As predicted

as predicted

A year ago I managed to irritate the sackcloth-&-ashes crowd, who come here daily to flub, by making three predictions: House prices nationally would decline by 15%. After that would come a long, slow melt lasting years. And traditional demand areas would be largely spared while some markets – and most burbs – would be whacked.

But no Phoenix-style 70% scorched-earth crash. No Detroit. No Miami. No Stockton. No TV news vans parked outside foreclosed homes filming people on lawn mattresses. No jingle mail. No front-end loaders ripping through abandoned homes. No whimpering, abandoned pets tied to cop car bumpers. No viz. Just a Canadian-style erosion of equity, terrifying enough to the newly-indebted and the almost-departed.

So far, so good. Sales in every market are now falling. Prices are already fading steadily in BC, the Maritimes, Montreal. Buyers have retreated in droves. Worried sellers are cancelling listings. The media’s gone from thinking this blog is a fringe circus full of nihilists, anarchists and pissy pugilists to, well, pretty much the same. But the evidence speaks for itself. The call was right.

Over the last few days I’ve brought you the latest dismal stats from Toronto, Vancouver, Montreal, Winnipeg, Regina, Halifax, Victoria and the Lower Mainland. They show a dramatic decrease in transactions, and presage a substantial price correction. Now the new housing data is in – with national starts down 13.6% from the same period a year ago. Ditto for building permits, which are a leading indicator – off more than 7%. The message for the economy is clear: slow walking ahead.

The latest Teranet set of numbers supports this. House prices have been in month/month retreat for six months now. Nationally the average is still ahead of last year by more than 2%, but that doesn’t mean “prices are rising” as the realtors wrongly (and knowingly) trumpet. Values have actually been coming down since last summer and within months there will be absolute national declines.

Big economists are in full retreat. From claiming there never was a bubble, they now reassure the bubble is deflating politely. “The slowdown suggests we are not crashing, people are not panicking,” says CIBC guy Benny Tal. “All the indicators we are seeing as of today, in the resale market and in the housing start market, suggest this is a market that is slowing softly… We’ve never seen a crash without a trigger. In 1990-91, the trigger was a huge increase in interest rates. In the U.S., the trigger was an increase in interest rates and the sub-prime shock.”

By the way, a good definition of ‘sub-prime mortgages’ is giving people who do not have any money near-100% financing at historically low rates so they can buy houses at peak, inflated values. Does any of that sound familiar, Benny?

That real estate prices in Canada will fall is a given. Every major market will be affected. It won’t be different anywhere. But that doesn’t mean you should expect a 40% crash in High Park or the Beaches in Toronto, nor Westmount in Montreal or West Van. Supply and demand still rule, so where buyers shun sellers the biggest dives will occur. Most significantly that will be in the exburbs, especially those dotted with McMansions once commanding seven figures. The reductions there (as in places like Whistler) could be epic.

Often forgotten is the length of time a housing metamorphosis can require. What took a decade to distort could take as long to normalize. Since incomes are unlikely to improve much in the years to come (we all know why), then real estate values have to degrade to meet reality. That’ll be a long process. So anyone buying this summer, excited to find a house for 10% ‘below market’ could be in a funk in four years as the melt continues. Conversely, sellers yanking their properties now because they don’t like prices could forever be in regret.

Remember, all real estate’s local. Every market has its own vibe. But a year from now, none will be unaltered, with a helluva lot of jobless realtors.

* * *

Hey. A normal person just dropped by. Whazzup Sue?

“I need some opinion Garth, We just bought a house, and I am in process of mortgaging. I put this question up on the comment section on the blog, but did not get much response from people.

“We all know the famous debate on variable vs fixed. But my question is: 5 year fixed at 2.79 or 10 year fixed at 3.69

“What is your opinion on the subject given the current situation in Canada and the global economy overall. We plan on living at this place for 10 years for sure, and the mortgage is big enough that we do not foresee being able to pay it all off in 10 years.”

That’s easy. Five years, not ten. Why? Because paying a 0.9% premium on your mortgage for five years (in order to secure the 10-year rate) is way too expensive. That’s a 32% increase. Crazy. If you’re worried about prevailing mortgage rates when you come to renew in 2018, then you’re better off to invest the extra money in a nice, balanced portfolio and hopefully enjoy the same 7-8% returns the last nine years have provided. Then use this little pot of dough to pay down the principal upon renewal.

It’s the same argument which demolishes most life insurance policies. But I’ll save irritating that industry for another day. Can only take so much in one week here.

222 comments ↓

#1 Randy on 04.09.13 at 8:17 pm

Who’s gonna pay all those outrageous land transfer taxes if the housing market slows down…..

#2 yahoo on 04.09.13 at 8:20 pm

Firssssst!

…among losers. — Garth

#3 Piccaso on 04.09.13 at 8:22 pm

Real Estate is still flying in Alberta, must be the work.

http://www.edmontonjournal.com/business/Edmonton+housing+start+numbers+March+among+best+Canada/8217473/story.html

That’s starts, not sales. In Edmonton SFH sales were down 6.4% in March. — Garth

#4 JO on 04.09.13 at 8:27 pm

I am seeing a big slowdown in application volumes…no doubt we will see price drops shortly. Met an experienced realtor recently who is personally expecting the same and he admitted prices were “stupid” in the GTA. Several other RE agents and mtg brokers have all told me the same thing and they feel sorry for many of these first timers…HGTV Property Virgins is aptly named for most virgins eventually get F——- I had to talk a few virgins out of 0 down/cashback and 5 % down deals and even told one who was renting a small house for cheap 5 blocks from work to wait until at least summer 2014….I found out she put in an offer about one month after I talked to her…as you say Garth, RE is just way too emotional…a lot of these people simply ignore honest advice and carry on with their deluded plans…I don’t work on commission and am allowed to be brutally honest…it is frustrating to see so many who cannot make a simple decision..
JO

#5 Rich Daddy on 04.09.13 at 8:28 pm

First ten?

#6 guelphstudent on 04.09.13 at 8:28 pm

Is a house sale a part of the GDP number ? Or only the closing costs? Because if it is wouldn’t the housing market crash result in a recession ?

#7 Brag Lamb on 04.09.13 at 8:29 pm

Where is the hard landing aka crash? Garth?

#8 Mike on 04.09.13 at 8:30 pm

I don’t know if anyone has mentioned this, but what about investing in land when prices bottom. Is this a wise investment if you’re in it for the long-term?

Why? — Garth

#9 Seven Stars and Orion on 04.09.13 at 8:30 pm

Mr. Turner,
How much would you charge to be my life coach?
I kid!
Sorta.
Seriously looking forward to the life insurance primer!

#10 brunette on 04.09.13 at 8:36 pm

the person in the picture is mooning the camera – I would have bet that Garth would have told them to not even buy and forget about the mortgage question. He surprised me.

#11 Patient in Richmond on 04.09.13 at 8:37 pm

1oth :-)

#12 Freedom First on 04.09.13 at 8:39 pm

Garth, great post, and pic too!

The person on the ledge has just got to be a renter who is diversified, balanced, liquid, and debt free:)

#13 Steve French on 04.09.13 at 8:40 pm

FFFFIIIIISSSTT!!!

(Oh, wait, I meant ffffurst).

#14 Spiltbongwater on 04.09.13 at 8:49 pm

Don’t forget last year you predicted interest rates would be higher.

They went up .9 per cent on July 9th. — Garth

#15 Piccaso on 04.09.13 at 8:49 pm

#3 – That’s starts, not sales. In Edmonton SFH sales were down 6.4% in March. — Garth

You mean the idiots aren’t lining up to become 400K mortgage owners on 400 sq ft shoe boxes?

#16 condopoor on 04.09.13 at 8:49 pm

But what if interest rates in 5 years are 5%+, or she doesn’t have enough income to stash into a portfolio?

Then she should not buy. — Garth

#17 VT on 04.09.13 at 8:51 pm

It’s the same argument which demolishes most life insurance policies. But I’ll save irritating that industry for another day.

Been following your blog for years but can’t recall you ever covering this subject. Looking forward to your insights on it for a future blog entry.

#18 Mike on 04.09.13 at 8:52 pm

I don’t know if anyone has mentioned this, but what about investing in land when prices bottom. Is this a wise investment if you’re in it for the long-term?

Why? — Garth

——————————————————

Because land is the portion that appreciates at the fastest rate, which should be a better investment in terms of capital appreciation. I’m just suggesting this could be good. Many people who bought land many years ago have seen good appreciation in land value. I know prices are high, but even so, returns seem good over a long period of time.

It’s over, unless the land has redevelopment promise. — Garth

#19 Ms BBoomer on 04.09.13 at 8:53 pm

Great photo symbolism, I see it as the big dump, unseen by like-minded, but seen by the majority. Lol.

#20 Remember when on 04.09.13 at 8:53 pm

Buy now before you are priced out.

I always found that as the funniest mantra from RE agents. Funny how they dont say this anymore.

#21 Something on 04.09.13 at 8:53 pm

I disagree with you Garth, Canada is facing a housing crash, but the crash will not be the same as in US. Canadian economy is slowing down. The economy looks fine, but beneath the surface it’s not so good. Prices for essentials will continue to rise with a rocket speed. Prices for the big items(houses, cars and etc) will continue do decline. Unemployment will continue to rise and good paying jobs will be slowly replaced by McDonalds jobs. It’s very simple, we can’t borrow forever, so one day we have to pay. Even mining jobs are not for Canadians any more(lots of jobs are outsourced). Companies will do what ever it takes to reduces expenses to make sure the share holders get the biggest share, but in the end the Canadian consumer will not be able to buy products and services from these companies.

US jobs market is not improving like you believe. Creating service jobs will never lead to the prosperity.

Anyway, I sold my house last yeah. That’s where I was agree with you, but I’m out of stock, bond etc markets. Waiting to buy on dips, but not soon.

I hope I’m wrong and you are right, but I don’t see enough fundamentals to support your vision.

#22 Brian Ripley on 04.09.13 at 8:53 pm

To #3 Piccaso

On my Percentage Change Scorecard
http://www.chpc.biz/scorecard.html

I have Edmonton SFD sales up 38.1 M/M and down 13.5% Y/Y
I have Calgary SFD sales up 22.4% M/M and up 9.7% Y/Y

One thing I do notice about Calgary specifically is that the TSX energy index has been diverging (down) against housing prices (up):
http://www.chpc.biz/calgary_chart.html

And earnings in Alberta remain well above (+20%) Canada’s average: http://www.chpc.biz/earnings.html

#23 Dust in the wind on 04.09.13 at 8:54 pm

#7 Brag Lamb

Where is the hard landing aka crash? Garth?
———————————————-
It is coming… Do you hear that noise?

#24 White Rock Mom on 04.09.13 at 8:55 pm

My price reduction predictions for South Surrey by year end.
View homes 10%
Ocean Park and Crescent Beach 20%
Elgin 40% because the prices are HAM speculator crazy
Morgan Creek 30%
Morgan Heights 30%

#25 An Cat Dubh on 04.09.13 at 8:56 pm

http://www.cbc.ca/news/canada/british-columbia/story/2013/04/08/bc-realtor-inspection.html

Never buy a house unseen like these people did. They bought a home in Kelowna sight unseen. The home inspector and realtor seemed to “overlook” a few things.
People like this ruin it for the honest people in any industry.

Seems to be a few businesses that are closing in the Okanagan and moving to Alta. Must be the spectre of the NDP and the fiscal socialist Liberals planning more phony carbon taxes, etc.

#26 Dust in the wind on 04.09.13 at 8:59 pm

Come on Garth, I was not expecting that. Cutting my comment on Brad

Gratuitously ad hominem. — Garth

#27 Tom Vu on 04.09.13 at 8:59 pm

Finally find Osama Bin Laden..

Psssst: Don’t tell Bush or Obama, but may have plot for new movie

#28 Dumb & Dumber Flaherty & Carney on 04.09.13 at 9:01 pm

Globe & Mail says : “The Canadian dollar closed higher Tuesday as housing starts in March came in better than expected ”

http://www.theglobeandmail.com/report-on-business/economy/currencies/housing-data-higher-commodities-lift-canadian-dollar/article10933250/?cmpid=rss1

As the Manhurian proverb goes, always expect the worst, then you will always beat expectations.

#29 Mike on 04.09.13 at 9:01 pm

I don’t know if anyone has mentioned this, but what about investing in land when prices bottom. Is this a wise investment if you’re in it for the long-term?

Why? — Garth

——————————————————

Because land is the portion that appreciates at the fastest rate, which should be a better investment in terms of capital appreciation. I’m just suggesting this could be good. Many people who bought land many years ago have seen good appreciation in land value. I know prices are high, but even so, returns seem good over a long period of time.

