Yup.

iDIOT

It’s been a year since F & the Peckerettes lowered the boom on real estate. Last July 9th thirty-year amortizations went poof, cash-back mortgages were trounced and CMHC insurance came off all listings worth seven figures. Shortening mortgage repayments alone had the effect of raising interest rates by almost a full percentage point. Topping it off, debt ratios were tightened – another measure aimed squarely at shutting out first-time buyers rich in hormones and skimpy on money.

Since then the real estate industry has done about all it could to thwart the little dipper. Banks dropped mortgage rates – especially those on fixed loans – to levels so low Ottawa protested. Those same bankers have continued to offer cash bribes when new home loans are arranged. Mortgage brokers giving zero-down financing are still epidemic. And real estate boards routinely publish misleading numbers and unsupported claims.

Apparently, it’s worked. So says a new study by Scotiabank.

“Canada’s housing market is proving remarkably resilient notwithstanding the barrage of negative headlines. Based on a review of local real estate boards representing about 50 per cent of national activity, home sales in June were in line with year-ago levels. On a month-to-month seasonally adjusted basis, we estimate national sales rose for a fourth consecutive month. Market conditions remain well balanced: Average prices are up 4 per cent year over year but have levelled out in recent months.”

Does this mean GreaterFool is the abject failure all those house-humpers, rabid realtors and bullion-lickers have been calling out? Has the moment finally arrived for this sad blog to go off the air, dragging its defeated ass onto a throbbing Harley while dozens of crushed fans (all of them pathetic) wave their cell phones in the night as the machine and its crumpled burden scream past, into the abyss?

Nope. Too poetic. Besides, Scotiabank’s full of it.

As I detailed a few days ago (“The Manipulators”) the numbers realtors dish up and economists swallow are dross. And conveniently ignored are facts that completely change the environment. For example, sales of houses in Toronto for $500,000 or less have been in decline now for 14 months. New condo sales have fallen 54%. In Vancouver, a sales ‘increase’ of 11% this June was measured against last June when they crashed 17%. That’s good? In Halifax listings have increased 50% and sales dropped 28%. And every month Toronto realtors quietly and secretly revise year-ago numbers to make them more robust.

Meanwhile let’s not forget what mortgage brokers have to say – the front-line warriors who aren’t shy about claiming the feds have stolen their lunch. The Canadian Association of Accredited Mortgage Professionals estimates 150,000 jobs will be lost by 2015 as housing wilts, and that prices could fall 25%. Now, how does that square with the banks telling us to expect a ‘soft landing’ or that only 10% of potential buyers were excluded by Ottawa’s actions?

Obviously, it doesn’t. Somebody’s zooming the public. And now with mortgage rates higher, what are we to make of it all?

Well, I’ll give the critics this: in the past year asking prices have stayed insanely high, household debt has increased, house horniness was sustained and there are bidding wars in Toronto for any bug-challenged, moist half-duplex listed for south of $999,900. The meme that houses were a risky deal lasted a few months, and was then defeated by the man.

This is not a return to normalcy. In most cities average families can’t afford average houses. Real estate costs double here what American pay. It’s an unwise place to put most of your net worth. The fact fools exist to outbid each other for properties that cost half as much ten years ago means only that they’re fools. And the more of them there are, the more you should take care.

Common sense is in short supply lately. Wise people would be sellers, not buyers. They’d be paying down debt, not taking it. Selling the highs and buying the lows.

When everyone believes the same thing, best to exit.

139 comments ↓

#1 TurnerNation on 07.08.13 at 8:56 pm

First dry post from Toronto.

#2 first comment from Cavendish PEI! on 07.08.13 at 8:59 pm

good post tonight Garth. Please keep up the good work!

#3 Phat Duffy Slim on 07.08.13 at 9:02 pm

Who weighs more: Pamela Or Mike ?

#4 Donald Trump on 07.08.13 at 9:06 pm

#152 Old Man on 07.08.13 at 6:49 pm

#145 Bargains everywhere – in my walk in life have the upmost respect for the women, as most of the money that I ever made in life was with them.

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

Yeah yeah…you put them on a pedestal and then shine your shoes.

#5 Garth Follower on 07.08.13 at 9:08 pm

Garth I thought of you today when I got an email from a Realtor flogging condo hotel units at Muskoka Wharf. Wasn’t that the place that was trying to auction off units a year or two ago? Well now they’re advertising 40% off and mortgage fees of starting from “only” 509.00 per month with 35% down. Using Brad Lamb math by the looks of it. Of course, no mention of how much the hotel takes of your monthly revenue for renting out “your” unit.

Might as well hang a red flag out front.

#6 Dean Mason on 07.08.13 at 9:09 pm

Bonds got T-nationed today.

#7 TurnerNation on 07.08.13 at 9:10 pm

Scroll to bottom for some unfathomable flood pictures.
Track 5ers, 6ers stranded.

http://www.blogto.com/city/2013/07/massive_rain_storm_hits_toronto_causing_flooding_and_power_outages/

#8 takla on 07.08.13 at 9:11 pm

Garth,”selling the high’s buying the lows”i luv it,just back from a road trip on my harley,picked up some shiney .999maples{canadian eh}the lows in on the precious….get some while its cheap!!

#9 frank le skank on 07.08.13 at 9:14 pm

It would be hard to find a house worth less than $500,000 in Toronto.

To 28-year-olds, condos are ‘houses.’ — Garth

#10 Mr Reality on 07.08.13 at 9:16 pm

Back to writing about real estate, thanks G

#11 frank le skank on 07.08.13 at 9:18 pm

oops my bad

http://www.realtor.ca/propertyDetails.aspx?propertyId=13390842&PidKey=-760004475

http://www.realtor.ca/propertyDetails.aspx?propertyId=13264059&PidKey=-935539467

#12 Calgary Dave on 07.08.13 at 9:18 pm

Would you rather buy a house for $600k at 3% for ten years, or a house for $300k at 8% for ten years?

At least with the cheaper house and higher interest rate I would have the possibility of being able to pay it off faster as I start making more money. With the more expensive house…

#13 ballsofsteel on 07.08.13 at 9:19 pm

I am a big admirer of GT for from where I sit afar, he talks a huge mount of common sense.
I don’t think everything he says is spot on but he is near enough and should be known to his fellow Canucks as the Sage of Halifax.
Remember, “A Prophet Hath No Honour in His Own Country”.
Whilst I’m at it, condolences to all the innocents affected by that tragic train mishap in Montreal.

#14 Randy on 07.08.13 at 9:22 pm

Glub……glub……glub……Keep you head and mouth above the water….haha

#15 Fisc on 07.08.13 at 9:23 pm

Another bad month for Montréal:

http://communications.centris.ca/Tableaux/2013/Tableaux_Communiques_CIGM_2013M06_ENG.pdf

The worst June sales level since several years and listings are still very high…

#16 Cow Man on 07.08.13 at 9:27 pm

Questions:
When the realtors and the mortgage brokers have fulfilled their dreams of everyone owning a home, who will be left to buy? Will they then make money having everyone trade up or down to keep the commissions coming? Sort of like, how can we all make a living doing each others laundry?

#17 T.O. Bubble Boy on 07.08.13 at 9:27 pm

No offense to Calgary (who was obviously hit far worse), but Toronto is a mess! I think Rob Ford did some kind of rain dance at his Ford Family BBQ.

#18 Bullion (and stainless steel) licker on 07.08.13 at 9:30 pm

So, oh mighty Oz,

When the Fed stops buying US bonds, will anyone be buying them?

If not, then interest rates go to infinity.

