaceman on 10.19.12 at 1:02 pm

8 Realtor #1 on 10.18.12 at 9:12 pm

Victoria is already close to 2007 pricing, close to 10% off assessments, and assessments fell last year. More to come. With a 12 month supply of homes, prices need to erode by another 5% to get the ball rolling. the spring thaw will be very interesting.

Easily see 2 years of eroding prices, and then flatline… my Crystal ball gets cloudy past that…

#127 Victoria Tea Party on 10.19.12 at 1:02 pm

“WE’RE ON THE TITANIC, BUDDY”

That’s a quote I’ll remember for some time. It was my stock broker’s comment this morning about the current markets/economics conundrums plaguing our world.

Keeping his comments directed towards the upcoming US elections, and the dreadful economic problems facing the next president (he believes Obama will and should win because he is a populist), is nothing short of a national economic emergency, he said, that requires a Rooseveltian response.

In other words, both US political parties’ politicians should combine efforts to try and resolve the debt-larded situation.

“Can they,” I asked Mr. Stock Broker?

“What do you think?” he replied.

Can’t happen, I replied, because of the onslaught of the entitlement society.

He agreed.

He had some ideas for buying stocks today but he dumped cold water on them, finally, and told me to call back next week.

Meanwhile, it is worth for investors to pause on this day, the 25th anniversary of Black Monday October 19, 1987 when the Dow crashed by 23 percentage points.

We can get our our chicken bones and ball bearings and whatever else passes for modern-day indulgences to see us through all of this.

But it seems to me that those in charge really have lost control. China, Europe, US. And Canada? Nice little Canada will have a lousy economic outcome if something doesn’t get better shortly, amongst the big boys.

Condolensces to recent condo boxes-in-the-sky purchasers: Nearer my God to Thee.

#128 };-) aka D.A. on 10.19.12 at 1:04 pm

#116 Burnt Norton on 10.19.12 at 11:42 am
My point is simply that there is very likely to be a major conflict of interest (conscious or unconscious) when a commission-paid salesperson with financial obligations of his / her own advises a client on issues related to a transaction that, once completed, incrementally compensates the agent for time and effort expended up front. Same with mutual funds, diamond rings, cars, litigation and cataract surgery.

The stakes are raised when the transaction ends up being one of the most, if not the most, important financial decisions of a person’s life.

I am always only too happy to alter my remuneration method to “fee for service” rather than “commission”. The assurances a ‘fee for service’ remuneration brings afford me the ability to offer substantial discounts to any client who might elect to pay me that way instead of on a ‘contingency’ basis. Unfortunately seldom do I get any takers as most would prefer to, ultimately, pay more only“if” I get the job done and not pay anything for my time if I do not. Believe me, often when the subject of my fee is being discussed this is a conversation we have and that is how it ends – they choose ‘commission’ every time even though I offer a discount if they choose a ‘fee for service’ option.

Despite what you and Melanie Aitken might think, this is a very competitive business and that bodes far better for consumers than it does REALTORS. Our society abounds with Greater Fools many of which, believe it or not, are REALTORS who take on clients whose unrealistic expectations will never materialize in anything more than that REALTOR spending countless hours and resources trying to achieve the unachievable never being paid at the end of the day.

#129 Steven Rowlandson on 10.19.12 at 1:07 pm

If the middle class wish to maintain real estate prices in the 6 and 7 figures so that they can feel wealthy there is one thing they must do and that is set minimum wage at 1/6000th the price of the average home and that could work. Otherwise they are dreaming in technicolor and are having delusions of financial grandeur.
I think there are doctors that can treat such conditions.

#130 HD on 10.19.12 at 1:08 pm

@ Inglorious Investor

I really enjoy your posts. Keep up the good work.

Best,

HD

#131 Mike on 10.19.12 at 1:14 pm

Mr . Turner,

Thank you for replying to my comment. I respect what you do and think it’s great that you interact with your audience. It has to be tough sometimes.

RE: manipulated US labour numbers

http://www.zerohedge.com/news/2012-10-06/rosenberg-unemployment-rate-if-its-too-good-be-true-then-it-probably

http://www.zerohedge.com/news/2012-10-05/reason-todays-unemployment-rate-plunge-part-time-jobs-economic-reasons-surge-most-qe

http://www.zerohedge.com/news/2012-10-05/nfp-prints-114k-top-expectations-115k-unemployment-rate-tumbles-78-expectations-82

So I don’t know if these articles proove anything, but they suggest that for September, the US used a household survey to calculate labour participation rates, and decided arbitrarily that means more people had jobs.

Non farmland payroll printed 114K.

I am almost certain that zerohedge is just an arm of the new alternative media, but it is far from the Alex Jones fear non-sense, and guys like David Rosenberg, while always a bear, are still respected. Plus they back up everything with published charts, numbers etc etc.

I don’t wang to ruin my credibility with outlandish theories, but it is high time that we collectively take the blinders off and look behind the curtain.

I guess it’s just a bit disapointing that you are so good at exposing the real estate industry and their manipulation of stats, but you don’t apply the same logic to other areas. It’s pretty easy to do…

#132 Stew on 10.19.12 at 1:15 pm

GARTH tell us how much smarter you are then Frank Giustra: ( says its the end of the US Dollar)
“I don’t know when and I don’t know how high. But gold is going a lot higher.

“Gold is the bubble of all bubbles. It’s the mother of all bubbles. It’s the bubble people will go to when they’ve exhausted all other bubbles.
http://www.businessinsider.com/frank-giustra-bullish-gold-2012-10

“Here’s why: It is moveable. It is easily transferable across borders in times of crisis. It’s a currency. It’s liquid. It’s easily tradeable.