It’s over, unless the land has redevelopment promise. — Garth

——————————————————–

So land is only a good investment if there is potential redevelopment value? What about a small city/town that expects fast population growth? How about on the outskirts of the GTA when prices bottom?

That’s what I said. — Garth

#30 Dumb & Dumber Flaherty & Carney on 04.09.13 at 9:02 pm

Globe & Mail says : “The Canadian dollar closed higher Tuesday as housing starts in March came in better than expected ”

http://www.theglobeandmail.com/report-on-business/economy/currencies/housing-data-higher-commodities-lift-canadian-dollar/article10933250/?cmpid=rss1

As the ancient Manchurian proverb goes, “always expect the worst, then you will always beat expectations”

#31 AVG_Canadian on 04.09.13 at 9:04 pm

Hi Garth,
‘ve been reading your posts the last few weeks quiet regularly and find them very informative and jiving with my kinda thinking on the RE topic. And now you can count me IN on the Life Insurance threads you plan on spooling!

Great Work, keep it up!

#32 habbit on 04.09.13 at 9:06 pm

#8 Mike It may depend on the type of land. If it’s arable think food prices.

#33 Dust in the wind on 04.09.13 at 9:07 pm

NP, how about this one:

DELETED

#34 Dust in the wind on 04.09.13 at 9:10 pm

enough stupid jokes on my part, great article.

#35 FI Guy on 04.09.13 at 9:11 pm

Not a surprise ofcourse, but residential mortgages are slowing rapidly in the biz….everyone is a little worried.

Off-topic of today’s post, but ever notice how the big economists never do any sort of analysis on CMHC or Genworth? Try to find any balanced critique of a mortgage insurer published by a large FI in Canada…doesn’t exist.

#36 jayes on 04.09.13 at 9:14 pm

Hey garth, would love an insurance primer. I’m currently on year 2 of a 10 year term paying around 35 a month.. wife is paying 65 for universal

You win. — Garth

#37 Angie on 04.09.13 at 9:18 pm

Could you annoy the life insurance people, I’d like to hear your opinion.

#38 Dean Mason on 04.09.13 at 9:20 pm

Garth, the 0.90 increase in interest rates looks like your talking about the new mortgage rules that came into effect on July-9-2012 but was equivalent to 0.90% mortgage rate increase. If this is what you are implying than you are correct. The only thing is that only mortgage rates increased by that much not other interest rates like GIC’s,government bond yields etc.

I understand what you mean,Garth.

#39 Dust in the wind on 04.09.13 at 9:21 pm

No American style crash. I am wondering whether it would not be better to have a short severe crash and quick return to normal vs. years of economic agony.

As with this debt… I am not sure what would fuel future ‘growth’ . The only thing I am sorry about is that the banks would be spared. Thanks to F.

#40 Clint on 04.09.13 at 9:26 pm

#24 White Rock Mom
Are those %’s increases or decreases you are predicting?

#41 Dust in the wind on 04.09.13 at 9:26 pm

Why is universal life worse than term? Term normally becomes very expensive at old age while universal – less, due to inflation, still leaving something worth inheriting. It is like investment. Unless one expects significant inflation…
Also if you get term (10 years) and get sick in the meantime of let’s say cancer you might not be able to renew.

#42 Investx on 04.09.13 at 9:32 pm

“But that doesn’t mean you should expect a 40% crash in High Park or the Beaches in Toronto, nor Westmount in Montreal or West Van. ”

Why not, if prices bubbled by that much and as a result of cheap rates and lax lending? In fact, isn’t thehomes over a million dollars that can’t be CMHC insured?

You’ve never explained why such areas are immune to reversion to the mean.

Why is it different there?

Asked & answered. — Garth

#43 hobbygirl on 04.09.13 at 9:35 pm

Any thoughts on the effects of the Temp Foreign Worker program will have on the economy? I for one am going to a credit union that does not outsource…I will be doing my research for a good ethical independent. I have no debt and RBC will miss my $ (not) unless you hear a stampede of people doing the same thing.

Gotta love grass roots action.

Zero effect. Non-story. — Garth

#44 Keeping the Faith on 04.09.13 at 9:39 pm

Sue, Get a clue and get out of that house immediately.
It will be the worst move you ever make.

Signed,
The black, one-winged crow

#45 Bigrider on 04.09.13 at 9:44 pm

This notion that you continue to perpetuate that demand areas will not experience a ‘ melt’ as large as non demand areas is wrong and misleading when these same areas have experienced the largest price increases/ distortions relative to all areas.

So what if they drop 5 or even 10 % less.

A change in sentiment towards real estate will affect all areas.

An argument can equally be made that areas that have experienced the greatest price multiple distortions over past 13 or so years in this RE ” bull” market will experience greatest declin

Too simplistic. Demand areas are ‘demand’ for a reason – transit, centrality, homogeneity, catchment areas or the income barrier. The same cannot be said of monster homes in some minivan-infested, subarctic corner of nouveau riche Vaughan. — Garth

#46 Kessel on 04.09.13 at 9:45 pm

Garth, if housing has more than doubled in the last ten years then why is a 50% correction not possible.

#47 DreamingInTechnicolour on 04.09.13 at 9:54 pm

Some nutjob in North Korea could upset the world’s entire economic system if we are not careful

#48 Scooter Oslo on 04.09.13 at 9:54 pm

#41 Dust in the Wind

I think you want to look for a term policy that is renewable. That way if you do happen to develop cancer, you can still renew your policy.

Just signed up with the wife for our Term policies. I gotta say the advisor in Richmond was great. My cousin had encouraged me to get a whole-life policy and to get Critical Illness too. The advisor straight up said “waste of your money at this point in your life” Very refreshing to hear.

#49 Dwilly on 04.09.13 at 9:57 pm

Garth, #17, etc,
Ditto, would love some perspective on insurance policies as well!

PS, live in Durham region in the GRAND, and a friend just sold their 1400sqft semi in a nice area for 25k over list. On the market one week, had 4 offers at the end, and went for 315k on an asking price of 290. Sure not seeing that softness here yet….

#50 Frustrated Kiwi on 04.09.13 at 9:59 pm

Anecdote you and your readers might be interested in. I was listening to commentary on Auckland’s housing boom on National Radio here in NZ yesterday and the panel made a passing comment about Canada’s declining housing market – it was said as a statement of fact with no question about it. It was in the context of whether Auckland’s housing market might correct without an external trigger, with the premise being that as Canada had no obvious trigger so might we also begin to decline without one.

#51 Math....man on 04.09.13 at 10:05 pm

Went to look at a BMW a few weeks go, sales guy has called me 5 times in two weeks. Everywhere I go in the gta stores are empty, restaurants not very busy…..people are tapped out, plain and simple and people selling things are exhibiting desprtion type behvior.

The Canadian economic survival story of the past 5 years is nothing other than financially engineered extremely accommodative monetary policy. We are going to have a nasty crash, as so much of our economy is tied to re as Garth has recently alluded to. Without CMHC, house prices would be half of what they are today on average, with some exceptions. The wealth effect is a very powerful force and when the tide changes look out below. Dublin,Vegas,BArcelona,BUdapest, Phoenix, Cali….van,to,MTL.

#52 Tom Vu on 04.09.13 at 10:07 pm

I will soon have Donald Trump at my next seminar:

Golden Rule/z:

–Buy Low – Sell High ….or market RE till eyes are brown
–Buy toupee with 1000 year shellac warranty
–Have plastic surgery so face in perma- arrogant position
–Marry person at minimum 1/3 your age and with funny accent.

Life is simple if you keep it simple.

#53 Shot Ski on 04.09.13 at 10:15 pm

A rare bit of data from Mr Turners favorite place in B.C.;) http://energeticcity.ca/article/news/2013/04/08/sales-down-prices-up-in-fort-st-john-real-estate-market

#54 joe on 04.09.13 at 10:21 pm

Pleas tell us about life insurance! i have been reading this website for some time and love your style. I cant wait to hear you tell us about life insurance!

thank you

#55 Sparky55 on 04.09.13 at 10:23 pm

Hi Garth

When it’s time to buy, is it better to put 20% down and avoid CMHC premiums or put 5% down, and pay the premiums?

House will likely be in the $500k-$800k range. Have my eye on one, but waiting for it to drop another 15-25%. Current situation no debt, Rule of 90 and debt ratio would be well in our favor, First time buyers, can take advantage of RRSP HBP

I originally thought best to avoid CMHC premiums and plop 20% down, but not so certain now.
Considering 20%+ down can allow a longer amortization, thus lowering the monthly payment to allow future investing etc, and allowing inflation to have a longer compounded effect.
5% down allows keeping significantly more money up front, but has CMHC premium and a larger monthly payment and shorter amortization. Inflation has less time to compound, but there is more of the principle to inflate away.

#56 Bigrider on 04.09.13 at 10:30 pm

#45 Garth’s reply to Bigrider – ” too simplistic demand areas demand for a reason…. Nouveau riche Vaughan”

You’re point of view simply cannot explain nor justify the more than 3 fold increase in prices places like Leaside have experienced.

What, past 13 years all of a sudden leaside and Lawrence park have suddenly become as cache as central park in NY?

Or could it be the 800k mortgages that are being carried by 200k plus income households that need to be there for various ” yuppy” held beliefs?

Like I said, demand. — Garth

#57 Investx on 04.09.13 at 10:41 pm

#46 Kessel on 04.09.13 at 9:45 pm
Garth, if housing has more than doubled in the last ten years then why is a 50% correction not possible.

——————–

Reversion to the mean doesn’t apply to Canadian homes, apparently.

It’s different here… and Garth avoids addressing this aspect.

There will be no 50% coprrective phase. But over time nobody can know where the bottom lies. — Garth

#58 franke le skank on 04.09.13 at 10:43 pm

More important than this RE nonsense, what will people do if LCBO goes on strike? I can’t drink beer all the time. Anyone want to assemble a crew to drive to QC and dry out the SAC?

#59 Fellwo bears, your help is needed! on 04.09.13 at 10:46 pm

http://tinyurl.com/cjttdgy
I think that these guys here need to hear your voice.

#60 Pr on 04.09.13 at 10:49 pm

…doesn’t mean you should expect a 40% crash in High Park or…
At 2,5% rates ok. But at rate 6-7% and up, I think so.

#61 Austrian school on 04.09.13 at 10:51 pm

#47 DreamingInTechnicolour on 04.09.13 at 9:54 pm
Some nutjob in North Korea could upset the world’s entire economic system if we are not careful

I would be a little more concerned about this,

http://www.reuters.com/article/2013/04/09/us-japan-economy-abe-aide-idUSBRE9380BO20130409

#62 Bigrider on 04.09.13 at 10:56 pm

#56- Garth to Bigrider- ” Like I said, demand”

Demand , supplied easily by the ease of money.

For Leaside and Lawrence parks sake, let’s hope that there is no hiccup in the careers or cost of ownership for these ” status seeking” ” cache dwelling” individuals.

I can tell you that the ” nouvea riche” areas of old Richmond Hill( Vaughan I guess) find many old timers whose million dollar homes ( agreed over valued)are fully paid with plenty more savings to boot who will not be affected by any hiccups in affordability or career changes.

By the way , these people fine with driving Kias as well.. LOL.

#63 KommyKim on 04.09.13 at 11:03 pm

Life insurance:
“I promise to pay your spouse/child/etc some money AFTER you are dead. Trust me.”
LOL!

#64 Van guy on 04.09.13 at 11:04 pm

#14 Spiltbongwater on 04.09.13 at 8:49 pm
Don’t forget last year you predicted interest rates would be higher.

They went up .9 per cent on July 9th. — Garth
——————————————————
Nice try Garth. I give you one thumb up for calling the amortization to be cut back to 25 years. But we are still waiting for the pin to pop this bubble! That pin is, interest rates. Rates must rise for market to tank!!

#65 Bigrider on 04.09.13 at 11:05 pm

I would add to my argument in # 56 and # 45 that because of the “homogeneity” you mention of these areas , that they may be more vulnerable than some areas of the suburbs. That” homogeneity” not referenced by high income levels you rightfully point out, but by attitudes of superiority you fail to mention.

Such attitudes the downfall of many.

#66 Cory on 04.09.13 at 11:15 pm

Loser realtors in Calgary saying there’s a condo boom on and million plus homes on fire.

Condo boom? New condos won’t be built for a few years, dummies put deposit down ( buy now pay later ) then get Kim Campell’d!!! Love it

#67 Mark on 04.09.13 at 11:16 pm

Garth, only 15%? You’re being way too generous.