And yes Dorothy, the Treasury does print money (if only as electronic reserves that, up until taper time, get reinvested in bonds which even at 2.6 percent, pay more than cash reserves).

How does it all get reigned in?

#19 Lies in the condo sales reports for Toronto on 07.08.13 at 9:32 pm

http://img37.imageshack.us/img37/1737/nux6.jpg

#20 Bullion (and stainless steel) licker on 07.08.13 at 9:38 pm

Does the Fed eventually have to sell those trillions in bonds it holds?

Does growth need to be greater than 1.8 % for this to happen? Does unemployment need to be lower than 7%?

#21 Yup. — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer on 07.08.13 at 9:40 pm

[…] via Yup. — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#22 The Prophet Elijah on 07.08.13 at 9:41 pm

Garth so far you’ve been more right about gold than your specialty RE. But Adam’s Smith’s invisible hand will be taking over soon. Housing will crater but gold will take off once it bottoms, stagflation here we come!

#23 Big Sexy on 07.08.13 at 9:44 pm

Garth, I did it! I’m moving next month and convinced te better half that we shouldn’t be buying a house! Next stop, convincing her that she should fully fund a TFSA instead of letting the money stay in a bank account…

#24 Spiltbongwater on 07.08.13 at 9:45 pm

Is the flooding in TO climate change related?

#25 Uh Oh Canada on 07.08.13 at 9:46 pm

“Wise people would be sellers, not buyers. They’d be paying down debt, not taking it. Selling the highs and buying the lows.”

Officially debt-free today! Called Scotia Bank to make the final payment. Even though the truck loan was interest-free, it still feels good to not owe anyone.

#26 Lies in the condo sales reports for Toronto on 07.08.13 at 9:47 pm

Garth if you could please please delete the previous post of mine, this is the correct one

http://img199.imageshack.us/img199/5586/vgaq.jpg

#27 chopper on 07.08.13 at 9:49 pm

Great post again Garth and so true. The lust for owning a house is so strong it causes blindness and there will always be greater fools it is human nature.You just have to take advantage of that weakness and profit from it.

#28 Pat on 07.08.13 at 9:49 pm

Trust but Verify

#29 Stupesing in Cabbagetown on 07.08.13 at 9:51 pm

I guess the massive power failure across western GTA and Mississauga has reduced comments to this blog for now. Quite a show on the DVP as tow trucks drag stranded vehicles from the Don River overflow. Even the GO Train tracks are submerged. I think a lot of commuters are going to have trouble getting to their jobs downtown tomorrow.

#30 dosouth on 07.08.13 at 9:52 pm

More of the same depending on who is writing the article….meme

Still waiting…..

#31 Mr. Monday Night on 07.08.13 at 10:00 pm

It is absolutely insane that the banks and CREA can get away with this boldfaced lying and manipulation of numbers in order to deceive potential buyers into thinking that the market is more than it really is.

What’s even more astounding is that people seem to be ok with it. I’ve heard comments like ‘what do you expect, they’re salesmen!’ Last time I checked, CREA had its own code of ethics that realtors had to adhere to or they could lose their license.

Looking to buy must be hell right now because people just don’t know who to trust. Even [email protected] has her marching orders. I’ve seen people invite their realtor to their wedding or baby shower like they’re actually friends.

It is ugly out there right now because everyone with skin in the game is pulling out all the stops, and most have to be taken with a grain of salt.

The one absolute right now is that there has never been a better time to NOT buy than the present.

#32 Wayne Turner on 07.08.13 at 10:08 pm

Bro, dude!

Let the folks off easy. These mortgages are all funny money anyway. I plan to inflate my mortgage away. And if that doesn’t work, my rich brother Garth will bail me out.

Right, bro!

#33 george soros on 07.08.13 at 10:10 pm

WH on Obamacare Mandate: ‘Everyone Has to Follow the Law’ But ‘We’re Flexible’
lolol thats government for you

#34 PermaBear on 07.08.13 at 10:14 pm

Forget it Calgary and Toronto – Vancouver is still the rain capital of Canada.

#35 Linda Evangelista on 07.08.13 at 10:19 pm

You criticize the zero guys. Do you ever read them? Do you read pragmatic? What financial blogs do you think are must and must not reads?

#36 Sebee on 07.08.13 at 10:33 pm

Scotiabank’s full of it.

Looks like someone will have to sit alone at the lunch table tomorrow. Those Scotia boys won’t even hold the elevator.

#37 not 1st on 07.08.13 at 10:35 pm

Like I said before, the RE market will not take a substantial hit until something greater in the economy happens like a nation wide recession. When unemployment goes up and people are losing jobs is when the pain hits, not a minor increase in rates.

The same thing preceded the US crash. Housing just followed. Oil was teetering at $150, and bank shenanigans and corporate fraud were everywhere and bogus asset ratings and Lehmen and F&F and 2 wars and off shoring and closing plants and technology and TARP and TARP II and then recession etc etc. Those were the catalysts in the economy that triggered housing to fall, not the other way around. The housing market is a fraction of the value of all those others.

Since we are better regulated, we have no skeletons like that in our closet, we just have to wait for a natural recession in the business cycle. Who knows when that will be.

#38 Canadian Watchdog on 07.08.13 at 10:45 pm

#37 not 1st

Like I said before, the RE market will not take a substantial hit until something greater in the economy happens like a nation wide recession.

RE and debt is 94% of our economy.

#39 meslippery on 07.08.13 at 10:55 pm

Toronto flood must have reduced housing stock.
Prices are going higher buy quick.

Not intended to solicit property currenly listed.

#40 TurnerNation on 07.08.13 at 10:57 pm

Of interest, strange massive cloud formation in Calgary just before floods.
https://www.youtube.com/watch?v=i1rdWjrYG5I

Of interest, same strange massive cloud formation in GTA just before floods.
http://www.youtube.com/watch?v=cCYdb9cvrTI

I’m not a meteorologist so unable to comment.
But the top story is our gas powered lawnmowers and how we must cut back!

#41 TurnerNation on 07.08.13 at 11:03 pm

Deaner. Outstanding! TLT.US up 1% today. After falling 15% from its May peak.
Chin up son.

#42 Barry Lainof on 07.08.13 at 11:04 pm

You are tenacious Mr. Turner, taking on the ScotiaBank boys again.

What’s up with all the manipulation and conspiracies talk, you’re sounding like the gold bugs. LMFAO.

On a serious note, “when everyone believes the same thing, it’s best to exit” – truer words never written by you. That goes for the real estate market, bond market and stock market. BUYERS BEWARE.

#43 45north on 07.08.13 at 11:10 pm

The Canadian Association of Accredited Mortgage Professionals estimates 150,000 jobs will be lost by 2015 as housing wilts, and that prices could fall 25%. Now, how does that square with the banks telling us to expect a ‘soft landing’ or that only 10% of potential buyers were excluded by Ottawa’s actions?

The question highlights my contention that the housing market is binary – on or off. The “soft landing” is essential for continued income so that’s what the industry is going to say.

TurnerNation: great pictures of the flood in Toronto, I grew up on the banks of the Humber. My Dad took me for a drive to look at the bridges after Hurricane Hazel.

#44 Piccaso on 07.08.13 at 11:14 pm

Just as America’s homeowners were finally coming up for air, they are suddenly turning more negative on the housing market. Fewer people think now is a good time to buy or to sell a house, according to a monthly survey in June from Fannie Mae.