“I’m a fan of all hard assets, but particularly gold. It’s the largest part of my portfolio and it will continue to be until this cycle is over.”

The reason for Giustra’s confidence about the gold price – and gloom about the financial system – is all about US monetary policy.

Giustra makes his living providing services to gold mining companies. What else is he going to say? — Garth

#133 PoorgEoisie on 10.19.12 at 1:21 pm

I get so frustrated when people say “irregardless”. First of all, the word is spelled “irregawdless” and to be perfectly cromulent it should accompanied by the word “bro” at the beginning and end of the sentence.
Example:
#47 incorrect
Hey I thought people could make money in real estate irregardless of market conditions.
#47 correct
Bro, hey bro, people make money in real estate irregawdless bro.

#134 Paul on 10.19.12 at 1:38 pm

#94 DA

however I believe it is very conservative to expect the 250k house in Kelowna to be 750k after 2 complete market cycles.

Ya right.

#135 Snowboid on 10.19.12 at 1:40 pm

#102 Ralph Cramdown on 10.19.12 at 9:44 am…

The RE agent who wrote those articles is a well-known flipper in Kelowna, who is having a bit of trouble selling lately.

For example, http://tinyurl.com/8rsoo33 started at $ 299,500 back in February – now down to $ 244,000 and still not selling – has been delisted and relisted a couple of times.

Another recent listing http://tinyurl.com/8jojho6 reminds me of many of the flipped properties we looked at in Phoenix – no thanks.

Thanks to another poster from a couple of days ago who provided a link to RE disciplinary actions in BC, I can see this same RE agent was suspended and fined in 2008 for contravention of “…Rules/Incompetence, stakeholder provisions, duty to act honestly and with reasonable care and skill, duties to clients…”

Great spokesperson for realtors in Kelowna, but of course Castanet is well-known for RE pumping, so this writer fits in perfectly.

BTW, RE and rental listings on the CL index (Craigslist Kelowna) have exploded in the last couple of weeks, reminds me of our first look at Phoenix RE in 2010. Hundreds of ads offering RE services, foreclosure lists, listings, etc. – a lot of desperate RE agents and private sellers alike.

#136 Canadian Watchdog on 10.19.12 at 1:59 pm

#122 Inglorious Investor

“They could have easily moderated the effects of low interest rates with tighter rules (like they just did) but first they made it so everyone and their pet dog could get a mortgage.”

Not really. Our government and central bank are hostages to the U.S. being the optimum currency anchor (reserve currency). Canada must follow U.S. policies just to stay competitive. Not many know, but it was Harper who instructed CMHC to make high risk loans after 2008, not so everyone can get a mortgage, but to keep capital flowing into banks and government revenue streams.

At this stage, they’ve exhausted every possible countermeasure to fight deflation. They know there’s no good outcome here and that millions will lose their wealth over the next decade or two. It’s not risk management, it’s crisis management.

#137 Stew on 10.19.12 at 2:01 pm

Giustra makes his living providing services to gold mining companies. What else is he going to say? — Garth

The truth..something you avoid daily… I have met the man, talked to him at length. He could care less about making money anymore…just tells it like it is.

Do you always insult people who disagree with you? Best change that. — Garth

#138 Alberta Bound on 10.19.12 at 2:02 pm

Free advice is worth what you pay for it. Somehow affordable sleeper communities around Calgary gets a bad rap when effectively that’s where young couples with kids can afford a place with a small backyard.
Cochrane is no different than bedrooms communities around Toronto. When I was living in TO there was no GTA. In time Cochrane, Airdrie, High River Strathmore will form the new GCA.

#139 Nemesis on 10.19.12 at 2:03 pm

@SnowBoid/135…

Re: your first MLS link… you forgot the best part of the SalesPitch…

…”Owners paid $345k in 2010″…

TeeHee!

#140 Renting in Vancouver on 10.19.12 at 2:15 pm

First off, renting anything decent in Vancouver is expensive — we know, because we sold our home last year and are currently doing do. (Our monthly housing costs are approximately double what we paid as homeowners.) Second, I’ll tongue your armpit and call it candy if you can get me 7% ROI per anum in this market. Although I heartily agree with you that RE today is a poor investment choice, the alternatives are not stellar and renting in Vancouver is hardly a panacea.

Rent vs own: I’ll bet you were not factoring in lost return from the invested equity in the home, which is a poor comparison. Renting in Van is abolsutely cheaper than owning. As for the 7% return, my own balanced (non-cowboy) portfolio is ahead 8% this year, averaged 7.44% over the previous two years and 6.46% over the last eight, which included the GFC. But forget the tongue. — Garth

#141 };-) aka D.A. on 10.19.12 at 2:18 pm

#134 Paul on 10.19.12 at 1:38 pm
#94 DA

however I believe it is very conservative to expect the 250k house in Kelowna to be 750k after 2 complete market cycles.

Ya right.

I did not say that. That was a comment in one of three articles written for http://www.Castanet.net by another local REALTOR which I merely provided a link to for the Blog Dawgs entertainment.

That said, based on historical price trends, it is not so ridiculous for he or anyone else to forecast such a possibility. Certainly such a forecast is no less credible than those who comment on this blog that “prices will revert to 2003 levels”. Stay tuned for further developments as only time will tell.

#142 Bigrider on 10.19.12 at 2:20 pm

#94 DA-

Why does the RE salesman stop at just 3 houses in his example? Why not 30 or 300?