#68 Timbo on 04.09.13 at 11:16 pm

http://www.cnbc.com/id/100628967
“U.S. crude stockpiles rose by 5.1 million barrels during the week to April 5, data from the American Petroleum Institute showed late on Tuesday, sharply higher than the 1.4 million predicted by a Reuters poll of analysts. ”

Inventory is growing….could we here -90 oil soon..?

http://finance.yahoo.com/news/survey-surprise-drop-pay-across-212831149.html

“The Payscale index, which measures quarterly changes in pay in 15 broad industries, ticked downward in the first quarter of 2013, the first decline in nearly two years. During most of 2012, pay rose at the fastest pace since before the recession, as the following chart shows. So the first-quarter decline interrupts a pattern that seemed to reflect a healthy recovery.”

Wages are not rising but debt is . Haven’t we seen this before?.

#69 Derek R on 04.09.13 at 11:23 pm

#63 Van guy on 04.09.13 at 11:04 pm wrote:
But we are still waiting for the pin to pop this bubble! That pin is, interest rates. Rates must rise for market to tank!!

Don’t be so sure. There are other pins which could do the job. Tax and unemployment rate rises in particular. And either is more likely than interest rate rises in the next 9 months. Can’t rule out a change in public sentiment either — Garth’s Greed and Fear. Fear could kill prices just as effectively as any of the other three “pins”.

#70 Saskiboy on 04.09.13 at 11:28 pm

How ’bout a pic of Amanda Lang in yoga pants. You got connections. Need something to warm a guy up in this frozen waste!

#71 Godth on 04.09.13 at 11:28 pm

#60 Austrian school

For all we know the N. Korean saber-rattling is an extension of China’s response to Japan. The Chinese aren’t happy about this race to the bottom.
How long until Japan (or England or ?) impose negative (real) interest rates.
I’ve got my popcorn.

#72 Shawn on 04.09.13 at 11:31 pm

WHAT WILL FUEL GROWTH?

Number 39 Dust in the Wind says:

I am not sure what would fuel future ‘growth’

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

Real GDP per capita has been growing for centuries. Growth is slower now.

But growth will continue fueled by past and future investments. By human ingenuity. By science. By increased productivity in all walks of life.

Can you imagine how much will spent on pharmaceuticals and the pursuit of longevity in the next few decades by boomers? That is economic growth.

The sun will rise tomorrow and every tomorrow and despite occasional recessions real GDP per capita will continue to rise decade after decade and in most years as well.

It will rise in Canada and the U.S. and it will rise a lot more in Indian and China and Africa.

Debt never has been and never will be a deterrent to growth. In fact it fuels growth. It’s lack of the ability to borrow that prevents growth. Remember 2008? To lend is to share. If lending is divine, so is borrowing (borrowing for the right reasons that is).

Anyhow whether the world grows or not, YOU can grow YOUR wealth. We can’t control the world but we can exercise at least some control over ourselves.

#73 angel on 04.09.13 at 11:34 pm

australia doubles tax on retirement savings …. cyprus all over again just papered differently
http://www.businessinsider.com/the-next-domino-australia-doubles-tax-on-retirement-savings-2013-4

#74 :):( Ying Yang on 04.09.13 at 11:35 pm

#60 Austrian school on 04.09.13 at 10:51 pm
#47 DreamingInTechnicolour on 04.09.13 at 9:54 pm
Some nutjob in North Korea could upset the world’s entire economic system if we are not careful

Don’t worry the half life of irradiated land is only 50,000 years. But short term better dump Samsung and Kia stocks. Don’t eat any Kobe beef either! It would be nice to see China reel in that short little weasel and skin his skanky hide. If Kim $hithead does pull the trigger I guarantee USA will retaliate heavily. Buy war bonds now!

#75 GoldnSilver on 04.09.13 at 11:42 pm

#63 Van Guy
[Nice try Garth. I give you one thumb up for calling the amortization to be cut back to 25 years. But we are still waiting for the pin to pop this bubble! That pin is, interest rates. Rates must rise for market to tank!!]

No, it won’t be interest rates. It will be demographics. And its only just begun.

#76 John Prine on 04.09.13 at 11:47 pm

Why is universal life worse than term? Term normally becomes very expensive at old age
******************************************

When you reach ‘old age” you should not need any life insurance because you have paid off your mortgage, invested a little every month………

#77 islander on 04.10.13 at 12:05 am

A little story about insurance. First let me set the scene. During and after WW2 when I was still in school, my home used to get a visit every week from the Prudential Insurance man. He came on a bicycle, his trouser bottoms held in with clips, and he collected a number of pennies from us for our life insurance and a couple of pennies for Mutual Aid, a kind of savings program which returned the money to us in a lump sum just before Christmas, usually in the form of one or more huge, white paper, 5 pound notes. The Pru was considered absolutely trustworthy so when I came to Canada, in 1960, and was approached by a Prudential salesman I bought a life insurance policy for $15 a month which would pay my young family $10,000 in the event of my death. It had a clause that my policy would participate in Prudential profits.
Almost 50 years later after paying the premium faithfully every month, now by direct bank payment, the accumulated profit amounted to over $30,000 and this was a designated garanteed amount to be paid out in addition to the $10,000 life insurance in the event of my death. It had served well as a rapid temporary loan with a fixed interest rate of 6%; great when bank rates were 12% and more. During this time the Pru had been bought out by a series of large companies but the system carried on, until one year, 2008 I think, there was a little note saying the money would no longer be garanteed, only the $10,000 life insurance. I questioned it and was told not to worry it would still be paid out. The next year the same disclaimer of no garantee came along with the annual statement; by this time the world was not looking so rosy so I collapsed the policy and took my $30,000. I was sad, it was such a good deal. By now the annual increase in value was going up exponentially, over $1100 per year, yes, I charted it every few years, and I was still only paying the $15 per month ($180/yr). The risk reward just got to be too big a spread.
Wonder if they still give out deals like that!

#78 Patiently Waiting on 04.10.13 at 12:16 am

Combined sales of Fraser Valley Real Estate Board & Vancouver Real Estate Board for Single Family Homes in the last 30 days are by 53% below 2009, 64% below 2010, 68% below 2011, and 59% below 2012.

Year Sales

2009 1833

2010 2381

2011 2667

2012 2069

2013 854

pw

#79 Patiently Waiting on 04.10.13 at 12:26 am

Sales in former HAM heaven White Rock for Single Family Homes in the last 30 days are 48% below 2009, 66% below 2010, a stunning 82% below 2011, and 59% below 2012.

Year Sales

2009 96

2010 140

2011 263

2012 114

2013 47

pw

#80 Soylent Green is People on 04.10.13 at 12:27 am

“I need some opinion Garth”

Lolo

#81 Roial1 on 04.10.13 at 12:47 am

Life insurance, You bet you are going to die. They bet you are going to live. ————HUH?

#82 As predicted — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer™ on 04.10.13 at 12:58 am

[…] A year ago I managed to irritate the sackcloth-&-ashes crowd, who come here daily to flub, by making three predictions: House prices nationally would decline by 15%. After that would come a long, slow melt lasting years. And traditional demand areas would be largely spared while some markets – and most burbs – would be whacked. Continue reading → […]

#83 Patiently Waiting on 04.10.13 at 12:59 am

I think White Rock mom you may be on to something … here is a $600,000 price reduction in White Rock today …

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1331850804&s=BRC&t=BRC

pw

#84 Ski Goddess on 04.10.13 at 1:11 am

You mentioned Whistler, where I live. I have been watching several SFH properties and vacation condo type properies over the last decade and I have noticed significant reductions in just the listed prices. And they’re still on the market.

A 2 bedroom Northstar condo 5 years ago was bought by a client of mine for $720k. Now the same type of units are listed at $489K. There is an old a-frame cabin in one of the residential areas that started at around $1.2 million, now listed under $700K. Also a big McMansion listed a 10 years ago at $3 million, now at $1.6 mill and still sitting.

And when it’s actually cheaper to rent a holiday condo per night now than it was 10 years ago, it’s easy to assume these giant holiday home mortgagees are in trouble.

I’m no economist or avid statistics digger-upper, but it’s obvious in the market here that bad things are afoot.

#85 lookoutbelow on 04.10.13 at 1:19 am

So the bear case is so strong, you would almost have to expect a “dead cat bounce”. You would think with all the money printing (QE) around the world, maybe soon in Canada, housing would be a hedge…

I see a sea of pesimistic opinions and economic numbers leading to a “perfect storm”:

1. Unemployment, scary March numbers
2. Canada GDP forecasts around 1%
3. Business Investment slowing
4. Record Household Debt
5. Weak Retail Sales, consumer tapped out
6. Weak Commodity prices and….
7. Deflation coming, it’s already here in housing

Remind you of Tokyo real estate in its hey day. The “Deflation” word is the scariest, as the Central Bankers don’t quite know how to get out of that spiral.

“Gonna have to pay the piper”. Soon.

#86 Musty Basement Dweller Wannabe on 04.10.13 at 1:44 am

I have a suggestion for people waiting for the prices to go down. (i.e. the posters that say they don’t see the prices coming down yet). Don’t look at any of the average price stats.

Instead look at stuff for sale in the neighborhood you are perhaps interested in buying in. Then find out what comparable stuff sold for about a year or two ago.

If it is the west coast of BC, you will figure out very soon that prices have already SIGNIFICANTLY dropped more than any official stats you may find.

#87 angel on 04.10.13 at 1:53 am

awsome news S&P 500 record high ,so i guess its time to sell RRSPs RSPs TFSAs all investments ???? you know sell high buy low, everyone of my friends are getting in even the cab driver is giving me advice on getting in before I’m priced out of the investment world ,lol herd mentality … think thats my cue to get out then get back in when its low again after the crash. I remember all them dummies buying nortel for $120 and rimm for $220 when I was dumping them while they were telling me I was nuts for selling such great earning companies

#88 aggie on 04.10.13 at 2:05 am

Also looking forward to the life insurance topic. I’ve been paying $67/month for whole life insurance since ’89 when my two kids were still at home, with 50K to go to each of them.
I’ve always thought that it was a small amount to pay, in case I never otherwise have something to leave them after I go.

On the other hand, it seems rather depressing to just stop paying it and get nothing for it, until I realize I could live another 20 or 30 years!

I had been topping off the monthly premiums, and the annuity had been growing quite nicely, then started diving the past year or two. Admin fees seemed to be bigger. I pulled out the cash value to help cover the shortfall when I sold my condo late last summer, and reverted to premium-only payments.

I’ve talked few times to the agent who replaced the original kindly agent, never had a good gut feeling about her, so didn’t warm to her invitation to meet and discuss other options.

And meanwhile, I keep paying… wondering if there’s a better way to stop, than to simply stop.

#89 popados on 04.10.13 at 2:43 am

richmond is having sales again ,will keep vou posted on nephews 2.3 mil on market 6 months,

#90 Aussie Roy on 04.10.13 at 2:44 am

Aussie Update

Sick and tired of the “Aussie house bubble” goes viral

Frustrated, outraged and saddened: Generation Y is blaming baby boomers for their housing market woes.

Oh man, I’m tired. I’m tired of the endless emails from my ever-optimistic girlfriend. The ones with links to real estate listings of rundown, two-bedroom, inner-city dives that neither of us really want to live in and, together, we can’t actually afford.

I’m tired of the weekends spent travelling from one underquoted property to the next, only to be left feeling like an idiot when an auction opens above what would have been our final limit. I’m tired of the car trips back to our rented home, with my hopeful girlfriend talking about how the next property might be the one where we can raise some kids together.

I’m tired of explaining to my peers how negative gearing works, and then explaining why allowing investors to speculate on the housing market is to the detriment of our generation.

http://www.smh.com.au/comment/sick-and-tired-of-chasing-dreams-of-finding-a-home-20130404-2h9i4.html

http://www.whocrashedtheeconomy.com/blog/2013/04/sick-and-tired-goes-viral/

Bank boss joins strike over property prices

Bank of Queensland CEO Stuart Grimshaw is just one of a growing number of individuals who can’t justify property prices in this country, and chose to rent instead.

According to the Courier Mail, Mr Grimshaw rents a home in inner Brisbane.

“Property in Brisbane is a bit expensive,” said Mr Grimshaw.

“Where I’ve looked to buy (here), I just couldn’t justify the prices.”

http://www.couriermail.com.au/realestate/buying/boq-boss-says-brisbane-homes-overpriced/story-fndboawi-1226613082529

http://www.whocrashedtheeconomy.com/blog/2013/04/bank-boss-joins-strike-over-property-prices/

#91 AisA on 04.10.13 at 2:48 am

Nice areas are going to get bitch slapped, not so nice and or out of the way places will get the ole head stomp action. Nothing to be confused about there.