Those numbers had just hit a survey high in May, thanks to rising home prices and record low mortgage rates. Now mortgage rates have soared well over a full percentage point in the past two months, and 57 percent of respondents to the survey expect them to go even higher. That’s the highest level in the survey’s three-year history.

http://finance.yahoo.com/news/housing-sentiment-sours-mortgage-rates-164209170.html

#45 Jake on 07.08.13 at 11:19 pm

How many of you garth followers OWN a property? How many of you have missed out on the past decade worth of growth and still live in your rented basements? I’m curious. Put up your hands if you OWN and/or if you RENT.

#46 TheCatFoodLady on 07.08.13 at 11:25 pm

They’re called arcus clouds & have 2 common forms – one that looks like a shelf & the rolls as seen in the tubes. The roll clouds especially, often presage big thunderstorms. They’re not common here but are elsewhere.

#47 NewWorldPartyDotOrg on 07.08.13 at 11:34 pm

Your “The Manipulators” article neglected the biggest manipulator: The government.

The government created this Housing Bubble. See:
http://www.newworldparty.org/2011/04/housing-most-manipulated-market-in.html
(Canada’s manipulation is explained in bottom half)

The Atlantic now calls this the biggest bubble in the world.

#48 Kurt on 07.08.13 at 11:42 pm

#40 Turner Nation
Beautiful roll cloud over Calgary. That one would have been associated with a cold front. The one over Toronto would have been associated with the outflow of the thunderstorm. Neither of them necessarily has anything to do with lawn mowers, push, electric or otherwise. Very pretty, thanks!

#49 Carpe Diem on 07.08.13 at 11:43 pm

Some neighbors of mine think it is time to sell their place since it increased in value by 250K in the last 10 years. Their original 250K mortgage never went down.

So they want to sell their 500K place which they never repaid their initial 250K mortgage and buy a 750K home and 500K mortgage.

He’s some sort of independent consultant that doesn’t make much and she’s a government worker making 70K at most. Last year they wanted to sell because she feared losing her job and couldn’t sell the place.

I wish them luck but I also spell STUPID !

#50 Donald Trump on 07.08.13 at 11:47 pm

#24 Spiltbongwater on 07.08.13 at 9:45 pm

Is the flooding in TO climate change related?

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

Yes it is….Santa, the Easter Bunny and Lucky Charms Leprechaun said so.

#51 OwlEyes on 07.08.13 at 11:56 pm

Dead cat bounce.

#52 Wally on 07.09.13 at 12:00 am

Eventually house prices will fall. But as you know, with investing timing is important. So you blew the timing part of the call. But eventually the direction call will happen. Hang in there.

#53 souvereigninternational on 07.09.13 at 12:12 am

back to what you do best. Great post. You may like the doomer Martin Armstrong’s Goldbug criticism below

http://armstrongeconomics.com/2013/07/08/13029/

#54 Average Family on 07.09.13 at 12:22 am

“In most cities average families can’t afford average houses. Real estate costs double here what American pay.”

Then who is buying these “average houses” if it is not “average families”? Average aliens?

I guess whom ever is buying these average houses are much wealthier than our southern neighbours if they can afford double what the Americans can!!

#55 Devore on 07.09.13 at 12:22 am

#20 Bullion (and stainless steel) licker

Does the Fed eventually have to sell those trillions in bonds it holds?

Why do they have to? They may WANT to, at some point, bu there is no need to.

#56 Devore on 07.09.13 at 12:24 am

#24 Spiltbongwater

Is the flooding in TO climate change related?

The weather changed, so I am going to go with the latest definitions of “climate change” and say yes, it is.

#57 Calgary Ontarian on 07.09.13 at 12:30 am

@ #24 Spiltbongwater

Yes, 100% TO rain is related to climate change. This rainfall event took place in a climate that was warmer than before humans started turning up Earth’s thermostat. A 2 degree warming in Earth’s temperature = about a 10% increase in the amount of water that can be held in the atmosphere, resulting in greater intensity of rainfall. Calgary and Toronto flooding will become more common (but not “common” as in every week) over the next century. This relates to real estate because it creates uncertain risk to houses that may not have previously been influenced by flooding will now be subject to swamped basements, and insurance companies that won’t pick up your tab for cleanup. Just another reason to rent in the 21st century.

#58 Beck on 07.09.13 at 12:40 am

In the globe and mail today it’s reported millennium condos in vancouver are giving away fiat 500’s with the purchase of a condo.
That’s a good deal right?

#59 Benchwarmers on 07.09.13 at 12:50 am

Realtor friend of mine, told me on the weekend that some realtors in the Calgary area are asking for $5000 upfront for advertising fees. The money upfront will be taken off of the commission once the property has been sold.
I was surprised and had never heard of this before.
Things can’t be going that well in the industry.

#60 Nodebt on 07.09.13 at 1:21 am

Hey Garth how you doing? I need you to say a little prayer for me! The wife has finally agreed with me that it’s time to sell the McMansion ! Got a realtor coming over Thursday to list! Hopefully it sells! Fingers crossed! The wife starts telling me the other day that our portfolio has to much real estate in it, I nearly shit my pants laughing when I heard that! I got a great wife!!!!

#61 Dean Mason on 07.09.13 at 2:10 am

#12 Calgary Dave

You are thinking as a rational person.If your house is $300,000 instead of $600,000 the province and in Toronto hear would get much less land transfer taxes,the government would get much less H.S.T.,real estate agents would get much less commission, real estate lawyers would get less as well.

Development fees would be less as well because they could more easily convince idiots a $20,000 fee on $600,000 is 3.33% while $20,000 on $300,000 is 6.67%. It is more fair and reasonable and in line with other regions.Another point is CMHC would get more mortgage insurance premiums as well 2.75% on $285,000 versus 2.75% on $570,000.

More people could afford 20% or more down at $60,000 versus $120,000 and not pay CMHC premiums at all.Banks,lenders would be lending out much less money which it looks like they would be worse off because of less fees,interest earned by doing less business even if at higher mortgage rates.

I think at lower mortgage rates they make much more money on volume and the spread between deposits and the cost from the bond market.

#62 Bubu on 07.09.13 at 2:19 am

#9 frank le skank on 07.08.13 at 9:14 pm
It would be hard to find a house worth less than $500,000 in Toronto.

To 28-year-olds, condos are ‘houses.’ — Garth
———————————————————–

And what doe’s this tell you about the state that this country is in?

#63 Bubu on 07.09.13 at 2:24 am

We are getting flooded out, burnt out, blown out …
I am starting to think that someone UP there is seriously getting pi$$.d at us. ;)

#64 David McDonald on 07.09.13 at 3:19 am

Dear Garth,

You have been so right about the taper of QE. I am very surprised the markets took this in stride just as you predicted. Your credibility went up another notch.

Being on the sidelines for real estate is one long agony especially with the wife and grown children pushing to buy. I am convinced you are right but it is very hard to make a solid case to rent and delay buying.

#65 Tony on 07.09.13 at 3:59 am

Re: #8 takla on 07.08.13 at 9:11 pm

I don’t know the manipulators pushed natural gas as low as $1.70 and stocks higher than DOW 15,000. Talk about extremes. Naturals gas did correct and rise above $4.00 and the DOW will correct and fall to 5,000 or lower. Gold is still in the midst of a big sell-off and the manipulators could push it down to $800 or lower while at the same time carrying on this through the looking-glass charade with stocks.

#66 Devore on 07.09.13 at 4:16 am

#40 TurnerNation

I’m not a meteorologist so unable to comment.

No you are not.

It’s a roll cloud. They happen. In some places more often than others.

#67 a prairie dawg on 07.09.13 at 4:25 am

“Common sense is in short supply lately.”

– – –

For years I’ve been saying that the ironic thing about common sense, is that it’s not very common anymore.