I mean, with a 5 % rate of inflation and with the ease at which he presents his example, we ALL can retire richer than our wildest dreams.

#143 Inglorious Investor on 10.19.12 at 2:36 pm

Stock markets paying homage to the big crash of October 19, 1987 with a mini dump today? But it’s not over yet. I predict that before the close, the markets will be down at least 50%.

(Just keep in mind that no one can predict the future.)

#144 Inglorious Investor on 10.19.12 at 2:36 pm

#130 HD on 10.19.12 at 1:08 pm

;)

#145 Old Man on 10.19.12 at 2:47 pm

I checked out all those two bedroom condo listings in the kingsview village area: 320/330/340 Dixon Road, and they are selling too cheap. In fact at 1981 prices, more or less, so wonder what the hidden problem is all about; just too good to be true. Does anyone know?

#146 daystar on 10.19.12 at 2:49 pm

#97 };-) aka D.A. on 10.19.12 at 9:26 am

When someone ends a comment with a question mark, they aren’t telling you what to think, they are asking you what you think unless the question is rhetorical or answers itself.

I’ve been reading you for a while myself and I get this rigid code of ethics that seems prevalent in your comments, a black and white view concerning your own realtor conduct. That may or may not be the case. I’ve seen many a front put on in my day for the sake of perception and my, what airs and graces we put on to do so. What surprises me is your need to defend your collegues for the most part as one and the same. (well, not so surprising. The welder defends the welder, the dentist defends the dentist, the lawyer defends the lawyer lol)

Realtors happen to be human beings like anyone else in trades, sales and professions. Close to half of us will end up in divorce and experience the same wide variety of human addictions, participate in crimes and lie, steal, cheat for money, power and status in the same percentages as everyone else regardless of their choice of income.

Its the ones who acknowledge and deal with their own human weaknesses that have a chance at strength. The rest? Too busy running away from ugly truths using smoke and mirrors with airs and graces from what I can tell so take this advice from someone who isn’t trying to sell you something. If you want to play the integrity card, its helpful not to bite someone’s head off when they simply ask you a question.

Oh, and one final thought. (oh oh… caffiene is kicking in, makes me edgy, you could be in trouble) When I was in sales the first thing I did was qualify my customers. Who has the purse power? Is there a need? Can they afford it? Is my product their best choice overall? I slept great at night when I sold to customers that had a need, could afford it and my stuff was their best bet. I slept terribly when it wasn’t the case.

What do your collegues do? What do you do in terms of qualifying affordability? “Oh, the banks do that, its really not my business”. Isn’t that ethical. Here, some words of our BoC governor:
http://www.cbc.ca/news/canada/story/2012/04/06/carney-household-debt.html

“We’ve done analysis which shows that about 10 per cent of Canadians are vulnerable if interest rates returned to more normal levels, which will happen.”

With household debt now at 163% of GDP, our banks have done oh, so well in qualifying their customers on affordability and of course, it really isn’t the real estate industries concern as to whether or not valuations and debt loads have become unsustainable in the macro, its not their business. Right? What business is it after all to sacrifice the easy money of today for the sustainability of tomarrow. Yes, I can well imagine just how many realtors have put a spreadsheet in front of buyers revealing what fluxuations of interest rates and length of amortizations do to affordability, y’know, because that would be offering in the way of information, some form of advice. Why on earth would any realtor offer a prospective client a rent vs buy spreadsheet that offers the self explanatory parameters of sustainable investment, thats just too much advice for the lamen to take, apparently.

And naturally, its never up to a realtor to decide for the client whether a 300 square foot box for $600,000 or a 3,000 square ft mcmansion for 1.5 mil is “suitable” for their prospective clients as this is never their decision to make, no, its never a realtor’s responsibility to qualify affordability or “need” or for that matter, the most suitable product for the said prospective buyer. If it was, how could one sleep?

Maybe its just me but what I find offensive is having to read over and over the comments of someone who claims they are doing whats best for their clients when they aren’t or are preserving the “abilities” you know, sustainability, responsibility, accountability and respectability of their industry when they don’t because we all know how its never the fault of realtors should RE bubbles get blown because realtors should never offer caution, why, that would be a form of advice. Unsustainable valuations are the choice of their clients as we supposedly all well know. Why, it would be unethical to influence someone elses opinion with advice apparently, at least, according to you.

After all… what would a realtor know about the RE market that potential clients don’t.

#147 neo on 10.19.12 at 2:49 pm

I guess my logic on earnings was wrong and Garth’s was correct after all. Just look at the earnings that came out the past 24 hours and the jubilant reaction by the stock market.

The S&P is ahead 15% this year. What a tragedy. — Garth

#148 daystar on 10.19.12 at 3:02 pm

#132 Stew on 10.19.12 at 1:15 pm

Required reading.

#231 daystar on 10.18.12 at 11:15 pm

#149 GTA Engineer on 10.19.12 at 3:03 pm

There are no ‘targets’ but analyst’s expectations. Profits are profits. — Garth

—————-

The analyst’s expectations -are- the targets (to investors at least, even if they aren’t recognized as the internal company targets). They’re what the stock price is based on (or at least, strongly correlated to, due to other factors affecting stock prices). Generally, beating these expectations = stock goes up. Opposite = stock goes down. In addition, many companies actually provide guidance to the investment community both officially (eg. we expect revenue to be between X and Y during period Z) and unofficially (eg. we expect X segment of our business, which accounts for Y percentage of our revenue and Z percent of our profits, to be impacted in a negative/position manner due to A, B, C, etc.) where the analysts draw their own conclusions.