-70% bleed the corpse dry style craters, probably not so many of them, but come on now… how excited do you get at 10% off on disposable razors? Yeah, I compared buying a house to buying a pack of disposable razors… whattaya gonna do abouwt it annnh???? LMAO @ 10%

Seriously, on the way up people will climb over each other to make 5% if they think they can get it. On the way down, in any market, they want BARGAINS.

We will look back at history and call the first wave of knife catchers, the “Soft Landers”.

#92 Humpty Dumpty on 04.10.13 at 3:10 am

Its the Festival of Greater Fools….

http://www.zerohedge.com/contributed/2013-04-09/federal-reserve-dope

Come on G… The 2016 pic is pretty funny…

#93 FTP - First Time Poster on 04.10.13 at 3:32 am

Wow Garth – you family holiday photos are pushing the envelope a bit. Time to start using someone elses photos.

#94 BillyBob on 04.10.13 at 3:38 am

@#21 Something

I don’t understand. On the one hand

“Companies will do what ever it takes to reduces expenses to make sure the share holders get the biggest share, but in the end the Canadian consumer will not be able to buy products and services from these companies.”

yet

“That’s where I was agree with you, but I’m out of stock, bond etc markets.”

Companies are maximizing shareholder value yet you have exited equities?

Nope, have to agree with Garth, investing will be the way forward, not in hard assets but intelligent diversification in equities. For the very reason you mention.

Hate the banks? Get your revenge by buying their stock…

#95 Tony on 04.10.13 at 3:46 am

Re: #7 Brag Lamb on 04.09.13 at 8:29 pm

A ten percent fall annually in prices over 5 years is 50 percent. That might be perceived as a crash. The epitome of the greatest fool can be seen in High Park and Leaside in Toronto as anyone buying now that isn’t downsizing is buying a ticket to instant personal bankruptcy… an average loss of one half a million dollars looking out 5 years in the future.

#96 betamax on 04.10.13 at 4:19 am

#63 Van guy: “Rates must rise for market to tank!!”

Thanks for the thoughtless cliche. Now explain the US and European housing crashes.

#97 The real Kip on 04.10.13 at 5:42 am

“In 1990-91, the trigger was a huge increase in interest rates.”

I recall the huge increase in interest rates as being in 1980-81 when they spiked to 22%. I had friends who lost a $100,000 house then because they could not carry $22,000 in annual interest payments.

I bought a place in 94 with 8% interest over 5-years but that was pretty good compared to the early 80’s. I recall we had a fellow named Trudeau running the show then too.

#98 EIT on 04.10.13 at 5:50 am

Bitcoin is going absolutely crazy vertical. What was the argument for it being a commodity?

#99 Devore on 04.10.13 at 6:04 am

#25 An Cat Dubh

Seems to be a few businesses that are closing in the Okanagan and moving to Alta. Must be the spectre of the NDP and the fiscal socialist Liberals planning more phony carbon taxes, etc.

Or maybe it’s the shallow (and hollow) local economy and devastated real estate?

If you haven’t noticed, thanks to the carbon offset nonsense that was exposed recently, there is increasing support for getting rid of the “carbon tax” as well. At the least, it will be an uphill battle for introducing more useless green taxes.

#100 Devore on 04.10.13 at 6:08 am

#29 Mike

Is your land going to be generating any income? You might be holding it for many years, while city planners, developers and the housing market do their thing.

#101 Bigrider on 04.10.13 at 6:51 am

Hey ,I always thought that the west side of Vancouver was just as ‘cache’ as Leaside and Lawrence Park, yet prices there are down 20% or so from their all time highs.

Yet our host believes that cache areas in T.O will be spared the damage??

Me thinks he may be suffering from same ” it’s different here ” affliction he speaks much of.

Westside average price is 200% of the average Leaside price, in a city 65% smaller. Figure it out. — Garth

#102 Bigrider on 04.10.13 at 6:59 am

#94 Tony-

I agree with you on vulnerability of ‘cache’ areas and would add that many who have bought in high park, leaside(especially) and lawrence park have stretched themselves into debt so extensively that any hiccup in career, interest rates or other life shocks will force them into immediate hardship and force sale of home, driving down prices in that area.

Not so ,in some of the older areas of Vaughan where home owners actually own their homes, have cars in the driveway that are 10 years or older and drink home made cheap wine.

Most importantly of all, these same suburban people carry no pretense at all.

You comments suggest a social prejudice more than an economic premise. You need to get downtown more, where they have real wine. — Garth

#103 Devore on 04.10.13 at 7:35 am

#85 Musty Basement Dweller Wannabe

If it is the west coast of BC, you will figure out very soon that prices have already SIGNIFICANTLY dropped more than any official stats you may find.

Been saying this forever. Average and median (and benchmark) prices are very sensitive to the product mix. Since over the last year affordability has not changed very much, if someone is in the market for a $600k house, they’re still buying a $600k house, even if prices are down 10%. They’re just buying more house for the same money vs what they would have gotten a year ago. Prices are still down, because there are more listing chasing fewer buyers. This is a Garth predicts; lower sales lead lower prices.

The benchmark simply reflects that the “typical” house looks like, which is a little too much like begging the question. This is why a Case-Schiller-style resale pair index shows a better picture. In Canada, Teranet serves a similar purpose. The problem with such an index though is that a) it trails, and b) it becomes less reliable in a low sales environment. There are ways to deal with those, but they tend to distort in various ways. Like in computing, no amount of processing can ADD data to a data set (be it a JPEG image or MP3 sound for example), it can only skillfully introduce good looking (or sounding) distortion.

#104 Raven on 04.10.13 at 7:45 am

Mike #29

Land as a long term investment is a bad idea! With market value assessment the taxes will outweigh any profit on resale. If the land is Draft Plan approved then the tax rate is much higher and decreases the return possibilities. Timing land to be built on without a confirmed sale to Builders is a fools play. How do you make a small fortune in R.E? Start with a big one!

Tomorrow is only found on the calendar of fools!

#105 Randy on 04.10.13 at 7:55 am

Land makes sense only you are farming…..farming for massive wind energy subsidies…

#106 JustTryingToProtectEquity on 04.10.13 at 7:58 am

In 1996, my wife and I bought a home in High-Park/Bloor West for $325,000. Eighteen months before we bought it, it was listed at $580,000. We know many, many friends and neighbours who fared far better than we did. Last Spring we saw many young couples buying homes with massive mortgages. All of them were taking out second mortgages or lines of credit to gut and fix their already ridiculously priced homes. I agree with most everything Mr. Turner says, but I do not believe Leaside, the Beaches, Bloor West, High Park, Rosedale, Baby Point, Forest Hill, etc. will not correct. I don’t see this being significantly different from 1989-1996. And, having now lived in High Park/Bloor West for 17 years, I know just how indebted new buyers and well established neighbours are.

All areas will correct, but some far more than others. That is my message. — Garth

#107 The real Kip on 04.10.13 at 8:11 am

Well, at least your condo crash won’t come to the high rise industry this year, we are building those 50,000 units no matter what. I’m riding this gravy train until the wheels fly off it!

Hey, on the plus side, when it does happen at least I still have my commercial drivers licence. Crane operators have to have it and I have driven tractor trailer in every state east of the Mississipi when construction slows. Imagine my surprise when I read here that truck drivers make 90k per year then I see rigs on the highway advertising that they need drivers. Welcome to Canada, where jobs that pay 90k a year go wanting.

#108 High Park will Crash - Already Started on 04.10.13 at 8:15 am

I live in High park over 20 years now.

It will crash 40%.
Not now but when upcoming 7 mega condo towers are completed plus year later.

We have been battling Daniels and other for years to stop
this madness but they keep coming like monkeys!

Big corruption on some levels is going on :
Along Bloor street from Keele to Jane street buildings over 4 stories where
NOT ALOWED top be built for last hundred years!
But now right there between Keele and Runnimede 4 Towers are coming!

We the residents of this neighborhood lost battle.

First to come is Daniels Mega towers on Bloor street between Oakmount and Pacific road
with 19 floors 320 residences and at least 200 automobiles.
And yes they will cut all 20 Oak trees that are at least 60 old.

When all towers are done Bloor St West will be useless street
(now its clogged only in the morning afternoon and weekends).

Street sidewalks are narrow and already crowded like inside of street car.
So keep building mega towers and keep destroying beautiful neighborhoods.
Pave all parks!

The hell burn High Park pave it and put another 37 mega condo’s (with view of the lake man !)
and turn Toronto in to crowded concrete canyon where we will sell coffee, shoes
And Boxes in the sky to each other…

I am going out of High Park before it crashes…I am long enough there to see
Decline year after year…

Come over for coffee Garth see it before its gone …

#109 Bigrider on 04.10.13 at 8:19 am

#102 -Garth to Bigrider-“your comments suggest a social prejudice..you need to get downtown more..real wine”

It is your belief that these ‘cache’ areas you mention will be spared the brunt of a price decline , despite what history has shown in these same areas, that suggest an elitist attitude. Afterall, if you are going to make unfounded accusations I can do the same.

I am downtown almost everyday. Parked in front of Duff’s wings with my motorcycle in leaside quite often in the summer months. Know many of the people and area quite well.

Well enough to know what they have done to their respective balance sheets and sacrifices they have made to live in that area and how precarious their positions are.

#110 Julia on 04.10.13 at 8:20 am

I attended a community meeting last night about a new condo proposal in my hood which already has the highest population density in Canada. Six more are at various stages of planning and approvals within a 2 minute walk. The condo crash can’t come soon enough. Crossing my fingers
Looking good though! http://www.businessweek.com/news/2013-04-10/toronto-condo-kings-retreating-to-avert-crash-mortages

#111 TurnerNation on 04.10.13 at 8:22 am

Maybe this blog is from the Primerican school of life insurance; “Buy term and invest the difference.”
(That felt dirty.)

#112 Bigrider on 04.10.13 at 8:23 am

#106- JustTryingToProtectEquity.

Could not agree more with you.

High Park/Bloor west has got to be ground zero for mortgage/debt implosion if RE prices start to show it’s cracks

#113 JustTryingToProtectEquity on 04.10.13 at 8:25 am

I do agree with your message, Mr. Turner, but you might be giving new buyers false hope. Any home that is currently listed over $1M in High Park/Bloor West (that would have easily sold in a bidding war last Spring) is now sitting unsold this Spring. The people who are wise enough to list the same quality home at $899K are getting anywhere from $850K to $999K. The reduction in prices is already happening. People want to live in “choice” areas, so much so that they are willing to go way out on a limb with their mortgages, their second mortgages, to please their spouse or their in-laws. I actually think (just like 1989-1996), you’ll see a greater correction in some of these neighborhoods. We’re seeing it already. A good friend of mine has been trying to sell in Rosedale for over a year. After a $300K reduction, still no bites. Again, the homes in High Park/Bloor West that are listed over $1M are not getting the bidding war action they did last Spring. They are sitting. Nobody is taking part in a bidding war that would drive an $899K home above $1M any more. There has been a major change, a significant correction already. It will become more pronounced as we move forward. As always sir, thank you very much for your tireless work. You have provided a tremendous service and good counsel to so many. You have literally saved people from years and years of financial heartache.

#114 Wes Mantooth on 04.10.13 at 8:41 am

Buy low sell high leads people to try and pick tops and bottoms… not an easy thing to do at all…

Buy strength Sell weakness… or buy high sell higher… or from the short side… sell low… buy lower…

#115 Timbo on 04.10.13 at 8:42 am

http://www.huffingtonpost.com/ethan-rome/big-pharma-pockets-711-bi_b_3034525.html

“The drug companies hold the power to charge America’s consumers whatever they want. Worse, Medicare — the nation’s largest purchaser of drugs — is prohibited by law from seeking better prices. The result of this shortsighted policy is dramatic. In 2006, the first year of Medicare’s prescription drug program, the combined profits of the largest drug companies soared 34 percent to $76.3 billion. And unlike other industries, such as Big Oil, drug companies get something even better than a tax subsidy — they get a government program.”

Pill popping train wreck is fast approaching….

http://www.cnn.com/2013/04/10/world/asia/koreas-tensions/index.html?hpt=hp_t1

“Japan has deployed missile defense systems around Tokyo, some Chinese tour groups have canceled visits to North Korea, and U.S. radars and satellites are trained on an area of the Korean east coast where Kim Jong Un’s regime is believed to have prepared mobile ballistic missiles for a possible test launch.”