Many acquaintances, friends, and co-workers thought I was just joking. Sadly, I wasn’t…

#68 Buy? Curious? on 07.09.13 at 4:28 am

Holy Cow! (no disrespect those whom hold cows sacred, I’m looking at you Alberta.) Garth, floods in Toronto? I’m sure if we had a person that holds a leadership responsibility that may or may not be hungover from a BBQ, that the army would have been called in already!

Though, I have a question. Will this flood create a sense of urgency to buy a house because they’re frightened and need that feeling of security therefore rising the price of houses because lack of supply OOORRRRR, will a sense of brooding pessimism wash away the need people would have had to buy a house therefore reducing demand and prices?

http://www.youtube.com/watch?v=g8oVJCvr-w4

Canada has no heros.

http://www.youtube.com/watch?v=g8oVJCvr-w4

#69 Buy? Curious? on 07.09.13 at 4:34 am

Whoops. Double posted my link. Me so siri.

http://www.youtube.com/watch?v=rNMmVxhZP98

#70 Goldy Goldbug on 07.09.13 at 6:14 am

It seems like you have an issue with the way the numbers are manipulated in the real estate market but you don’t ever have anything to say about how the U. S. stock companies and analysts report. Alcoa posts a huge loss, the street lowered their expectations at least 3 times since January(including twice in the last 30 days) and they end up “better than expected”. Good luck with your always truthful and accurate U. S. recovery.

#71 Raven on 07.09.13 at 6:15 am

Lighten Up

Condo property owners, talk about an oxymoron, are what is skewing this market upwards with their lagging three to four year starts. Across Canada most major cities have ballooning R.E because of Condo prices, and their downtown core proximities. Relatively inexpensive, for what you can live in downtown, compared to SFD.
These behemoths dump, in an upwards fashion, thousands of units that 70 years ago were unheard of.
This low end entry point allows first time buyers access to the herd. This will make all those with vested interests in R.E heed the warnings of our host or wish they had.

Your calls have been prescient, straight forward and free to anyone who wishes to listen. All of your suggestions have panned out with the biggest, real estate, in the long play mode, slowly but surely crashing before our eyes.
You have pulled back the curtain of Mr Market and given glimpses of what lies ahead. The rumors must be true Garth, you have crystal balls…….

#72 Dean Mason on 07.09.13 at 6:25 am

Correction it is here not hear in my post to Calgary Dave #12.

#73 pbrasseur on 07.09.13 at 7:54 am

I think the apparent resilience of the Canadian RE market may be puzzling to some.

Sure the industry is good at presenting numbers in a favorable light. But fact remains that many houses are selling and prices are still very high. And that seems to defy logic.

I believe if you could sum up the reasons behind this in one word it would be this one: inertia!

BTW something similar happened in the US before the crash, despite crazy numbers the American Consumer was still at it, getting deeper into debt, making the crisis to come even worse…

So don’t let the numbers fool you, the tide is moving but it’s a huge boat to turn around. You don’t change overnight an emotional behavior that’s been going on for more than a decade, involving massive amounts of capital and an industry that now represents a disproportionate portion of the Canadian economy.

But this boat will turn (and sink) it’s only a matter of time.

Meanwhile use that time wisely, get the hell out if you’re in too deep, save and invest (use the strength of the $CAN to do it while you still can…), use the still low rates to consolidate your debts and prepare for coming hikes.

#74 2CentsCdn on 07.09.13 at 7:58 am

#61 Dean Mason
I 100% agree …. the same gov’t that’s trying to calm this all down really doesn’t want it to stop (too much ; ). The amount of money the financially strapped gov’t offices (and economy as a whole) raises from all the examples you have shown has become irreplaceable. They have truly painted themselves into a corner.

The same as asking a realtor to fight for a better price for you when buying a house. Why would they? Work harder and longer (and make waves in “the club”) to make less commission? As if! What I have done is once you like a property and through YOUR OWN research have determined what a fair price might be) ….. is offer the realtor $250 (cash in an envelope after closing) … for every $1,000 they can get off of that price). Boy watch them go. In one situation … they got the place for $12,000 below what I was embarrassed to offer ($3,000 for them … $9,000 saved for me) Now people say “you shouldn’t have to do that if your realtor is a good one” …. to which I shoot milk out my nose laughing. I agree … but there’s the way the world SHOULD work and then there’s the way the world DOES work. Be aware of both … but base your decisions of of the latter.

#75 Ray Skunk on 07.09.13 at 8:19 am

Susan Pigg doing her weekly bit for her RE masters:

http://www.thestar.com/business/2013/07/09/toronto_house_prices_keep_climbing_royal_lepage.html

#76 Johnny D on 07.09.13 at 8:28 am

The royal lepage b.s. story is everywhere. Every media outlet is gonna showcase their crap for days now.

#77 Smoking Man on 07.09.13 at 8:35 am

When everyone believes the same thing, best to exit.-garth

Almost there one more year…. A nice little green shoot then exit if you must, I’m staying put..

#78 D.D. Corkum on 07.09.13 at 8:50 am

#18 Bullion (…) on 07.08.13 at 9:30 pm

“When the Fed stops buying US bonds, will anyone be buying them? If not, then interest rates go to infinity.”

—-

Investors are still buying them today, even though QE makes them less attractive. Why would anyone stop buying them once yields get more attractive?

The size of the US bond market is an order of magnitude greater than the Fed’s balance sheet. If the Fed was the only one interested in owning bonds, wouldn’t they own most of them by now?

#79 gotthardbahn on 07.09.13 at 8:52 am

Hey Garth – Hot off the presses!

Canada Housing Starts June/2013 sa YoY

Consensus 187.0 K
Actual 199.6 K
Previous 204.6 K Revised up from 200.2 K

Builders appear to know something you don’t, probably something to do with demand, I would guess. Last week’s employment numbers certainly don’t hurt either – a net loss of only 400 jobs and, surprisingly, no big revision on the previous month’s +95.0 K increase in jobs, which you have insisted is untrue. Perhaps, although you have provided no evidence for your assertion.

For once I’d like to see a real response to these inconvenient facts, and not one of your typical five-word soundbites.

P.S. I am SO not a ‘bullion bunny’. Epic wrong, sir.

#80 County Living on 07.09.13 at 9:06 am

Our family has been patiently waiting for the ‘right’ house in Kingsville, Ont. Prices remain high, and have not even remotely softened. We looked at a brick 1.5 story wartime yesterday. Decent house, nice finishes, small lot, no garage. They had 4 showings before it hit MLS. (all showings were scheduled at the same time:) It seemed about 20k high to me with the bit of work it needed. One of the parties made an offer within an hour of the showing.

Overall, nice inventory is lacking here. ‘dogs’ might sit on the market, but everything else goes fast. We keep looking, but it’s seems like we have to spend a lot more than we figured to get a decent house.

#81 CrowdedElevatorfartz on 07.09.13 at 9:07 am

@#58 Beck
Hmmmmm, the “Millenium”(is this the former owe-Limp-icks athletes’ village?) “owners” ( the taxpayers of Vancouver) are offering a new Fiat 500 with every purchase…….
And here I thought those slapped together condos were “going fast!”.
P.S. once they are all sold, a little gremlin has told me the city will finally start enforcing the “no parking” rules all around False Creek that they have temporarily ignored whilst the units are “on the block”.
Good luck parking your car.

#82 jerry on 07.09.13 at 9:11 am

I would like a law passed that bans Realtors from using the word “stunning”as an adjective in their descriptions of house listings.

Rather than exemplifying the house features, I believe that the Vendor and Realtor fit better within the context of being “stunning”.