Agreed that profits are profits, and that’s what’s held up the markets to date. However, the likelihood of these profits continuing and growing into the future becomes lower and lower as companies use up all their tools (eg. cost cutting/layoffs, optimizations, squeezing supply costs, etc.) to counter the effects of declining revenue. Profits fall quickly when revenue drops – the most profit $’s come at every marginal top-line (revenue) dollar. Below a certain point of revenue, profits are harder and harder to come by, and at some point, impossible, as SG&A, labour expense optimization, and other cost containment designed to maintain earnings buys you less and less..

Will the world be using less food, energy or iPads? I think not. — Garth

#150 Old Man on 10.19.12 at 3:07 pm

#137 Stew – get insulted on occassion with a smart remark and it just rolls off my back; not a problem with me, as just laugh about it all and move on.

#151 Inglorious Investor on 10.19.12 at 3:11 pm

#136 Canadian Watchdog on 10.19.12 at 1:59 pm

I agree with you on the dollar issue, and that their actions were intended to feed the banks and gov. Totally. But I’m not sure it required eviscerating lending standards and turning Canadians into a nation of debt junkies. Or maybe you think it did?

But, man, if they were trying to fight deflation, they went super gonzo overboard by funnelling the countervailing inflation into housing. Perhaps they underestimated the result? Did they even estimate it at all?

Certainly just taking that risk belies Canada’s international image as a prudent fiscal and financial manager if we were willing to risk blowing up housing and harm so many of our young people. Or maybe they’ll pull it off and the decline will be hidden by inflation, as I suggested earlier.

#152 Dupcheck on 10.19.12 at 3:22 pm

Healthcare is very much tied to the economy since our taxes fund it. Why don’t we ever talk about that. Compare it to the US one and others around the globe. Or talk about when will Canada and US be one?

#153 Awesome on 10.19.12 at 3:27 pm

Apparently a small group of the population understands that the market is heading down. More price cuts in south east oakville. Hopefully more people get the memo. Watching the market going down is amazing to me… Just can’t believe how many people are trying to Lease out their homes if they can’t sell… Sitting on a property for potentially that Long seems interesting. Anyways, good to be a buyer I guess. Can’t jump in yet however because constantly wondering what better house will come on the market for even less money!

#154 Bigrider on 10.19.12 at 4:00 pm

http://business.financialpost.com/2012/10/18/borrowing-to-invest-rules-under-scrutiny-in-canada/

Why is leveraging to invest in financial assets such an evil that needs immediate addressing ,yet leveraging to buy homes and even more specifically rental properties of all kinds considered Ok?

Anyone?

Because nobody buys financial assets with 97% leverage, and yet that is the average for real estate. — Garth

#155 Bob on 10.19.12 at 4:07 pm

@#140 Renting in Vancouver
The writing hilarious, the imagery, not so much. Brilliant!

#156 Elchavo on 10.19.12 at 4:18 pm

@#21 Freedom First

Nice man, nice. Planting a seed on a young nurse in such a short time ain’t bad at all.

#157 Timmy on 10.19.12 at 4:20 pm

Garth: I agree that rent vs. own should include the lost return from the invested equity. For alot of people current sit on a lot of cash waiting for the RE market to drop before buying, where do you suggest they park their money? Some experts suggest that if you need the money in the next 2-3 years, equity market is not for you. Bonds nowaday is pretty risky too. Should the RE market drop like people predicted (25-40%), don’t you think the equity market also tanked? To use 7% return on you analysis just too high considering when you need the cash to pull the trigger to buy when the housing drop (maybe next year…maybe 2 years from now….)

#158 rosie on 10.19.12 at 4:21 pm

#137
Beware salesmen who say they’re not in it for the money. Sorta like school administrators who say they are in it for the kids

#159 Snowboid on 10.19.12 at 4:36 pm

139 Nemesis on 10.19.12 at 2:03 pm…

Missed that, thanks – I wonder if that was before or after they did the flipper renos!

#140 Renting in Vancouver on 10.19.12 at 2:15 pm…

Why did you sell then? It makes no sense whatsoever.

Our close relatives in Van are the opposite, rent is about half what it would cost to buy the house.

#160 KommyKim on 10.19.12 at 4:44 pm

RE:#125 KommyKim on 10.19.12 at 12:42 pm #13 EIT on 10.18.12 at 9:22 pm
“Let me start. Deposit Insurance by Government should go. Agree?”

Only if the fractional reserve banking system is eliminated. ie: The total of bank loans must equal total deposits.

Then there would be no loans, and houses only for the wealthiest. Figure it out. — Garth

I disagree Garth. Would no loans mean no cars for the average person? I’ve never bought a car on credit and I’ve even bought 1 new car with cash (Apx 26K).
For the 1st house I bought in the 90’s (1/2 duplex), yes I did get a loan. My 2nd house; I had saved 200K cash to add and ended up with no Mortgage. (I make under 70K a yr as a single income in a 2 person household so the key is being frugal)
My point is that I could have saved up the entire 135K for the duplex if I had rented for a few more years.
The fractional reserve banking system is part of the problem along with the low interest rates, central bank policies, etc. If banks were required to raise the actual cash that they loan out, deposit rates and loan rates would be much higher and thus house prices would be so much lower. But I’m preaching to the choir…..

#161 TRT on 10.19.12 at 4:51 pm

Garth’s Prediction: 15% decline (almost there) followed by a plateau….Looks more and more likely!