Must create a PR campaign to stop Pentagon cuts.
North Korea is going to take over the world…lolrof!!

#116 MC on 04.10.13 at 8:43 am

Good morning Garth – it is always a pleasure to start my morning at work with you.

Unfortunately, I do not think that your message will reach those who need to hear it because they don’t want to hear it. Keep trying though.

Cheers,
Montreal CA

#117 Bigrider on 04.10.13 at 8:45 am

Garth-” All areas will correct, but some far more than others. That is my message”

Well , in that case I hope that those who have 1.5 million dollar homes in Leaside with 1 million dollar mortgages feel much better that their homes have only corrected by 20% as opposed to the 40% corrections that will be experienced by those in outlying areas on 500k homes with no mortgages..LOL

That is my message.

Bitter. — Garth

#118 Mithan on 04.10.13 at 8:57 am

Regina housing starts down 14% in march according to leader post.

Quick, buy another condo everybody, we are booming!!!!

#119 Frank le skank on 04.10.13 at 9:01 am

One thing I’ve noticed about the pro-RE crowd is that they wait for Benny Tal or one of those pumpers to release a non-substantiated comment that in their mind proves that its impossible for RE to lose value and then latch on to it. Comments like, “we need a pin to pop the bubble, interest rates need to rise before prices fall, get in before its too late, prices are decreasing from record highs,” have no factual basis and are fabricated without any due diligence or leg work to support these statement. Why do people blindly believe these scam artists? The reason is simple, they are making lots of money from it or own a house and have a lot to lose. No one wants to lose their cash cow and the feeling of being a sucker is not very fulfilling. Its psychology 101 and the RE crowd are in the first stage of grief which is denial, they are slowly transitioning to anger.

#120 MGTOW on 04.10.13 at 9:07 am

Hey, ‘Affluent Boomer’. Can you take your spam comments and go away already?

#121 Bottoms_Up on 04.10.13 at 9:17 am

Garth, would like to hear your comments on the proposed budget as there appears to be many proposals on closing tax loopholes. I’m sure you are steeped in the knowledge of the implications of all these changes.

Interestingly, I found this little nugget, if anyone knows of tax evasion occuring internationally where Canada is suppose to collect a tax, you can get awarded 15% of the tax collected if you are the whistleblower:

•The budget introduces the Stop International Tax Evasion Program. Under this program, individuals providing information to the CRA concerning major international tax non-compliance involving foreign property and/or transactions completed wholly or partially outside of Canada will be eligible for a taxable award of up to 15% of any federal tax collected (excluding interest and penalties), provided that the information results in total additional assessments or reassessments exceeding $100,000 in federal tax.

Summary of these proposals in the budget provided here:

http://www.deloitte.com/view/en_CA/ca/services/tax/tax-publications/ed924aae44f6d310VgnVCM2000003356f70aRCRD.htm

#122 not 1st on 04.10.13 at 9:33 am

Seeing as my post was deleted, I will ask again.

If the banks are giving out false information on the Real Estate market or the greater economy (CIBC), or are involved in extra balance sheet activities (RBC) or are involved in suspect business activities such as subprime mortgages and mortgage wars (BMO, Manulife), then how can one advocate investing in their stock?

#123 CalgaryGuy on 04.10.13 at 9:38 am

Dear Garth: Would it be possible for you to spend a column on Calgary and its real estate situation. I would really appreciate your thoughts on where Calgary is headed. Thanks.

#124 jess on 04.10.13 at 9:41 am

Vibes
http://www.federalreserve.gov/events/conferences/2011/rsr/papers/paper7/index.html

Real Estate Prices and Financial Crises

There is extensive evidence that the most important cause of banking crises is real estate booms and busts. Herring and Wachter (1999) document a wide range of boom and bust real estate cycles and their effect on banks. These episodes include Boston in the 1970’s and 1980’s, Sweden in the 1980’s and 1990’s, the Japanese bubble of the same period, and Thailand in the 1990’s.

Reinhart and Rogoff (2009, Chapter 13) provide a broad range of episodes where real estate played an important role in causing banking crises. These include the Big 5 in advanced Economies: Spain in the 1970’s, Norway in the 1980’s, Sweden, Finland and Japan in the 1990’s; the Big 6 in the Asian Crisis in 1997: Hong Kong, Indonesia, Malaysia, the Philippines, South Korea, and Thailand. Other examples from emerging countries are Colombia in 1998 and Argentina in 2001. Two interesting historical episodes are Norway in 1898 and the US in the Great Depression. In Chapter 16 they provide evidence of the important role real estate played in many countries during the Great Depression.
Finally, Crowe et al. (2011, Text Table 1, p. 5) give data on the relationship between real estate boom and bust cycles, banking crises, credit crunches and macroeconomic performance using a sample of 40 countries. For example, more than two thirds of the 46 systemic banking crises for which house price data are available were preceded by boom and bust episodes. In addition, 35 out of 51 boom and bust episodes were followed by a banking crisis…
=====
swedish – good bank /bad bank
Fokus reveals the untold offshore story of Sweden’s most famous real state speculator, who fled the country in 1989, owing the government and creditors nearly $500 million.
=============
naked swimmers
…exposes some 120,000 letterbox entities, offshore accounts and other dubious deals in more than 170 countries, in addition to the names of 140,000 individuals

http://www.icij.org/offshore/french-banks-under-palm-trees

#125 Timbo on 04.10.13 at 9:50 am

http://www.npr.org/2013/04/10/176677299/construction-booming-in-texas-but-many-workers-pay-dearly

“The economic collapse of 2008 brought with it an onslaught of wage theft, according to the Austin-based Workers Defense Project. At the end of the week, construction workers sometimes walk away with $4 or $5 an hour, sometimes less, sometimes nothing.

“Ninety percent of the people who come to our organization have come because they’ve been robbed of their wages,” says Cristina Tzintzun, the Workers Defense Project executive director.”

The system is not broken ..is it?

http://dailybail.com/home/david-stockman-weve-been-robbed-by-the-fed.html

“The Democratic Keynesians, as intellectually bankrupt as their Republican counterparts (though less hypocritical), had no solution beyond handing out borrowed money to consumers, hoping they would buy a lawn mower, a flat-screen TV or, at least, dinner at Red Lobster.”

Don’t listen Ben. Print to support prices because wages can’t…We must maintain the illusion….

Why do we care about the US Workers Defense Project? — Garth

#126 Bottoms_Up on 04.10.13 at 9:51 am

No more selling your house to your kids for $1:

•Where a taxpayer enters into a “synthetic disposition transaction”, being an agreement that effectively eliminates all or substantially all of the taxpayer’s risk of loss and opportunity for gain or profit in respect of a property, a disposition and reacquisition of the property, both at fair market value will be deemed to have occurred. Further, where a taxpayer is deemed to have disposed of and reacquired a property under these rules, the taxpayer will be considered not to own the property for the purposes of the stop loss rules or the foreign tax credit provisions. This measure will apply to agreements entered into on or after March 21, 2013. It will also apply to agreements entered into before that date if the term is extended on or after March 21, 2013.

#127 rosie "moving backwards" on 04.10.13 at 9:54 am

Not sure if this worked in Atlanta but TREB and others might want look into this. http://www.realestateprayerbreakfast.org/

#128 Gunboat Denier on 04.10.13 at 10:00 am

76 Islander – what deal? Your premium was something like 10 times the cost of term insurance, the difference being invested. Given your figures, and almost 50 years of payments, it made an average 5-6% return. And then they made you pay that rate to borrow your own money.

#129 Chris on 04.10.13 at 10:04 am

Thanks for the advice Garth. I waited 5 years for nothing to get a house in the popular area in Toronto.

Sounds like you want something you can’t afford. — Garth

#130 Kris on 04.10.13 at 10:10 am

Because paying a 0.9% premium on your mortgage for five years (in order to secure the 10-year rate) is way too expensive. That’s a 32% increase. Crazy.
————————————————————

The most important factor in making such a judgement is, by far, the RENEWAL RATE 5yrs hence, isn’t it? Even ROI has much less impact.

So Garth, you’re (almost) saying that 5yr rates in 2018 won’t be much above 5.5% or so..?

I said she is better investing the money and paying down the principal. Work on your reading comprehension. — Garth

#131 Piccaso on 04.10.13 at 10:30 am

America’s New Energy Boom Is Bust for Alberta

http://finance.yahoo.com/news/americas-energy-boom-bust-foreign-023100454.html

#132 jess on 04.10.13 at 10:47 am

country-by-country reporting

EU officials will meet Tuesday evening (9 April) for what are expected to be the final talks on radical new rules cracking down on corruption between extractive companies and third world governments.

Under the deal brokered between MEPs and ministers on the Accounting and Transparency directives, all large publicly listed and non-listed extractive companies would be required to declare all payments to and from governments over €100,000 on a country-by-country basis.

The payments, which will also cover a range of payments in kind such as preferential tax rates and the free use of buildings, would have to be published for each individual project.

http://www.trust.org/trustlaw/news/instant-views-eu-lawmakers-back-strong-extractive-transparency-law

This legislation will help create a new global benchmark for transparency in the natural resource sector. With this information, citizens of mineral-rich countries can ask hard questions of both companies and governments about the deals that they make. The secrecy that surrounds these deals has been fertile ground for the corruption that has too often blighted the development of natural resources.

Catherine Olier, Oxfam’s EU development expert, said:

“It’s excellent news that the EU is moving towards a law that will help ordinary people harness the natural resource wealth of their countries to be lifted out of poverty. But EU politicians today could have taken a bolder stance against tax evasion and corruption by including other sectors such as telecommunications or construction. Strikingly, poor countries lose more to tax dodging than they receive in aid each year.”

#133 Chris on 04.10.13 at 10:55 am

Sounds like you want something you can’t afford. — Garth

That is not correct. I can still afford to buy but with the run up in prices, the cost of ownership is more than I would have liked.

#134 JustTryingToProtectEquity on 04.10.13 at 10:56 am

#113 Chris

Had you bought in any of the popular areas in Toronto in the past 3 or 4 years, you would be in over your head. Prices are coming down in the GTA, in the outskirts first (as they did in 1989) and then in the pricier areas of Toronto. As evidenced by this March 2013 Official MLS Property Listing for the GTA:

https://docs.google.com/file/d/0ByrPFSoPLahJSE56TmxZN0RqdUE/edit?pli=1

Stick to the Rule of 90.

While I have often told the story of how my wife and I bought our Toronot home in 1996 for $325K (when it had been listed for $580K just eighteen months before), I also tell people about the first home we bought in Oshawa in 1989. 178K. After renovating it from top to bottom, we could only get $148K for it SEVEN years later. We learned our lesson. On a street of 12 homes, 5 couples broke up. The older, more established couples, with mortgages paid, sailed through just fine. But many couples found themselves under water.

Mr. Turner is trying to save you some heartache.

#135 JustTryingToProtectEquity on 04.10.13 at 11:05 am

Hello Mr. Turner, my last post was meant for “#129 Chris” rather than “#113 Chris”, I hope you can change the number in my post?

#136 Penny Henny on 04.10.13 at 11:05 am

#14 Spiltbongwater on 04.09.13 at 8:49 pm
Don’t forget last year you predicted interest rates would be higher.

They went up .9 per cent on July 9th. — Garth

No interest rate hike for those whose Debt Service ratio was not just squeaking by. Only for those who qualified by the skin of their teeth. And for those house horny’s they are saving more down payment waiting to get approved so that they can buy!

If the markets can defy logic and keep climbing, then why not housing.
Etobicoke sale prices up 10% from last year.

Penny Henny

#137 Ogopogo on 04.10.13 at 11:11 am

#25 An Cat Dubh on 04.09.13 at 8:56 pm
http://www.cbc.ca/news/canada/british-columbia/story/2013/04/08/bc-realtor-inspection.html

Never buy a house unseen like these people did. They bought a home in Kelowna sight unseen. The home inspector and realtor seemed to “overlook” a few things.
People like this ruin it for the honest people in any industry.

Seems to be a few businesses that are closing in the Okanagan and moving to Alta. Must be the spectre of the NDP and the fiscal socialist Liberals planning more phony carbon taxes, etc.

Great find. Thanks for posting. I’m passing this link to a few people here in Kelowna who are on the market so they can at the very least avoid this realtress.

Realtors have become so desperate here that they’re resorting to all kinds of trickery and sleights of hand to close fewer and fewer sales. Once I’m less busy at work I’ll share a few of these.

#138 msnyahoo on 04.10.13 at 11:16 am

Hey Garth,

I rarely see any mention of Calgary in your blogs… I am deciding whether to buy a home here or not. I have a young family of 2 small kids and a savings of 100 k ….