At the Open House, I simply asked the Realtor as to how the Vendor “arrived” at their current asking price. Suddenly the air went out of the room and pupils dilated. “There are many other properties listed in this area in the same range”. Yes I said, we know. Its July now and we couldn’t help but notice the snow in the listing picture.

A stunning moment.

#83 frank le skank on 07.09.13 at 9:38 am

The Canadian Association of Accredited Mortgage Professionals estimates 150,000 jobs will be lost by 2015 as housing wilts, and that prices could fall 25%.
———————————————————
I read CAAMPs spring mortgage report that Will Dunning published in May and there are many contradictions. Its hard to separate the crap from the facts. From a financial perspective he claims that Canadians are in tip top shape and that we can handle a high level of economic shock. In another section he says that further guv intervention in Real Estate will have dramatic consequences on the economy. If Canadians are in great economic shape we should be able to handle a return to normal in RE regulation? Although there are grains of truth, there’s a lot of sell serving crap in there.

#84 frank le skank on 07.09.13 at 9:41 am

#62 Bubu on 07.09.13 at 2:19 am

#9 frank le skank on 07.08.13 at 9:14 pm
It would be hard to find a house worth less than $500,000 in Toronto.

To 28-year-olds, condos are ‘houses.’ — Garth
———————————————————–

And what doe’s this tell you about the state that this country is in?

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

It tells me that its needs a good 30% correction.

#85 The American on 07.09.13 at 9:45 am

At #54: Average Family: You said, “I guess whom ever is buying these average houses are much wealthier than our southern neighbours if they can afford double what the Americans can!!”

Hmmmmm. Well, Canadians can’t afford double what Americans can. Canadians are just paying double for the same product. Americans can afford a similar product in the U.S. using USD, while Canadians buy the same product at double the price in Canada. What does this tell us? It tells us the CAD is grossly overvalued, and it is already correcting even today. It says that the CAD’s *true* buy power isn’t nearly as strong as it appears when compared to stated exchange rates. Expect the CAD to correct a LOT over the next 12 months.

#86 Onthesidelines on 07.09.13 at 10:05 am

#45Jake on 07.08.13 at 11:19 pm
“How many of you garth followers OWN a property? How many of you have missed out on the past decade worth of growth and still live in your rented basements? I’m curious. Put up your hands if you OWN and/or if you RENT.”

Neither, Jake. Non-resident Canadian. Live overseas, in a tax free country and my employer forks out for a 3bed/2 bath 1,500+ sf flat with 15 ft. ceilings.

Did I mention that it includes hydro and satelite tv, a fully equipped gym and a 20 meter indoor pool??

Time to think out of the box buddy, and ask yourself what did you miss out on. I’m guessing winters would not be on that list….LOL

#87 JimH on 07.09.13 at 10:05 am

#20 Bullion (and stainless steel) licker
“Does the Fed eventually have to sell those trillions in bonds it holds?… &etc.”
===================================
There are a few things you don’t understand, sir.

1. The Fed’s monthly purchases have included $40Bn in mortgage backed securities in addition to the $45B in Treasury securities.

2. The Fed reinvests principal payments from its holdings of agency debt and agency mortgage-backed securities.

3. The Fed rolls over maturing Treasury securities at its regularly scheduled auctions.

Hope this helps.

#88 Onthesidelines on 07.09.13 at 10:12 am

#70Goldy Goldbug on 07.09.13 at 6:14 am
“It seems like you have an issue with the way the numbers are manipulated in the real estate market but you don’t ever have anything to say about how the U. S. stock companies and analysts report.”

Not a gold bug, but made more or less the same point a few entires ago. Garth is talking out of both sides of his mouth when he says ” When everyone believes the same thing, best to exit “, but only applies it to the housing market. No manipulating the muppets when it comes to financial markets…right, got it.

Quite so. Major stock and bond markets are too massive for manipulation. Diddling stats at the Toronto Real Estate Board is another matter. — Garth

#89 Tomato Head on 07.09.13 at 10:19 am

Recap – spring 2013 the market is gonna implode on itself, then it was the fall of 2012, summer, spring 2011..2010..2009…..yawnnnnn

Let’s face it people, why did the Canadian Realestate market hang tough while the rest of the world went sour – simple – everyone wants a little piece of the pie – and the first hint of trouble no one bailed on mass. So many in here piss and moan but secretly mad at themselves on missing out on one of Canada’s greatest Real Estate price appreciations ever to happen – the boat is gone – bye bye!!

Of course prices will fall, that’s a mathamatical given – but everything plays out in due course – so all those basement dwellers who have sat quietly in their molded rented apartments and are ready to yell out “I told you so” go out and enjoy life – waiting for a 25% price correction will not happen anytime soon…

I’m Mortgage Free and living the utimate dream – and just recently rented my stale and cold basement apartment for an incredible $1250 per month – thanks for the extra cash flow renters!!! We owners love yah!!

The issue is not whether you own real estate, but rather your exposure to it. Anyone who exceeds the Rule of 90 is a fool. How about you? — Garth

#90 HD on 07.09.13 at 10:19 am

@#74 2CentsCdn on 07.09.13 at 7:58 am

but there’s the way the world SHOULD work and then there’s the way the world DOES work. Be aware of both … but base your decisions of the latter.

Well said.

Unfortunately, a lot of people fail to understand that.

Best,

HD

#91 rosie "moving forward" on 07.09.13 at 10:24 am

Here ya go gold lickers. http://blogs.marketwatch.com/thetell/2013/07/09/john-paulsons-gold-fund-loses-65-so-far-this-year-wow/

#92 Spiltbongwater on 07.09.13 at 10:35 am

Thanks for all the answers re. TO flooding being climate change related. My next question, could/would a carbon tax or carbon trading scheme have minimized the flooding at all? It would be a revenue neutral carbon tax however.

#93 Rational Optimist on 07.09.13 at 10:37 am

84 The American on 07.09.13 at 9:45 am

Spot on.

It will be a long grind down for the loonie.

#94 calgary rip off on 07.09.13 at 10:43 am

#12 Calgary Dave

You are correct about paying for a less expensive house. However taper your thinking with the illogical Calgary housing market. If you are renting you have no rent control protection. If the landlord decides to up your rent, they can. If you are in a position to buy, how long will you be there? Is your job guaranteed, are you in a position to renew if rates go up(can you still qualify)? The Calgary market is a difficult one because the timing is so erratic. Things are dreadfully slow, however if you see a property that is good, be prepared to strike like lightning without hesitation. I gave up for several years watching the market in 2008 and let my wife do all the looking. When a suitable property was located 5 houses down from the rental at the same mortgage as what I was paying for rent and 200 meters from my daughters school, fully developed basement and good after home inspection I pushed both my wife and the realtor hard to commit. I knew instinctively that nothing else fitting all the criteria would come up. Two years later, I was correct. So you must develop severe patience in dealing the crazy rip off market that is Calgary. Unless you will be moving in say 3-5 years, and arent set to retire for another say 20-30 then maybe buying a place should be seriously considered. Most of the comments of the people on this blog are from those that likely will probably be dead in that same amount of time, so really what they say has no relevance to you as their situation is quite different and they are trying to protect their financial backsides as the time available to work is diminishing hopefully by choice not by forced retirement age in some provinces.