Means after 5 years, with a 3% REAL inflation rate, the house will have recovered its original value…by wiping out losses of that 15% correction.

You will also have paid off 15% of the principal of your mortgage.

Now throw rent losses into the equation…and it becomes apparent who the greaterfools may turn out to be. Can’t argue with the numbers!

Buy a calculator. — Garth

#162 eagle eyes on 10.19.12 at 5:08 pm

#4 Van Guy
You don’t think Richmond and Van west will crash? Seafair homes are 20% cheaper than 18 months ago.
Isn’t this considered a crash?
_______________________________

3760 Pacemore Road Sold $788,000 July 2012
8351 Elsmore Road Sold $808K Oct 2012

8551 Bairdmore Road Sold $1.1m October 2011
3180 Wardmore Road Sold $1.1m March 2011

Would you say that was more than a 20% drop so far? How much further would you say to expect by 2013?

#163 Inglorious Investor on 10.19.12 at 5:15 pm

#94 };-) aka D.A. on 10.19.12 at 8:27 am

Oh, where do I start? Like deciding which end of a big, fat, juicy porterhouse to attack first!

First of all, you should always consider the messenger. This guy makes his living selling RE. Have you ever heard a car salesman tell a prospective buyer: “No, now is NOT a good time to buy a car.”

Second, he rings off a plethora of “stats”, but what are his sources? Oh wait, it’s on the Internet, so what he says must be true, right?

Third, he says, “[…] the market is very stable. And well into a recovery period.” First of all, after the latest correction in Van prices, how can he call the market “stable?” Second, recovery from what? Was the last 10 years a bear market in RE or the greatest bull market in history? Before the latest dip, Van prices shot up 61% over 39 months (http://www.chpc.biz/canada_chart.html) Doe he really consider an uptick off of a minor correction from pure insanity a recovery? Are market cycles in his world measured in days?

Fourth, he says,”[…] nothing going on economically at a micro, or macro level should influence your decisions otherwise.” Really? Maybe he needs a little lesson in risk management himself.

But of course he does admit that his article is “Just one mans opinion […]” Maybe he should check his spelling while he checks his facts.

#164 Ralph Cramdown on 10.19.12 at 5:15 pm

#147 neo
Just look at the earnings that came out the past 24 hours and the jubilant reaction by the stock market.

So did you jump in and buy something?
http://www.buffettsecrets.com/mr-market.htm

#165 Mike in Surrey BC on 10.19.12 at 5:16 pm

#15 Just Park It
Here’s a real life story of average college grades. During year 2000, the couple brought a Townhouse $190,000 in Burnaby with 20% down; $70,000 annual income. In 2004, they sold it for $280,000 (34% net gain) and brought a house nearby for $440,000. They had a $300,000 mortgage with combined $80,000 income; thru they had a health $150,000 down payment. Just this year they sold their Burnaby home first; brought brand new house in Coquitlam for $800,000 with their net proceeds. Mortgage of $300,000 fixed at 2.99%. That’s how a couple in their early 40’s making $40K-$50K get in.

Not any more. — Garth

#166 GTA Engineer on 10.19.12 at 5:16 pm

Will the world be using less food, energy or iPads? I think not. — Garth

————

They don’t need to use less in order for a market correction to occur. The consumption of these just has to grow at a rate lower than forecast, and that will be enough to slump stock markets. Absolute growth *will* continue. However, growth that meets the already-priced-in assumptions in the stock market today, that will not. Like increased listings and declining sales volumes are to future price corrections in real estate, so declining revenues are the canary in the coal mine for corporate earnings, and, ultimately, their share prices.

The market is a predictor more than a chronicler. It disagrees with you, as do I. — Garth

#167 GTA Engineer on 10.19.12 at 5:26 pm

The market is a predictor more than a chronicler. It disagrees with you, as do I. — Garth

————-

Fair enough – we’re each entitled to our own opinions. Mine just happens to be the right one (ah – another opinion!) ;) But we could argue whose is bigger ’til the cows come home and still have no definitive answer until an impartial measure is taken. The coming months (particularly after election and holiday euphoria have run their course) will provide this measure. The business cycle can’t be tamed by the Fed or any other government body. They can pull in demand, stimulate spending, but they’re just delaying the inevitable. The cycle will run its course, and the market will go with it.

Enjoy your 2% high-yield savings account, fully taxable. — Garth

#168 Bigrider on 10.19.12 at 5:34 pm

#155 Garth to Bigrider-

I hope your answer was sarcastic otherwise it made no sense( If Imissed the sarcasm you may chastise my poor read)

It is exactly my point that no one buys financial assets with 97% leverage and yet this is what the regulators are up in arms about , yet 97% and in some cases 100% leverage for real estate considered perfectly acceptable , in no need of regulation.

#169 RWZ on 10.19.12 at 5:45 pm

All these stories posted about people who are in their mid-late 20’s with hundreds of thousands of dollars saved: I don’t know how this is even possible. To save $200,000 in cash between graduation and 28? Let’s say you finish your undergrad at around 22, finish a Master’s or a JD at 24 … you quickly get a job in a recession economy, don’t ever have to pay for eating, driving, insurance, renting, cell phones, or a wedding, or travelling, or having fun, and you’re both offered an above-average starting salary of $60,000 which increases to $80,000 or more over 4 years. You save every penny after tax and end up with about that much (after marrying someone with identical fortune).