Prices seem so high, but rents are super high aswell…. We don’t know what to do…

Please advise…

#139 wilbur on 04.10.13 at 11:17 am

Spoke to a realtor in West Vancouver, he said nothing is selling unless it is selling at 30% off list price. People are starting to low ball offers.

#140 Ogopogo on 04.10.13 at 11:24 am

Further to the CBC expose of the nightmarish house in Kelowna, this goes to show why you should NEVER buy a house you haven’t seen first-hand. Why wouldn’t this house horny couple just rent for a year to get the lay of the land? Why rush to buy remotely from the Yukon?

As a Canadian, I’m embarrassed by how brainwashed we are as a nation of real estate cultists.

#141 Devore on 04.10.13 at 11:26 am

#114 Wes Mantooth

Buy low sell high leads people to try and pick tops and bottoms… not an easy thing to do at all…

Not really, only if you think in absolute terms, black and white.

As a diversified investor, you merely need to have more winners than losers to be successful. No one can hit everything out of the park. The secret is to know how to accept and deal with losses.

Buy strength, sell weakness? Sounds backwards. A value investor would say buy undervalued, sell overvalued. No need to pick an absolute top and bottom. There is always some stock or sector that is getting the crap kicked out of it for no reason you can rebalance into.

#142 John Prine on 04.10.13 at 11:28 am

#25 An Cat Dubh

Seems to be a few businesses that are closing in the Okanagan and moving to Alta. Must be the spectre of the NDP and the fiscal socialist Liberals planning more phony carbon taxes, etc.
********************************************
If they closed their business and moved to Alberta you can bet that there are other mitigating factors other than the spectre of the “commies” taking power in May. Fiscal management and hidden taxes can’t get any worse than they are now and with the way the economy looks over the next few years I don’t think it matters who is the government….They aren’t in control. Years ago it seemed that half of Alberta had moved to Kelowna and started small businesses…More than could survive and make decent money in the Okanagan which booms for 4 months a year then dies for the rest..Interesting times ahead for the cities of the interior without much more in migration.

#143 Musty Basement Dweller Wannabe on 04.10.13 at 11:29 am

Wow a full page ad in the Globe this morning by RBC.
They decided to have a Real Estate Agent Appreciation Week or something like that.

Probably a nice gesture, those dudes have a tough row to hoe these days.

#144 Chris on 04.10.13 at 11:48 am

#134 JustTryingToProtectEquity

I appreciate the info. But it doesn’t look like 2008 prices are coming back. Most definitely missed the boat.

#145 blinded on 04.10.13 at 11:51 am

Yah, finally the day is “beginning” to arrive.

But for years and years this blog said this would be happening, and for years we were waiting. Housing goes through cycles so if you call an up or down eventually you will be right.

Not your mom, dude. Take responsibility for your own decisions. — Garth

#146 Bigrider on 04.10.13 at 11:55 am

#113 -JustTryingToProtectEquity-

You saved me from making an almost identical post. Lucky you that you avoid Garth’s barb’s.

#117-“bitter”

No but you’re in denial.

#147 maria on 04.10.13 at 11:58 am

this past weekend I had my ex-best friend’s ex-boyfriend’s cousin randomly message me on facebook and ask if I know someone who is looking for a place to rent in downtown Toronto.

I haven’t seen or heard from him or the ex-best friend/ex-boyfriend in at least 6 years. This is desperation. I think he is just going through his list.

#148 Realtor on 04.10.13 at 12:10 pm

This post should actually depress anyone who plans to purchase a home soon and who has been reading this blog for the last three years.

Sounds like it going to take 3-6 years for the prices to hit the 09/10 level.
Great strategy , lets wait for over 6-9 years and buy it so I can tell people …..

You need a crash not a slow melt. Rent versus depreciation on a home will even itself out and there will be no value for you waiting.

Sure. Buy now and lose value for years. Great plan, realtor. — Garth

#149 Fed-up on 04.10.13 at 12:11 pm

@JustTryingToProtectEquity and Bigrider

———————————————————————–

I tend to agree with both of you. Although traditionally “demand” and closer to the core areas may have been slightly less affected in past downturns, the unprecedented run ups in prices in the trendy zones since 2005 may result in an epic correction for the deluded who paid 1 million + for a rat hole in these hoods. I hate to say it but from a pure $ point of view, these could possibly prove to be the hardest hit.

Only time will tell I guess.

And it will prove you incorrect. — Garth

#150 JustTryingToProtectEquity on 04.10.13 at 12:21 pm

#136 Bigrider,

Garth’s barbs are well warranted in many cases. I haven’t followed your direct interactions with him. Nor have I been on this site all that frequently. (I’m usually going toe to toe with Whazzup in the Globe & Mail or the National Post). But it is shocking to see how many people are taking his advice for granted. The Canadian housing market was following the exact same trajectory as the American one (look at the charts)until Mr. Flaherty artificially juiced the market. Now, we may not have suffered as badly as the Americans did 5 years ago… but… with Mr. Flaherty’s monkeying with mortgages… we may be in for a debt-fueled economic calamity the likes of which we have never seen. There are no soft landings. There are NO soft landings.

#151 Old Man on 04.10.13 at 12:22 pm

Life Insurance – there is no investment value worth looking at, so treat it as a cost expense only. The main purpose for life insurance is to protect one’s growing net worth in the early stages of life against a potential death or accident.

This will leave enough funds to pay for family members left behind. It is a way to create tax free wealth before such has been developed in life through employment and investing in the early years, and if one is married with children the wife needs to be insured as well; a wife taking care of children is a valuable asset.

Never be hooped into buying whole life with a term rider, as this is a commission play by the agent, and be sure the beneficiary named is never Estate going through a Will. I recommend 5 year renewable term with an accidental death rider for both husband and wife as two separate policies payable to each other.

Now for those that have a business partnership it is imperative that you insure the vested interest between the partners with a special insurance policy, as if there is a death with a partner the ramifications of taxation can be explosive for the others, and if there is just two look out for problems.

#152 Post Haste on 04.10.13 at 12:49 pm

I’d be excited to hear from those in the front trenches, sales, construction, manufacturing – wonder if things are changing – a buddy who works for Honda says they are working 6 days a week with little stopping – but car manufacturers are offering 84 months at 0% – what gives!!

My parents who are enjoying their golden years – well, my mom was telling me last week that at the mall she frequents during the weekdays – felt empty last week. She joked that she thought there must have been a bomb threat as she never saw the mall so quiet. Maybe this is a telling sign -However, I can shop at Costco and there is rarely a time when the lines aren’t 5 deep.

A few weeks into the new year my wife hit the major mall in Newmarket – signs everywhere advertising up to 70% off – we left the mall by noon on a Saturday – it was still pretty quiet then – makes you wonder!!

#153 jess on 04.10.13 at 12:54 pm

water etf’s
http://www.icij.org/projects/waterbarons/cholera-and-age-water-barons

..Since the companies prefer to be paid in American dollars, falling local currencies usually lead to demands for rate increases…

But the ICIJ investigation showed that companies frequently insist that all or part of their contracts remain secret. Regulatory authorities in Buenos Aires, Manila and Jakarta told ICIJ they often feel powerless in the face of demands from the water companies because they don’t have access to company figures.

When companies are fined for not achieving performance targets, they often don’t pay, preferring to appeal rulings in lengthy and expensive arbitration and court proceedings.

Even in developed countries, such as Australia and Canada, which generally have stronger regulatory bodies than poorer countries, privatization has weakened public accountability. In Sydney and Adelaide, Australia, major sewage treatment and water quality problems were kept secret from the public as regulatory authorities and the private companies argued over responsibility. In Hamilton, Ontario, a private company took several years before it agreed to settle fines after millions of gallons of sewage spilled into the streets and flooded basements.

Nor is there any assurance that the private companies are financially reliable. Since 1998, when Hamilton privatized its utility, the city has had five different operators. Two of the companies, one of which was Enron Corp., collapsed under the weight of fraud scandals. In a period of just five years, the concession has been owned by the city government, one local company, two American companies and was recently taken over by the German utility RWE.

“You don’t know who you are dealing with,” said Hamilton city councilor Sam Merulla. “When you deal with the private sector on behalf of the public sector, you need stability. In Hamilton, it has been a revolving door of international corporate owners dealing with one of the most precious things we have – water.”

#154 Fed-up on 04.10.13 at 12:58 pm

#149

And it will prove you incorrect. — Garth

———————————————————————-

I used phrases like “tend to agree”, “may result” and “could possibly”.

Let’s be honest, none of us really know until this will or will not happen. This insane market has proved every one of us wrong on several occasions.

Like I said, only time will tell ;)

#155 JustTryingToProtectEquity on 04.10.13 at 12:59 pm

#149 Fed-Up

This is actually a question for Mr. Turner.
Why, when the market corrected so dramatically in the pricier areas of the GTA, from 1989 to 1996, would it be different this time? The levels of debt are far greater this time in these areas, the job market is every bit as precarious? We have 70% ownership and these areas are where many of the 65+ year-olds live, in many cases
alone. Why would they not see a sizable decrease as they have before?

I previously published a chart of real estate values in North Toronto demand hoods over the opast 20 years. It speaks to my point. — Garth

#156 Joe Somebody on 04.10.13 at 1:02 pm

#122 not 1st

It’s rather moral question, and have nothing to do with money.

Welcome to the modern Canada!

#157 Old Man on 04.10.13 at 1:12 pm

#148 Realtor – am sure you just cracked a funny, as when this all hits the fan it will take a decade to recover from this train wreck in Toronto, and elsewhere, but as Mr. Turner has pointed out a meltdown will occur that will effect all of Canada in different ways of discounted velocity; not to mention that in each city different areas within will have a mix of discounted values for a variety of reasons. This is a very complex situation, but asset deflation is upon us all, as those that bailed out to rent a year or so ago were wise, as now might be a bit late.

#158 TomJefferson on 04.10.13 at 1:14 pm

Why are interest rates not rising? If the government can control interest rates so easily, why didn’t they do the same back in the day when rates climbed to 20% or so?

Because the economy is limping and jobs are being shed. — Garth

#159 all_we_need_is_mortgage on 04.10.13 at 1:20 pm

#46 …if housing has more than doubled in the last ten years then why is a 50% correction not possible…
____________________________________________
Because correction of that magnitude can cause a decline which will bring economy into an uncontrollable state. The elite will never allow that to happen.
First of all, because it would jeopardize the existence of the elite itself. Even half of that correction (25%) will bring the middle class into nonexistence. ( if those credit props will be removed, which are approximately 25% extra to the earned income, the middle class would be smashed to the ground instantly). Even now, with two incomes, family spend much less than a generation ago, they are stretched to the limit and left with nothing to save. The middle class supports the elite, providing conditions for its existence. Canada without a strong middle class? Unthinkable…

#160 Bigrider on 04.10.13 at 1:24 pm

#150 Fed up- ” time will prove you wrong”

Again no explanation has ever been given as to why ‘ cache’ areas have appreciated by a factor of threefold as opposed to 2 fold over past 13 years other than demand.

Demand has fueled all price appreciation along with easy money.

Leaside has existed for prior to the past 13 years, going through boom bust cycles like every other place but never with such an absurd multiple factor over and above other areas.

I have an explanation however.

Demand for this area and other cache areas by those motivated by status have now the free money able to satisfy such need. Therefore once the free money disappears or a career hiccup happens these areas are more vulnerable than others.
L

#161 Old Man on 04.10.13 at 1:28 pm

#154 Post Haste – I am been telling this room that everywhere I go during the week the small stores are empty, and there have been comments to support my observations. I say consumers are tapped out in two ways: either out of fear or out of cashflow. Costco is an exception, as drive by there daily with no less than 1000 cars in the parking lot, but not for me, but for discount family buying to save money. Now if anyone can buy a car for 84 months at 0%, one needs to know that the cost is buried in the principal, as nothing is free, and the paper being signed is being discounted somewhere else for a return on your capital.

#162 Holy Crap Wheres The Tylenol on 04.10.13 at 1:29 pm

Rev Sun Myung Moon could have solved the Korean issue with one mass wedding. Their matching and weddings are a direct and perfect manifestation of a profound theology and worldview. You see, Unificationists believe that all the problems on Earth, from the Gulf War, to child abuse, to the crumbling school system (you name it) are fruits of the fact that self-interest crept in to the family, the love between husband and wife, reproductive affairs, and parent-child relationships, thus since the beginning there has never been even one family whose members were not dominated by some significant degree of self-interest. We can even blame the crashing housing market on this one. Calling all North and South Koreans get your best wedding dress and tux, one, two, three OK now you’re all married now make peace. Now they should go honeymoon in Toronto and buy some downtown condos. Can you imagine millions of young Koreans eager to purchase a slice of pie in the sky! Brad Lamb is purchasing Rosetta Stone as we speak!