#95 Too Stupid and too slow on 07.09.13 at 10:44 am

Man I wish I had read this blog when my co-worker told me about it years ago. I bought a common element condo up in Orillia at a place called Sophie’s Landing in 2008 for $399,000. The wife and kids thing, near the water, cheaper than cottage, blah. I did it cause I thought this is a great way to make some dough. Real estate always goes up right. My mortgage was up this year and everyone kept saying look how low the rates are, don’t sell your place. Well after having it on the market for two years I finally unloaded this sucker at $414,000. I’m the sucker I took a bath with this one after paying out lawyers, fees, real estate fees and taxes it really sucks when you lose money. Did not make any cash on this investment at all, this place sucks. A rental place in Toronto would have made me some dough. I could have invested this cash and taken the wife and kids and hell ever her mother to the Caribbean three times a year and still made a ton of dough. The worst thing is I was a lucky one a lot of our friends are still trying to unload their places up there. Never again will I pour cash into one of these places. Hell I can take my boat and launch it anywhere and all it costs me is a tank of gas. I am a blog reader now dude.

#96 TS on 07.09.13 at 10:49 am

“Does this mean GreaterFool is the abject failure all those house-humpers, rabid realtors and bullion-lickers have been calling out? Has the moment finally arrived for this sad blog to go off the air, dragging its defeated ass onto a throbbing Harley while dozens of crushed fans (all of them pathetic) wave their cell phones in the night as the machine and its crumpled burden scream past, into the abyss?”

Be confident. It is good to have different voice.

#97 Derek R on 07.09.13 at 10:56 am

#24 Spiltbongwater on 07.08.13 at 9:45 pm asked:
Is the flooding in TO climate change related?

Climate is the average of weather. So this flood taken by itself is an example of bad weather. However if Toronto gets one of these floods every ten years instead of every fifty years that would be a change in the climate.

One of the predictions of the climate change people is that weather will become more extreme as the climate heats up. So we will get more floods and more droughts than we have been used to as the world heats up.

#98 Herb on 07.09.13 at 11:21 am

#84 The American,

if we are paying much more than our Yankee cousins (and no argument here from me), is it because our CAD is overvalued, or because every link in our economic food chain extracts as much as it can, absent real competition and alert consumers?

I would dearly love to see pricing studies that segregate and show all input and process costs, in addition to the bogeymen of labour and taxation, to see where the money goes.

#99 The Prophet Elijah on 07.09.13 at 11:24 am

Not a gold bug, but made more or less the same point a few entires ago. Garth is talking out of both sides of his mouth when he says ” When everyone believes the same thing, best to exit “, but only applies it to the housing market. No manipulating the muppets when it comes to financial markets…right, got it.

Quite so. Major stock and bond markets are too massive for manipulation. Diddling stats at the Toronto Real Estate Board is another matter. — Garth
——————————————————–
I think what he is also referring to is the massaged “recovery” numbers coming out of the US to give a positve impression, including inflation.
But unfotuanatley the US is the best looking right now out of the ugly sisters, as Europe is in shambles. However, this will change by 2016 when reality comes to roost in the US too.

#100 Doug in London on 07.09.13 at 11:47 am

@Jake, post #45:
Well, seeing as you asked, I rent also. That’s because I have moved around in the last decade from Timmins, to Ottawa, and now London. When you move around, it’s more of a hassle trying to sell a house each time. Add to that, when you have a house it ties you down. Now, if I want to go away for an extended time I just lock the door behind me and go. Add to that I don’t see prices in London going up any time soon so it’s better to have my money in more liquid assets.

@Derek R, post #96:
You are one person who has it right. One isolated incident isn’t evidence of climate change in itself, but look at what’s happened just this year. In the spring there was record water levels and flooding in Muskoka district, followed by record floods in Germany and Czech Republic, the flooding in Alberta, record extreme heat in the southwest United States, and now the flooding in Toronto. Between that and record melting of sea ice in the Arctic during the summer it’s not hard to connect the dots and see that climate change, however caused, isn’t coming but is already here. What’s happening now is exactly what climatologists predicted would happen.

#101 WiseGuy on 07.09.13 at 11:55 am

I’m looking at all these pictures on facebook of flooded condo basements, townhouse complexes…etc. Think of all the special assessment fees added on to maintenance fees, which will soon be added on in the future!

#102 peter on 07.09.13 at 12:02 pm

What happens to Bank Preferred’s when the housing corrections occurs? What happens to REIT’s & Pref’s when interest rates rise?

(a) Nothing, (b) they may decline in capital value depending on conditions, and demand, but continue to pay. — Garth

#103 bob on 07.09.13 at 12:04 pm

Nice post Garth. Thanks. Once in a while I’ve just got to give my head a shake and ask “what the hell is going on”! Our minds have been completely hijacked. Let’s for a moment imagine if we weren’t focused on money, real estate, stock markets or the price of gold. To contemplate such a thing is crazy, I know but it’s like stepping out of the trees to see the forest, if only for a few moments. In that reality we could reclaim our minds from the machine and join our fellow man to embrace this singular experience that is humanity. There is only one human experience on this planet and we are it!!
…so back to the price of gold……

#104 TorontoBull on 07.09.13 at 12:08 pm

“Quite so. Major stock and bond markets are too massive for manipulation.”
One can argue that buying treasuries for 1 TRILLION annually is pretty massive manipulation. To put it into perspective Canadian economy is 1.3 TRILLION. And this is the Fed only. As you have pointed out, major Central banks are ‘coordinating’ their efforts, so the actual footprint on the market is significanlty larger…

#105 Randis on 07.09.13 at 12:14 pm

Got to wonder how many of the fellow posters here who post some smart arse comments on economics or still singing praise to RE actually knows a thing about economics

#106 gladiator on 07.09.13 at 12:24 pm

So much for the American recovery, Garth…
http://washingtonexaminer.com/recovery-woes-americas-second-largest-employer-is-a-temp-agency/article/2532778

On another note, my 2 buddies from Philly and NYC say that things aren’t getting better or worse – they are just moving along. No new businesses springing up, neither existing ones going under. So I’d say America is flatlining at this time.

The opposite goes for Canada – I see more and more “for lease” signs in areas with commercial RE. Small business is hurting here.

#107 Mike T on 07.09.13 at 12:27 pm

#91 split bong water (that’s gotta smell bad)

don’t let your elected leaders (read: stooges) follow in our footsteps with a carbon tax

http://bc.ctvnews.ca/b-c-s-carbon-tax-plan-a-sham-auditor-s-report-finds-1.1214076

and

http://www.canadianbusiness.com/companies-and-industries/the-black-art-of-emissions-accounting/

it’s not fair to say that the initiative is wrong or mis-guided, but anytime you have a program that takes tax payer money and hands it over to private interests, WITH NO ACCOUNTABILITY, the good initiative is surely going to be corrupted

you can not and will not fix the world’s problems with more taxes – but hey why not keep trying eh?

#108 TnT on 07.09.13 at 12:32 pm

Times have changed for The Beaches in Toronto. There are currently 3 houses under $600 k and 2 houses under $650 k south of Kingston Road. All 5 houses have been “sitting” on the market. This is shocking compared to previous months. There’s more $1 million dollar houses than ever before that get listed, then disappear only to be re-listed under a new MLS #. The days of dilapidated crack shacks that sell with bidding wars when priced below $700 k are gone.

#109 Smoking Man on 07.09.13 at 12:53 pm

Does this mean GreaterFool is the abject failure all those house-humpers, rabid realtors and bullion-lickers have been calling out?
……………..

Absolutely not…. I told you dogs last year msm and the machine would blow sunshine when the time was right, and they did…

Logic, sensibility, honestly have no place in markets.

Ride on the backs of the herd is how I roll…

Was reading a story in ZH The author made a call, he was wrong, blamed it on the BS Job numbers. And they where BS.

But if you want to be a 10 dimensions chess player, the caller of calls, you need to forsee the BS as well and make bets with that variable into the equation.