But this isn’t really how it is, which means it’s either family money or even more lucrative starting salaries (I’m a 27-year-old engineer and I’m certainly not making as much as that example). Which is exceptional. Frankly, why should anyone care what happens to people with this much money–I don’t think they should even be advised to be prudent. They don’t have to be. That couple can buy a house in cash, and their lives will be better. What else are they going to spend it on? Having even more money when their bodies are falling apart? The years today are worth quite a bit more than the years later on (anyone who disagrees either didn’t do anything interesting in their 20’s or has extended their 20’s lifestyle indefinitely). And then everyone deteriorates and dies.

I’d say save this advice for cases that are more similar to the average person’s situation. If these people buy a decent house right now, instead of renting until the appropriate price declines, I think the amount of lost money will be worth the difference in quality of life for them, compared with whatever else it could get spent on.

Staying in the basement and not even renting, however–when you have that money, and you’re 28 and there are no children yet–there should be something in the DSM for that.

You sound so… young. — Garth

#170 Old Man on 10.19.12 at 5:45 pm

I now know why those nice condo buildings in the Kingsview Village in Etobicoke are selling for 1981 prices, and it has nothing to do with the integrity of the condo buildings, but another factor. Omg had no idea, and my lips are sealed, so just goes to show you what can effect a pricing of Real Estate with hidden factors.

#171 Dividend Yield Investor on 10.19.12 at 5:56 pm

#125 KommyKim on 10.19.12 at 12:42 pm
#13 EIT on 10.18.12 at 9:22 pm
“Let me start. Deposit Insurance by Government should go. Agree?”

Only if the fractional reserve banking system is eliminated. ie: The total of bank loans must equal total deposits.

Then there would be no loans, and houses only for the wealthiest. Figure it out. — Garth

Not true houses would fall in price in line with incomes. Isn’t it the Canadian dream [or American] to have increasing quality and decreasing cost for housing. Or should we have ever increasing cost of housing due to uncontrolled credit growth to where only the wealthy can afford a home. [of course after that the market crashes!].

Best Wishes,
Dividend Man
Atlanta GA

#172 Canadian Watchdog on 10.19.12 at 5:59 pm

“The S&P is ahead 15% this year. What a tragedy. — Garth”

Sure, at the cost of a couple trillion dollars. Business Week’s “The Death of Equities” cover story was 33 years early. S&P500

Equities are finished Garth. The Fed Can’t Do Nuttin’ For Ya Man.

Great post at ZeroHedge explaining the lunacy of central bankers and economists.

Markets will continue to forecast and pace economic growth. The lights are not going off, as trendy as it is to be a nihilist. — Garth

#173 Bigrider on 10.19.12 at 6:04 pm

http://business.financialpost.com/2012/10/18/borrowing-to-invest-rules-under-scrutiny-in-canada/

I would add to my post at #155 which Garth commented on, that many Canadians who might NOT otherwise invest in rental property of their own, are being convinced by unscrupulous mortgage brokers and lawyers to extract equity from their primary residence(leverage) or apply their rrsp or other savings, to private mortgage lending schemes whereby borrowers for houses, who have been declined by the banks and CMHC, get the money needed from these naive investors private lenders , at rates as high as 15%(not a typo) guaranteed ! Of course the fees charged by the mortgage brokers and lawyers eclipse any charged by ETF’s of mutual funds.

Yes you guessed it, these 8th rate borrowers will be the first to walk away in the event of a housing downturn. Afterall, with no skin in the game nothing to lose.

Yet no regulatory oversight and certainly no big paranoid hoopla as is the case for financial assets.

What gives ? Anybody??

#174 Bigrider on 10.19.12 at 6:05 pm

Meant “etf’s or mutual funds” in previous post

#175 Inglorious Investor on 10.19.12 at 6:11 pm

#169 Bigrider on 10.19.12 at 5:34 pm

In today’s low-yield world, managers are increasingly looking for ways to goose returns via leverage. I just scanned the article quickly, but it looks like IIROC is concerned that retail investors do not understand the risks involved and they are trying to reign in the industry as well as make sure there is full disclosure of their practices.

As for RE vs securities: 90% or higher in RE is too high IMO, but we have a long history of using massive leverage to finance home purchases. Otherwise, how many people would have one? But securities are far more volatile (due to their liquidity), so the risks of loss are much higher, especially on a short time horizon. Using leverage only magnifies an already-high risk. Personally, I would never buy securities with borrowed money.

I remember back in ’07 when I was still invested in mutual funds, the manager of one particular fund asked the clients if he could revise the prospectus by making it permissible to short stocks. Most of the clients, smartly, balked and the manager backed off. I have nothing against shorting stocks but I think the risks involved make shorting an unsuitable tactic when it comes to people’s retirement funds. Same leverage.

#176 Old Man on 10.19.12 at 6:16 pm

#170 RWZ – I will tell you the secret in life, as you need to hookup with a rich babe with money, and marry her, as her daddy will buy you a nice home for a wedding present.

#177 Ronaldo on 10.19.12 at 6:25 pm

#177 Old Man –

”#170 RWZ – I will tell you the secret in life, as you need to hookup with a rich babe with money, and marry her, as her daddy will buy you a nice home for a wedding present.”

I knew an Italian family a few years back whose son got married and for a wedding gift they had this beautiful home built for the happy couple. Six months later they were divorced. Sure throws a wrench into retirement planning when 50% of marriages fail and 70% is initiated by women. Expect this percentage to rise in the future given the number of young first time buyers jumping into this bubble market in the past few years. Mommie will take them back though, so no problem.