#163 JustTryingToProtectEquity on 04.10.13 at 1:33 pm

#157 Garth Turner

At 70% ownership (never before seen in Canadian history). With record high (and climbing) mortgage and non-mortgage debt. With 2013 marking the first year in Canadian history that 65 year olds and older outnumber 25 year olds and younger (and with 500,000 new 65 year olds being added to our population in each of the next seven consecutive years). Try as I might, I don’t think looking at North Toronto’s 20 year history will act as a model this time. 1989-1996 resulted in sizable corrections in many of the pricier areas of Toronto. I can’t imagine these areas not being hit hard this time. We’ve broken all records.

In 1991-3 the Toronto market lost a third of its value, demand areas went down by less than half. I expect a similar result. — Garth

#164 Canadian Watchdog on 04.10.13 at 1:40 pm

Bill Gross finally gets it. The joke is on him too!

@PIMCO: GROSS: Fed releases separate E-mail to congressional staffers and LOBBYISTS? This bothers me.

#165 John Prine on 04.10.13 at 1:47 pm

Realtors have become so desperate here that they’re resorting to all kinds of trickery and sleights of hand to close fewer and fewer sales. Once I’m less busy at work I’ll share a few of these.
**********************************************
It’s too bad that some realtors are like this, there have been quite a few in the Okanagan unfortunately but not all are like this, lots work very long hours and make an average living, my friends in the business tell me that most of their meetings spend a lot of time trying to educate vendors what their property will sell for now and that it is not the same as 4 or 5 years ago. Many sellers are greedy as well, people that bought a home 20 years ago for $84,000 that now are insulted because it won’t sell for $529,000 like the one down the street did last year…..They would sooner stay in the house than sell it and get on with their plans for other adventures in life which is so short as is, such a waste.

#166 bee on 04.10.13 at 1:48 pm

> “We all know the famous debate on variable vs fixed. But my question is: 5 year fixed at 2.79 or 10 year fixed at 3.69

Is that a trick question? Of course you go with 3.69 for 10 years.

What’s the likelihood the mortgage rate will increased by 1 percentage in 1 year — probably 0. How about 3 years? Maybe 50-50. How about 5 years — I would say that got to be close to 80-90%.

Garth’s argument was under the assumption that you could get 7% return on your investment. I know that’s achievable under his balance portfolio, I know …. but I imagine he is probably not interested to invest $500 of your monthly contribution.

Voluntarily increasing your mortgage payments for 5 years by almost a full 1% to avoid an increase that is unknown, while paying down no more debt, is a strategy appealing only to those who fear risk more than enjoy return. — Garth

#167 EB on 04.10.13 at 1:50 pm

” #98 EIT on 04.10.13 at 5:50 am
Bitcoin is going absolutely crazy vertical. What was the argument for it being a commodity?”

Is there any way to short bitcoins?

#168 Lower interest rates? on 04.10.13 at 1:57 pm

Garth, might our govt decide to reduce interest rates even more in response to the generally bad economic outlook? If not, why?

No. A credit bubble, eventually imploding, is more injurious than a recession. — Garth

#169 Old Man on 04.10.13 at 2:00 pm

I wonder how many of you know that Canada has a vehicle production company that is listed on the Tmx based in Quebec? A great looking car in production with no emmissions or noise that sells for about $12,000. I saw a youtube on this all and hope they make it, as it is called the Zenn Motor Company. In Canada we have people with a vision, and wish them well, as this has potential.

#170 Godth on 04.10.13 at 2:07 pm

#161 all_we_need_is_mortgage
“Because correction of that magnitude can cause a decline which will bring economy into an uncontrollable state. The elite will never allow that to happen.”

I don’t think “the elite” think in such myopic terms. We’re in the era of Globalisation. Joe Biden has been making some interesting comments lately. If we’re to be competitive with emerging markets who’s “standards of living” are going to go down? The days when 5% of the world population (N.A.) consume 20% of the resources are coming to an end. We can only hope it doesn’t get more violent. It likely will though.

#164 Holy Crap Wheres The Tylenol

You laugh, but there’s more than marriges going in an attempt to unify the globe. “It’s a big idea”.

#171 Axxman on 04.10.13 at 2:13 pm

#160 TomJeff – Low interest rates are like a veil on an ugly bride. What they are masking is not pretty – higher rates mean a steep drop off in home prices (and evaporation of the spin off employment which goes with that) and a higher dollar – which kills manufacturing. Rates should really be normalized and the inefficiencies in our system would be corrected over time – but the pain would be substantial. In the mean time – we will continue to see construction workers on the GO train.

#172 JustTryingToProtectEquity on 04.10.13 at 2:26 pm

#165 Garth Turner

“In 1991-3 the Toronto market lost a third of its value, demand areas went down by less than half. I expect a similar result. — Garth”

Less than half is more than a third.

It would be anecdotal for me to keep mentioning that I bought my house in High Park/Bloor West in 1996 for $325,000 after it had been listed for $580,000 just eighteen months earlier IF I didn’t know so many other friends and neighbours who benefited far more from the price decline.

$580K to $325K is indeed a decrease of less than half and more than a third. I’m getting mixed messages. Do you mean to say that the GTA will experience a decline of a third (around 25% to 30%) and the pricier areas half of that? Say 15%?

I think you’re underestimating your own good judgment.

This real estate pig is on its way to the slaughter house. And you know it.

#173 blinded on 04.10.13 at 2:44 pm

Yah, finally the day is “beginning” to arrive.

But for years and years this blog said this would be happening, and for years we were waiting. Housing goes through cycles so if you call an up or down eventually you will be right.

Not your mom, dude. Take responsibility for your own decisions. — Garth

—————————–

The above was an observation on your timing on a real estate downturn, dude. It has nothing to do with nor does it state any of my own decisions.

Would this make it easier for you to understand: A broken clock is right twice a day.

Wow. Let me write that down. — Garth

#174 observer on 04.10.13 at 2:57 pm

Garth – Brad Lamb is at it again, the sheep herder is trying to herd his Sheeples for the slaughter

http://whispersfromtheedgeoftherainforest.blogspot.ca/

“If you’d rather not eat cat food in your retirement, you’d better invest in condos.”

– Developer Brad J. Lamb.

OMG this guys had only 12 votes for the advisor poll. He’s worst that Bernie Maddolf.

#175 Joe Somebody on 04.10.13 at 2:59 pm

Garth, any comments on this?

It has a huge affect on the employment and real estate as well.

“US work visa issued every year 65,000.
Canada close to 300,000.”

Can we feed all this foreign workers and throw Canadians to shelters?

Nothing personal, only business :)

Xenophobia is a leading indicator of a failing society. — Garth

#176 Ralph Cramdown Ⓤ on 04.10.13 at 3:01 pm

#171 Old Man

I don’t know how long you’ve been in ZENN, but their current business model is waiting for an old man in Texas who claims to have the next big thing in batteries (he’d have written down the proof, but there wasn’t enough space in the margin). That stock is either going to the moon or zero, and my suspicion is zero.

#177 broadway skytrain on 04.10.13 at 3:04 pm

Zenn Motor Company

——————————–
a money losing, zero revenue, no products, no patents company whose only asset is 10% of a highly secretive, long promising never delivering(even demonstrating) , scam company from texas that does not even have a website?

yeah, get me in on that action!

#178 Bo Boka on 04.10.13 at 3:10 pm

“Scotiabank CEO to Flaherty: Stop meddling in the mortgage market”

Really?????? The bankster clowns are out in the circus again.

#179 JustTryingToProtectEquity on 04.10.13 at 3:12 pm

The best and only proper response to my last post is:

“Oink Oink”

#180 Bo Boka on 04.10.13 at 3:12 pm

#166 Canadian Watchdog

Surprised? Anyone here still believes the markets are a level playing field?
What a joke.

#181 Dr. Hoof - Hearted on 04.10.13 at 3:21 pm

Re: Prices current and future?.

If this was the 1980’s, you would have seen construction seize up….prices drop about 50% and lots of foreclosures all within a few months. Much of that would not have been via new construction either.

Now, we have ghosts cities, new McMansion homes built everywhere, not exclusive to any area. Many have already had 30%+ haircuts and still stay unsold.

I am now seeing heavy equipment parked for months on the pre – load site…I assume no work elsewhere.

The Buyer sets the price. When the dam of enough desperate sellers breaks….whole new ball game.

#182 Doomandgloomer on 04.10.13 at 3:26 pm

….so, are you saying that house prices are in decline, and it’s not a good time to buy? Are you saying that it’s more prudent to rent for half the price and invest the difference in a diversified portfolio of high yielding etf’s, preferreds, dividend paying stocks, bonds, and reits? Is that a better plan than becoming highly indebted by assuming an unpayable lifelong mortgage on a likely declining asset? Am I getting it? Hmmmmm……but I really like the granite countertops in that crackshack………

#183 Dr. Hoof - Hearted on 04.10.13 at 3:41 pm

#141 Ogopogo on 04.10.13 at 11:24 am

Further to the CBC expose of the nightmarish house in Kelowna, this goes to show why you should NEVER buy a house you haven’t seen first-hand. Why wouldn’t this house horny couple just rent for a year to get the lay of the land? Why rush to buy remotely from the Yukon?

As a Canadian, I’m embarrassed by how brainwashed we are as a nation of real estate cultists.

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

This is a universal law on human behaviour.

The more things cost, the more detached FROM reality people are.

Or…people will drive 10 miles to save $5 on a toaster…
BUT have no problem making a major purchase in 15 minutes , even site unseen.

#184 Humpty Dumpty on 04.10.13 at 3:44 pm

Even the CBC is in on the action….

The Secret World of Gold is a documentary exploring the power and politics of gold, a precious metal with more allure and fascination than any other. Valued for its permanence, beauty and scarcity, people will lie, cheat, steal and kill in the name of gold.

http://www.cbc.ca/doczone/episode/the-secret-world-of-gold.html

It wasn’t too valued today. Bear market. — Garth

#185 Dorf on 04.10.13 at 3:50 pm

“It’s the same argument which demolishes most life insurance policies.”

Looking forward to that article.

#186 jess on 04.10.13 at 4:06 pm

Study suggests kids make great investors (or their parents are cheating)
Research team finds investors under 10 years old guess right 72 per cent of the time

…The research team chose that relatively obscure stock exchange to study because Finland has open data laws and discloses the known ages of account holders…The trio looked at 671,438 different trading accounts that made stock trades between January 1, 1995, through May 31, 2010

#187 Old Man on 04.10.13 at 4:15 pm

#175 Ralph Cramdown – as take a hike, as when anything is too good for the masses, the Corporate machine will want to take them down, so saddle up and ride into the sunset, as know better, so do not challenge me with your booga booga.

#188 Humpty Dumpty on 04.10.13 at 4:30 pm

Another reason to thank the French…

http://blogs.wsj.com/economics/2013/04/09/why-canada-can-avoid-banking-crises-and-u-s-cant/

#189 neo on 04.10.13 at 4:43 pm

Garth,

Which will decline 15% first.

TREB average home prices

or

The Dow

Both appear to be rising on declining volume.

I expect an equity correction in the 5-7% range, timing uncertain. — Garth

#190 Timbo on 04.10.13 at 4:49 pm

http://bitcoin.clarkmoody.com/widget/chart/

a chart to behold….all hail ponzi

http://www.telegraph.co.uk/finance/economics/9982885/Europe-falling-behind-US-and-blighted-by-energy-costs.html

“Europe ‘falling behind US and blighted by energy costs’
Europe is falling dangerously far behind the US in productivity growth and is blighted by crippling energy costs, the pan-EU industry federation has warned. ”

time to turn the lights out…….

I think Europe will survive. Time to start buying. — Garth

#191 JustTryingToProtectEquity on 04.10.13 at 4:52 pm

#175 Blinded

Mr. Turner was right all these years. Canadian real estate sales and prices were following the same trajectory as American ones. Look at the charts. If Mr. Flaherty had not monkeyed with amortizations and allowed the CMHC to play with so many over priced mortgages, we would have seen a correction that would have been somewhat milder than the American one. Now, all bets are off. Never before, in Canadian history, has a Canadian finance minister created such a debt fueled economic calamity. Yes, prices have gone up over the last 3 or 4 years. Thank your lucky stars you didn’t buy in. You would have lost your shirt. Mr. Turner did the right thing. He warned us. Mr. Flaherty did the wrong thing. He toyed with our very economy’s future… so the Conservatives could win the election.