Expecting honestly from authority is like believing some university school masters don’t endulge in child porn…

He’s was lucky, bad weather yesterday, no one knows…

#110 NorthOf49 on 07.09.13 at 1:03 pm

Another 80 jobs lost in Burlington:

http://www.thespec.com/news-story/3884228-hood-packaging-closing/

Certainly doesn’t jive with the 8.5% June yoy average price increase for Hamilton-Burlington.

http://www.thespec.com/news-story/3883487-june-real-estate-sales-up-over-last-year/

#111 craig on 07.09.13 at 1:16 pm

Realtors are slim balls and I’m not surprised that they lied in their reporting of sales / prices, etc. Not one bit.

Where I take issue is with the BNS supporting this BS and putting their name and reputation behind it.

Who do you trust anymore?

#112 Donald Trump on 07.09.13 at 1:35 pm

#91 Spiltbongwater on 07.09.13 at 10:35 am

Thanks for all the answers re. TO flooding being climate change related. My next question, could/would a carbon tax or carbon trading scheme have minimized the flooding at all? It would be a revenue neutral carbon tax however.

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

Any item acquired by an empowered body ie Gov’t in the form of a “tax” is always used prudently to the betterment of the majority.

aka “best bang for the buck”…no such empowered body would dare think of scamming, ripping off the payers via such tax…”the taxpayers”… and pissing it away.

Hence, the more carbon tax, the quicker the planet is saved.

#113 Iconoclast on 07.09.13 at 1:40 pm

Ah, now we have the perfect excuse for the coming price drops.

“Blame it on the rain.”

#114 cynically on 07.09.13 at 1:47 pm

#98 The Prophet Elijah –
Your usual crack at the US. To your dire prediction of reality coming to roost in the US by 2016 should be added that Canada will then be on “life-support.” Remember the “sneeze-cold” analogy – still true!

#115 Debtfree on 07.09.13 at 2:22 pm

@ jake # 45 . How many of us own real estate ? I would guess most of us . Why would people that have no vested interest in real estate care about a site devoted to it in as much depth as is this site . I don’t think too many sailors do not check the weather info sites before walking out the door . As for hands up . I see you did not get any . We still own four pieces but only due to right place at the right time . But that does not preclude keeping our eyes on the ball . Read Garth’s books . They are the PFDs that keep us afloat in this endless sea of msm bullshit .

#116 Vamanos Pest on 07.09.13 at 3:06 pm

#89 Tomato Head
Your categorization of renters is simply factually incorrect. I’m not a basement dweller, nor do I have a mouldy apartment. I live in a brand new (construction completed 6 months before I moved in and I am first occupant) 4 bedroom 3.5 bath, 2 car heated garage, view, deck, granite and hardwood finishing. My rent vs mortgage payment if bought (this is not vs a comp, this is the same house as it was on market to sell), if you include property taxes and even a small return on the down payment otherwise invested, saves me at least $1000 a month.

So no, it is we renters that love you landlords for subsidizing our lifestyle. Many thanks, awfully generous of you.

#117 Devore on 07.09.13 at 3:08 pm

#58 Beck

it’s reported millennium condos in vancouver are giving away fiat 500′s with the purchase of a condo.
That’s a good deal right?

I don’t always buy a disposable purse car, but when I do, I amortize it over 25 years.

#118 Devore on 07.09.13 at 3:12 pm

#70 Goldy Goldbug

It seems like you have an issue with the way the numbers are manipulated in the real estate market but you don’t ever have anything to say about how the U. S. stock companies and analysts report.

You may not like stock analyst reports, but all the data is there for you to do your own analysis and draw your own conclusions. As you should, if you buy individual equities.

That seems like a pretty major difference to me.

#119 jess on 07.09.13 at 3:18 pm

Under a 1934 law, Congress exempted credit unions from federal income taxes as long as they were nonprofit businesses, organized without capital stock and operated for the benefit of their members.
=======

Banks pushing for repeal of credit unions’ federal tax exemption

http://articles.latimes.com/2013/jul/06/business/la-fi-credit-union-taxes-20130706

#120 smartalox on 07.09.13 at 3:41 pm

Re: the flooding in Toronto

The rain may have been caused by climate change, or what have you, but the FLOODING is the result of increased housing developments and urban sprawl. Green fields absorb rain water, while roofs, sidewalks and streets collect rain water and channel it into sewers.

The sewers channel rainwater into streams, which in turn channel it into rivers. With more development, less rain water in the region is being absorbed by the new houses, roads, sidewalks and parking lots of the outer GTA, and ends up in the Don, Humber, Credit and Rouge watersheds.

The lower Don, cast into a concrete channel years before most of this development was ever planned, had nowhere to flow but up, over its banks and onto the highway and the rail lines.

The flooding in Toronto was the result of poor planning and shoddy real estate development two jurisdictions away. The region needs to make significant improvements in flood control, but lack the will or the clout to do so.

#121 Donald Trump on 07.09.13 at 4:19 pm

#120 smartalox on 07.09.13 at 3:41 pm

Good points…you are probably right.

Another blog stated a similar case for Calgary

QUOTE:

Based on data going back a very short time in geologic terms, the city allowed building in the now flooded areas while specifying certain standards to deal with a level of flooding they knew would occur.

The high water mark was taken to be the 1932 flood which saw flow in the Bow River increase 5 times its normal June level to 1500 cu metres per second. That flood happened a mere 50 years before new building regulations were put in place.

However, it is now obvious that the maximum figure should have been much higher. A government website ( http://www.environment.alberta.ca/apps/basins/DisplayData.aspx?Type=Figure&BasinID=8&DataType=1&StationID=RBOWCALG ) says the current flood is running at 1800 cubic meters per second, but media reports are consistently saying 6000 cu m/s. This is twice the flow over Niagara Falls during the daytime.

Whatever the correct figures are, there might have been worse floods, less well documented, in the late 1800s. Ironically, in 1973, the Montreal Engineering Group study specified 2850 cu m/sec as a 150 year event. If the 6000 cu m/s now being reported is correct, this 2013 flood is well off the charts and into a multi-millenial event.
Metro Calgary’s population stands now at around 1.2 million. However, in 1990, at the beginning of Canada’s mass immigration policy, its population stood at around 700,000—­ according to University of Calgary figures. That means its population has increased by about 500,000 since Canada’s mass immigration policy was introduced.

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

Thus, if the ground cannot absorb the water and is instead redirected to paths of least resistance, and the water volume exceeds the aforementioned drainage capacity= FLOOD….which of course is compounded by areas that never should have been built on, let alone built period.

#122 jan on 07.09.13 at 4:19 pm

Just wait until that 126mm of rain in Toronto start making its way to those shabby condos that will leak for years to come.
I am sure though the re gangsters will probably turn this into a bull market.
God help this hopeless country!

#123 craig on 07.09.13 at 4:25 pm

#120 smartalox on 07.09.13 at 3:41 pm

Ahhhh it’s real estates fault now for the flooding……ok.

I’m sure it had nothing to do with this;

The 126 millimetres of rain recorded at Pearson Airport yesterday beat the previous record set by 1954’s Hurricane Hazel, according to Environment Canada.

#124 Bill Gable on 07.09.13 at 4:38 pm

This CNN/Money report details how buyers from China are increasingly opting for U.S. real estate, often paying in cash and preferring California to most other states.

At a median price of $425,000, the Chinese are also buying more expensive homes than other foreign buyers, who spent a median of nearly $276,000 on U.S. homes. And nearly 70% of those pricey Chinese deals were made in all cash.