#178 Herb on 10.19.12 at 6:38 pm

Read it and weep –

http://www.thestar.com/news/canada/politics/article/1274452–hebert-house-of-commons-no-longer-a-source-of-wonder-for-journalist

#179 Canadian Watchdog on 10.19.12 at 6:46 pm

“Markets will continue to forecast and pace economic growth. The lights are not going off, as trendy as it is to be a nihilist. — Garth”

Not nihilism Garth, it’s about restoring a fair system for everyone to have a chance, especially the youth.

A stock market can only be as strong as the economy behind it, which at this point (if analyzed properly with private statistics), has run far beyond fundamental growth.

Our economy in a nutshell is: government revenues are accommodating banks/corporations to create jobs; banks/corporations are waiting for workers to consume more; workers waiting for corporations to lift wages.

If you can make any one of these work without taking away from the others, you have a solution. Until then, ‘nothing getting done’ is what will kill the economy.

#180 };-) aka D.A. on 10.19.12 at 6:52 pm

#146 daystar on 10.19.12 at 2:49 pm

I give up. Believe what you want to believe.

“Why, it would be unethical to influence someone else’s opinion with advice apparently, at least, according to you.” – daystar

I have found through raising two children that “telling” and “guiding” are two very different methods of teaching of which the later appears always to result in a more favorable outcome for all those concerned.

Ultimately it is experience which is the best teacher as it is practically impossible to convince someone of something they don’t want to believe and while you can guide a horse to water you cannot make it drink. But let them put their hand on one hot burner and it is highly unlikely they will commit that foolhardy act deliberately again.

So believe what you want to believe… time will tell.

#181 GTA Engineer on 10.19.12 at 6:56 pm

Enjoy your 2% high-yield savings account, fully taxable. — Garth

————-

I wouldn’t be walking the walk then, would I? Accounts (including RSP and TFSA) are a quarter cash and a quarter short/ultrashort ETFs (broad market, basic materials, etc). Cash is there in case of temporary short-term upside, creating opportunities to buy more short positions at a discount. For the record, the other half of the accounts are invested in preferred ETFs (CPD), REITs (REI.UN, CAR.UN, BEI.UN), junk bond ETF (JNK) for long-term high-risk/high-return, and general US equity indexed to CDN (XSP). No precious metals. I suppose there’s also an equivalent amount in work RSP plans, though with limited investment choice and only an ability to invest long, not short. But with a 1:1 employer match I can’t say no – free money after all.

So the last thing I am is an ignorant basement-dweller throwing all his eggs in one gold, silver, doomer/gloomer, or otherwise my-way-is-the-only-way basket, but I truly believe there’s more opportunity by investing against growth at this point..

All that said, many of the investments above are researched and purchased after your initial (and subsequent) recommendations and education, so for those I do have to say you are doing the average reader a great service.

Thank you. But your shorts are a mistake. — Garth

#182 Van guy on 10.19.12 at 6:59 pm

#18 Devore on 10.18.12 at 9:37 pm
#4 Van guy

Seafair homes are 20% cheaper than 18 months ago.

That’s not a real loss, those are just asking prices that started way too high to begin with.

Am I doing it right? I keep losing track of the excuses.
——————————–

You’re an idiot. Speak when you have access to stats and sales.

8351 elsmore
66×106 listed 920 reduced 880 sold 808
assessed 928

comparables in same block
all 66×106
3720 royalmore sold 3/19/2011 @ 1.01M
3140 wardmore sold 2/17/2011 @ 1M
3180 wardmore sold 2/21/2011 @ 1.1M
8460 elsmore sold 988k 2/4/2011

Thats down a solid 20% in 18-20 months, isn’t it?

#183 gws on 10.19.12 at 7:12 pm

Garth,
There’s no way one can average a 7% return in the markets without exposure to substantial risk. I don’t
believe you and you need to declare your confilct of interest.

So don’t believe me. And what conflict would that be, on this free blog? — Garth

#184 Nemesis on 10.19.12 at 7:22 pm

“The lights are not going off, as trendy as it is to be a nihilist.” — Hon. Garth

Hmmmm… you may be on to something, OldPol…

[KOAA] – Street lights going back on in the Springs

…”The City turned off approximately 8,000 streetlights in 2009 as a cost-saving measure. All residential streetlights were turned back on in 2010. Now, all remaining arterial lights will be turned back on. Budget savings from 2012, including salary savings from not filling vacant positions, helped fund the $150,000 needed to turn the lights back on.”….

http://tinyurl.com/9rfovzp

Too bad about those MotownNihilists, though [personally, I preferred TheSupremes]…

[DeadLineDetroit] – Bing Lighting Plan Is As Dead As A Detroit Streetlight

“Detroit Mayor Dave Bing’s plan to fix broken streetlights is faltering and appears to be dead.

Bing, though, told the Detroit News’s Darren A. Nichols he’s continuing to press state lawmakers to help find the funding needed to keep Detroit out of the dark.

The city is encouraging residents to contact state legislators about the problem in hopes of amping up political pressure, Bing told the News. The mayor wants to resurrect a failed package of bills that would create a lighting authority that could issue up to $144 million in bonds for streetlight repairs…

…The city has about 88,000 lighting fixtures; about 43,000 to 45,000 are operating properly, administration officials say. Not all of those lights will be turned back on, however; the Bing administration plans to prioritize lighting in areas of “population density, commerce, schools and parks,” according to a recent report.”…

http://tinyurl.com/9fszsjx

#185 TurnerNation on 10.19.12 at 7:45 pm

Rough day especially in the USA. I did suspect it would be so; DOL.TO showing weakness, too:

#12 TurnerNation on 10.14.12 at 8:44 pm

Sell all equities. We’re going down for a few weeks.