#192 johnny d on 04.10.13 at 5:10 pm

@#119 Mithan on 04.10.13 at 8:57 am
Regina housing starts down 14% in march according to leader post.

Quick, buy another condo everybody, we are booming!!!!

—————————————————————–

Saw that story in our local real estate flyer too.

http://www.leaderpost.com/business/Regina+housing+starts+down+March/8219626/story.html

Also saw this one a few days ago. Headline ‘Housing construction heats up in Regina during March’

http://www.leaderpost.com/business/Housing+construction+heats+Regina+during+March/8192719/story.html

Sounds like LeaderPost has a little bit of a bipolar disorder.

#193 Joe Somebody on 04.10.13 at 5:21 pm

Garth, any comments on this?

It has a huge affect on the employment and real estate as well.

“US work visa issued every year 65,000.
Canada close to 300,000.”

Can we feed all this foreign workers and throw Canadians to shelters?

Nothing personal, only business :)

Xenophobia is a leading indicator of a failing society. — Garth
================================

Or, I got it.

Money does not smell. Is it true, Garth?

By the way, I appreciate your blog and information, that can be read between the lines, that you provide.

#194 Bigrider on 04.10.13 at 5:22 pm

What the hell happened to all the gold bugs on this blog?

#195 Old Man on 04.10.13 at 5:23 pm

#179 skytrain – you must be drinking as this company is not based in Texas, so get a babe and take her out for a dinner of Texas ribs which is the best in the world, and so are the women down in those parts, as have had both in my time. :)

#196 brainsail on 04.10.13 at 5:23 pm

For the Bitcoin believers…

“Bitcoin bubble begins to burst, price plunges 60%”

http://buzz.money.cnn.com/2013/04/10/bitcoin-bubble-burst/

#197 brainsail on 04.10.13 at 5:34 pm

“Canada’s housing bubble is now nearly 40% larger than America’s bubble at its 2005 peak.”

http://www.stock-market-crash.net/housing-bubble/

#198 Dr. Hoof - Hearted on 04.10.13 at 5:37 pm

#178 Ralph Cramdown Ⓤ on 04.10.13 at 3:01 pm

#171 Old Man

I don’t know how long you’ve been in ZENN, but their current business model is waiting for an old man in Texas who claims to have the next big thing in batteries (he’d have written down the proof, but there wasn’t enough space in the margin). That stock is either going to the moon or zero, and my suspicion is zero.

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

Just checked on ex star company “Ballard Power Systems”….it’s at 96 cents.

These type of ventures pop up all the time…usually when people are in a GREEN MOOD.

Not saying it may not have merit,but also seen many die off after pump and dump.

#199 good times on 04.10.13 at 5:41 pm

When you do a drive by of high end homes, you see home after home being built… and numerous homes for sale. How many of these homes are owned by “custom home builders”. All power of sales are being scooped up by investors. This can’t possibly continue for very long. The TO solds google document was very telling. The majority is in the red. The only area with any real sales over asking are in Vaughn.. of course. This area is the same area that people were lining up to buy homes. 1 million for a lot in the middle of no where in nobelton. It’s outrageous. The TO solds list is interesting, because it only lists the most current list prices… but the potential drops of listed versus sales are much higher since many homes were listed higher in price. For the most part homes that I have been watching have sold for $100K under asking. Realtors were confident that they would not sell for less then 50K under asking. I like to think this is a new upper limit for prices, which is substantially lower then homes sold last year. On average in the Million + market homes have dropped 100K and relatively speaking homes have dropped 50K in the markets below this. Homes still have a long way to go. It’s time to be patient. First sales drop and then prices. Whats interesting is that with 1500 less sales last month there are a lot of real estate agents that had a lot less commission. Desperate agents will not try to prop prices so highly when they need the sales. It’s a potential downward spiral. Agents heading to the USA to figure out how to do more sales. What does it tell you when Canadian agents are getting all expense paid trips to Florida to try to make sales there. The Canadian market is on it’s way down and Florida needs canadian sales. Interesting times!

#200 Mike on 04.10.13 at 5:42 pm

Extensive hair-cut for a Vancouver “Investor”:
http://metronews.ca/news/vancouver/627328/man-loses-745000-deposit-after-3-million-vancouver-condo-deal-fails-court/

#201 good times on 04.10.13 at 5:44 pm

Question for you all… does a home really need granite countertops in order to sell.? Noticed houses currently on the market are getting last minute make overs.

#202 Old Man on 04.10.13 at 5:48 pm

Now for you that are holding gold stocks in Canada it is time to blow them off, as know all about mining. I see that spot has hit $1,559.30 a troy ounce, and there is a problem with the big 5, as the core value per ton is not there anymore. They will disclose a cash in value for a production which is an illusion, as the total cost is about $1,700 a ton for an ounce of gold. Need I say more?

#203 Shane on 04.10.13 at 6:02 pm

Vancouver is a city where you have people that really think they can get a million dollars on complete tear down gut jobs. Who in their right mind would spend $1 million dollars to maintain a roof over their head? That city is doomed to fail massively!!

#204 TW112 on 04.10.13 at 6:06 pm

Good thing I bought in Calgary – just raised my rent on the renter by $100 per month and value holding steady! Property almost cash-flows. Thanks for the investment advice Garth!

In other words, you are losing money. So why did you do it? — Garth

#205 jess on 04.10.13 at 6:14 pm

latvia

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

Uploaded on Sep 6, 2011

The investigation of the TVi journalist Natalie Sedletska in Latvia.
The Singaporean factory Keppel manufactured a rig and through its distributor Seadrill sold it to a British firm Highway Investment Processing for $ 248,5 million. The British firm won a tender in Ukraine and resold the rig to Chornomornaftogaz for $ 400 million.
Highway Investment Processing, registered in Cardiff, was founded by two offshore companies – Ireland & Overseas Acquisitions Limited and Milltown Corporate Services Limited. These firms are headed by citizens of Latvia – Stan Gorin and Eric Vanagels. Are these people the final recipients of excess profits from the Ukrainian budget? Shocked by the business mastery of these two citizens, we went to find them in Latvia.

According to Latvian media, overall more than 300 firms were registered in the names of insurance broker Stan Gorin and the homeless Erik Vanagels,. Amazingly, but the Tymoshenko government also purchased overpriced vaccines through an offshore company headed by the two Latvians. British, Romanian, Russian, Moldavian and American money was laundered through offshore companies sold by the IOS bureau. Investigative journalists have actually exposed an international laundry for dirty or simply stolen money. And Ukrainian officials were not the last of its customers. Gradually these facts are becoming the subject of police investigations in the countries affected by the activities of this group with its offices in Riga. Instead, the heads of the Ukrainian fuel and energy sector, with the connivance of the Security Service and Prosecutor General’s Office, are publicly defending the corruption scheme. In Europe it has not recognized as a tremendous washing, not drilling platform for money laundering. Perhaps this is why Ukrainian officials have chosen to behave in such a way? For sooner or later they will have to testify against themselves.

#206 Canadian Watchdog on 04.10.13 at 6:18 pm

#192 Timbo

I remember when Bitcoin fell from $17 to $9, a near 50% drop that had everyone saying it was the biggest ponzi scheme bubble of all time. Ya, those were the good old days, only it was last year. 

#207 Blacksheep on 04.10.13 at 6:55 pm

“Xenophobia is a leading indicator of a failing society. — Garth”
——————————————————-
Agreed. Society is failing. Fear of this gov. sanctioned action, is not is not only healthy, but actually prudent. Corporations are cutting costs anywhere, they legally can. Does this lobbyist coerced loophole not potentially displace Canadian workers?

This has nothing to do with skin color our ethnic backgrounds. Seems your elected officials could really give rip in regards to looking after the welfare of their citizens first. The illusion of patriotism and borders is for the Cattle and the olimpics.

The ‘systemic’ response: That’s why you need to be shareholders.

The working class reality: This is action is unjust to the Canadian worker.

#208 Suede on 04.10.13 at 7:08 pm

#191 Neo

The Dow is in an high uptrend channel that hasn’t been broken yet since late Nov. The more discussion that the DOW will correct and people anticipate events like cypress and such will be the catalysts, the more likely it keeps rising.

#204 Old Man

You’re spot on. Costs are rising dramatically and gold is falling. The majors will have a tough couple of years and the juniors (TSX-V) are on life support waiting for a bullet through the brain. Financings are coming with full 3yr and 5yr warrants to attract capital. In 2010 they wouldn’t attach warrants at all, or you’d be lucky to get a half warrant for 18 months.

…Side Note to you insurance brokers…

What is this concept called Infinite Banking? Sounds like a headachce.

#208 CDN Watchdog

You can’t possibly be sold on bitcoin? What’s the purpose of it? Why not just get real gold coins that the public is aware of?

Privately, people will trade anything for anything. I paid a taxi driver twenty bucks over the weekend to hit a McDonalds drive through late night in the lineup. He probably wouldn’t have taken a bitcoin, even if it’s value was $150

#209 TurnerNation on 04.10.13 at 7:10 pm

ABX.TO down almost 9%! Strong hands?

#210 Humpty Dumpty on 04.10.13 at 7:39 pm

#189 jess on 04.10.13 at 4:06 pm

In Amerika, MSNBC host Melissa Harris-Perry recorded a commercial saying children should belong to their communities, not their families.

http://tv.msnbc.com/2013/04/09/why-caring-for-children-is-not-just-a-parents-job/

#211 Stoopid Idiot on 04.10.13 at 7:40 pm

Stephen Harper’s Cyprus Blueprint For Canada

http://beforeitsnews.com/financial-markets/2013/04/stephen-harpers-cyprus-blueprint-for-canada-2534068.html

#212 TurnerNation on 04.10.13 at 7:41 pm

Smoking man better stock up!!

http://www.theglobeandmail.com/news/national/lcbo-employees-vote-for-strike-if-talks-collapse/article10967166/

Unionized employees of the Liquor Control Board of Ontario have overwhelmingly voted in favour of a strike should contract talks with the retail giant break down.

#213 blok existentialist on 04.10.13 at 7:46 pm

#190 Humpty Dumpty, Another reason to thank the French: I will read this book.
Another reason to thank the French was their moratorium on lawyers. Seriously, lawyers were not allowed to become colonists to French Canada. They wiggled their way in eventually, but France was intent on keeping control in the hands of the colonists.

#214 Old Man on 04.10.13 at 8:06 pm

Bitcoins has just crashed a massive 50%.

#215 jan on 04.10.13 at 8:06 pm

DELETED.

Try again without the language. — Garth

#216 Devore on 04.10.13 at 8:35 pm

#208 Canadian Watchdog

Love the hockey stick graph. What could possibly go wrong?

#217 TurnerNation on 04.10.13 at 8:55 pm

Are Garth and bigarider in rival motorcycle ‘clubs’ or something?

#218 My thoughts on 04.10.13 at 8:58 pm

164 wood haven park drive in oakville listed higher this year then last year. Good luck to Gail selling her own house…. Really amazing even she wants to get out at the top!

#219 Smoking Man on 04.10.13 at 9:03 pm

#214 TurnerNation on 04.10.13 at 7:41 pm

Smoking man better stock up!

Or maybe good time to buy a bike, and lose some bad habits

#220 Sapienti Sat on 04.10.13 at 11:51 pm

Here – all you ever wanted to know about US “recovery” but were too afraid to ask: http://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?pagewanted=all&_r=0

#221 DDCorkum on 04.11.13 at 12:08 am

#98 EIT on 04.10.13 at 5:50 am

“Bitcoin is going absolutely crazy vertical. What was the argument for it being a commodity?”

———–

Aside from the fact bitcoin tends to be volatile just like many commodities are?

In a nutshell: you print money and mine commodities. Bitcoins are created through a process that is designed to resemble mining, so its functionally a commodity.

#222 live within your means on 04.11.13 at 4:38 am

OT –

The Cleaning Poem

I asked the Lord to tell me
Why my house is such a mess.
He asked if I’d been ‘computering’,
And I had to answer ‘yes.’
He told me to get off my fanny,
And tidy up the house.
And so I started cleaning up…
The smudges off my mouse.
I wiped and shined the topside.
That really did the trick…
I was just admiring my good work.
I didn’t mean to ‘click.’
But click, I did, and oops – I found
A real absorbing site
That I got SO way into it…
I was into it all night.

Nothing’s changed except my mouse.
It’s very, very shiny.
I guess my house will stay a mess…
While I sit here on my hiney.
…………….
Just read the above that an old, dear friend sent me. I LOL as I’ve been awake since 12:30 am on my ‘puter reading news & replying to emails.