Nowhere is the influx of Chinese homebuyers felt more strongly than in California, where more than half of the homes sold to foreign buyers went to Chinese nationals.

It would have been nice to put the $68 billion total into historical context along with the disproportionate share of homes in California sold to foreigners going to the Chinese.

It sounds like a lot, but how much higher is it from years past?

My guess is that, since more than half the properties in Vancouver now cost more than a million dollars, the Chinese have tired of this area and have headed south.

Link: ttp://tinyurl.com/mg77ezs

#125 Bill Gable on 07.09.13 at 4:39 pm

Sorry this is the link: for the HAM story – Fat fingers, sorry

http://tinyurl.com/mg77ezs

#126 Victoria - the Original on 07.09.13 at 4:44 pm

Royal LePage says house prices are continuing to grow.

http://www.huffingtonpost.ca/2013/07/09/house-prices-canada-2013_n_3565556.html

Then it must be true. — Garth

#127 craig on 07.09.13 at 4:56 pm

Hurricane Hazel shut the entire city down for weeks, everything was flooded out and they had LESS rain then we had yesterday. Today the city is back at 90% capacity and will be at 100% tonight.

30 hours later it’s back to normal.

Back in 1954 no one lived North of Steele’s, it was all farmland so how does that support your – it’s the outer GTA real estates fault – theory?

Real estate also takes up farmland so I’m sure you’ll conclude that RE is responsible for world hunger….serial killers….bad breath……street people…..

#128 jess on 07.09.13 at 4:58 pm

Sean FitzPatrick, the former Anglo Irish Bank chairman, will stand trial in October of next year.

He faces 12 charges of failing to tell the bank’s auditors the true value loans worth €139m given to him, or people connected to him, by Irish Nationwide between 2002 and 2007.

At Dublin Circuit Criminal Court today, Judge Martin Nolan fixed October 7, 2014 as the trial date – and was told the trial will take about two months.

http://www.irishexaminer.com/breakingnews/ireland/former-anglo-irish-bank-boss-to-stand-trial-in-october-2014-599825.html

#129 craig on 07.09.13 at 5:05 pm

Royal LePage says house prices are continuing to grow.

http://www.huffingtonpost.ca/2013/07/09/house-prices-canada-2013_n_3565556.html

Then it must be true. — Garth

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

Garth, if you notice they say – ” a survey by Royal LePage suggests.”

I think that’s their out versus stating that they’re using statistical data supporting their report.

This way if it’s not true or if they’re challenged, they just say “it was just a small survey which we had no control over”

The ‘survey’ is of Royal LePage offices. Enough said. — Garth

#130 jess on 07.09.13 at 5:20 pm

Laura Flanders: I just posted a story at GRITtv.org about the brewing fight in the coalfields, which isn’t actually taking place in the coalfields. It’s taking place in a federal courthouse in St. Louis. That itself speaks volumes about everything you talk about [on this program], about how our world has changed for labor.

Twenty-four years ago there was a struggle in the coalfields that really was at the pit headgates of the Pittston Coal Company in Virginia, West Virginia and Kentucky. Miners were being threatened with losing their retirement benefits – the guaranteed, quality health care that the United Mine Workers of America had won for the guys who worked underground and a few women, over the many, many years of struggle of the last century. Pittston, the coal company, was trying to offload those retiree benefits. [The union went on strike and] people – miners, families, church leaders and communities – showed up in the thousands, as did the press, to fight back that attack.

They won more or less. It’s a complicated story, but they won, in essence. All these years later, that very same attack is happening again and this time it’s happening courtesy of a company that didn’t even exist back then, called the Patriot Coal Corporation. The union says [that Patriot] was intentionally created by a couple of big coal companies [Peabody and Arch] to dump that pension liability and offload it by declaring bankruptcy. [Sure enough] Patriot declared bankruptcy last July. And a federal judge now has to decide whether the claim is legitimate.

If they got the bankruptcy they will effectively escape on making good on all those years of donations of the workers’ money into that pension fund.

Twenty-three thousand miners and their families stand to lose their retirement benefits. And some other seventeen hundred active miners stand to lose on-the-job benefits and [existing agreements on working] conditions. It’s a huge struggle – where is the media?
http://truth-out.org/news/item/17456-the-choices-are-stark-richard-wolff-interviews-laura-flanders

#131 Calgary Renter on 07.09.13 at 5:45 pm

In Calgary, there are hundereds of these attached duplexes inner city for sale between 600 and 800 and they definitely sit longer than the detached SFHs. This listing tries to set itself apart :

Seller is offering the buyer a $500 gift certificate to Chinook Center as a house warming gift. Seller is offering IMMEDIATE POSSESSION!

http://www.realtor.ca/propertyDetails.aspx?propertyId=13197181&PidKey=-2102210656

#132 brainsail on 07.09.13 at 5:48 pm

Three days later and the Quebec train wreck stories are getting more bizarre.

http://www.cnn.com/2013/07/09/world/americas/canada-runaway-train/index.html

#133 Ralph Cramdown on 07.09.13 at 6:01 pm

#45 Jake

Yep, I ‘missed out’ on the last decade of real estate price growth. But that’s in the past. Do you think that residential real estate, in your location and at your level of leverage represents the best use of your capital going forward? I don’t, so my capital is invested elsewhere and I rent.

#134 frank le skank on 07.09.13 at 6:15 pm

#126 Victoria – the Original on 07.09.13 at 4:44 pm Royal LePage says house prices are continuing to grow.

——————————————————–

Ford says car sales will remain buoyant.

Peter Shift says gold will rise.

See a pattern?

#135 Godth on 07.09.13 at 6:55 pm

103 bob

hold on bob…are you saying there’s more to life than greed and fear?

#136 JUNO on 07.09.13 at 7:04 pm

What I don’t understand is most gen “ME” believe in climate changes. Yet they want to tied themselves down with real estate and hope that climate change doesn’t affect them.

Well “HELLO”, first Alberta, now TO. Winnipeg is a accident waiting for a happening.

I can still hear the bozo Real estate Pusher claim We’ll they don’t make more land. Which is totally untrue. The earth changes, Land gets created land gets destroy. Due to shifting plates and other enviromental factor. The truth is climates always changes with the melting caps, any dummy can tell you were going to get more rain, and its exponential a 1 inch rise in water levels can equate at 10 to 20 feet increase in waves.

#137 trevor jerrald on 07.09.13 at 7:05 pm

every single year since 2009 people have been talking about a down turn in real-estate. I live in Calgary and this is did not happen, is not happening and never will happen. It seems that all the talk is about Toronto and Vancouver. Calgary has one of the best economies in the world, has one of the most affordable income to house prices in the world. Canada’s lowest unemployment rate. Plus 100,000 people move to Calgary every year. How is this not going to keep Calgary’s housing market sky rocketing for some time. Lets not forget the Chinese investors that are getting sick of Vancouver and Toronto and are moving their cash to Calgary. All these factors is driving this city’s real-estate to the moon. Please write something up about Calgary, i’m curious about your opinion on this city’s housing market. All the talk about housing in Vancouver and Toronto just seem to have zero relevance to what’s going on in Calgary now. Thanks

#138 Kingarthur on 07.09.13 at 10:53 pm

Meanwhile, in Sunny East Van, the craziness continues:

http://www.theprovince.com/business/mortgages/index.html

#139 Playing with the numbers on 07.12.13 at 3:24 pm

Re: “And every month Toronto realtors quietly and secretly revise year-ago numbers to make them more robust.”

If realtors wanted to make current-year stats look good (when they aren’t), wouldn’t they want to make last year’s results look less robust, not more robust to concoct a year-over-year improvement?