#186 dv8 on 10.19.12 at 7:52 pm

You want simple? Watch Fox News. — Garth

but isn’t that where we all get our unemployment and realestate numbers from ?

#187 Investx on 10.19.12 at 8:01 pm

You want simple? Watch Fox News. — Garth
——————————————-

Yes, and for political correctness, watch everything else.

#188 EIT on 10.19.12 at 8:21 pm

#125 KommyKim on 10.19.12 at 12:42 pm
#13 EIT on 10.18.12 at 9:22 pm
“Let me start. Deposit Insurance by Government should go. Agree?”

Only if the fractional reserve banking system is eliminated. ie: The total of bank loans must equal total deposits.

Then there would be no loans, and houses only for the wealthiest. Figure it out. — Garth

————————————————————–

Banks can take whatever strategies they want. Obviously if the government doesn’t insure the deposits, then the banks will need to do what is necessary to convince people that their money is safe with them. Hence market checks on the industry ‘bank runs’.

Garth, no loans means collapsed market, crashing prices and a return to sanity (or something else at least). There shouldn’t be loans out there anyways, extended low interest rates have destroyed savings virtually by definition.

This is too stupid. — Garth

#189 EIT on 10.19.12 at 8:34 pm

Garth, don’t forget to write a check for your share of the national debt on your way out.

Typical collectivism

In this country we say ‘cheque.’ And, yes, I have actually contributed funds to the national debt. — Garth

#190 EIT on 10.19.12 at 8:51 pm

Don’t you hate it when you spell something wrong.

#191 T.O on 10.19.12 at 9:02 pm

Cochrane, home of the famous bar “the hotel”. Spent a month there one night!

#192 jess on 10.19.12 at 9:09 pm

“man -in-the-middle’

ohio vote 2004
A “man in the middle” is a deliberate computer hacking setup, which allows a third party to sit in between computer transmissions and illegally alter the data. A mirror site, by contrast, is designed as a backup site in case the main computer configuration

New court filing reveals how the 2004 Ohio presidential election was hacked
by Bob Fitrakis
July 20, 2011

==

They are especially crucial in Ohio, without which no Republican candidate has ever won the White House. In 2004, in the dead of election night, an electronic swing of more than 300,000 votes switched Ohio from the John Kerry column to George W. Bush, giving him a second term. A virtual statistical impossibility, the 6-plus% shift occurred between 12:20 and 2am election night as votes were being tallied by a GOP-controlled information technology firm on servers in a basement in Chattanooga, Tennessee. In defiance of a federal injunction, 56 of Ohio’s 88 counties destroyed all election records, making a recount impossible. Ohio’s governor and secretary of state in 2004 were both Republicans, as are the governors and secretaries of state in nine key swing states this year.=
http://truth-out.org/news/item/12130-will-hig-owned-e-voting-machines-give-romney-the-white-house
http://www.bradblog.com/?p=9079

‘RNC Official’ Arrested for Trashing Voter Registrations in VA Worked for Romney Consultant, ‘Fired’ GOP Operative Nathan Sproul
GOP Voter Registration Fraud Scandal continues to spread…
By Brad Friedman on 10/19/2012, 5:05am PT

=====

Does the Romney Family Now Own Your e-Vote?By Gerry Bello, Bob Fitrakis and Harvey Wasserman, Free Press | Report

Through a closely held equity fund called Solamere, Mitt Romney and his wife, son and brother are major investors in an investment firm called H.I.G. Capital. H.I.G. in turn holds a majority share and three out of five board members in Hart Intercivic, a company that owns the notoriously faulty electronic voting machines that will count the ballots in swing state Ohio November 7. Hart machines will also be used elsewhere in the United States…. In other words, a candidate for the presidency of the United States, and his brother, wife and son, have a straight-line financial interest in the voting machines that could decide this fall’s election.

http://truth-out.org/

#193 nonplused on 10.20.12 at 12:34 am

Hey Garth, Cochrane is no 1 donkey town anymore! Get this, it has not just 1, not 2, but 4 ice sheets! It’s like the hockey capital of western, er, the western portion of Canada from Calgary to about Canmore. And 2 golf courses! One of them is actually pretty good if the wind isn’t blowing your 9 iron shot back over your head. And it has a campground with full hookups! The Rotary Club is making a fortune of that thing.

Cochrane is commutable to Calgary, although it’s not a quick commute. That is the appeal. It worked in days gone by, because it was cheaper, but alas this is no longer the case.

#194 El on 10.20.12 at 7:05 am

#56 Boombust on 10.18.12 at 11:20 pm
^Wot Boombust said!

#195 Spiltbongwater on 10.20.12 at 12:15 pm

Provide evidence, any evidence, that US Bureau of Labour stats are being manipulated. — Garth

In this country we say ‘cheque.’ And, yes, I have actually contributed funds to the national debt. — Garth

In that country they say ‘labor’.

#196 futureexpatriate on 10.20.12 at 3:03 pm

It’s good on a Canadian blog to every now and then throw out a word like “cheque” or “neighbour” or “colour” to flush out the yanks…

#197 cynically on 10.21.12 at 2:34 am

#187 dv8 and #188 Investx – re Fox News: For political truth, watch everything else. #197 futureexpatriate – spelt like a true Brit! Amen.

#198 Columbus on 10.21.12 at 11:00 pm

So, next steps … what happens to a ‘buyers market’ when there are no buyers left?