The F-house

x-husband

“That’s it. I’ve given up. I can’t hold out any longer, or she’ll simply castrate me in my sleep. I’m putting in an offer this week, a low ball. But I figure it’ll work out even if we pay too much. It’s going to be our house for at least the next 30 years.” – Alvin (East Vancouver)

Poor Alvin. No, not because he’s buying a house close to the top of the market (even junk in that part of town now costs a million). Not because his manhood could be scissored off overnight with pinking shears. Not because he’s buying out of frustration and commitment. Or even that he’s taking on lifetime debt. After all, ya gotta live someplace and there’s nothing wrong with real estate – if it’s affordable.

But loser Alvin believes this is their Forever house. Delusional.  Even if it exists anymore, it shouldn’t.

While it may be a romantic notion – one, stable homestead where you get old watching the oaks grow and your kids becoming adults before moving into the basement – the F-house is a myth. Trying to justify paying too much because decades will wipe away your financial mistake is so 1972. Face it. This isn’t going to happen to you. It (almost) happens to nobody.

Let’s set aside for a moment the compelling arguments this pathetic blog makes for waiting to buy, or actually staying a renter while you build up liquid wealth. Let’s forget that all your friends are slaves to unrepayable debt in a world where rates will only rise in the years ahead while incomes may not. Ignore the fact real estate is bloated in price as never before, supported entirely by credit, and immensely unstable. You can pretend we’re not facing a demographic tsunami of wrinkly, wheezy Boomers in thirsty undies who will need to bail from their houses to create income.

Even if we nix all the evidence that it’s impossible for houses to keep inflating, and Alvin is a greater fool for giving in to mere male mutilation (wimp), this Forever house thing is still a bad idea. We’re just creating expectations that will never be fulfilled.

For starters, nobody except a termite in Leslieville stays in the same house an entire lifetime anymore. On average (says StatsCan), people move once every five years. The typical 50-year-old will have changed residences at least 10 times. In the US, 45 million a people pick up and change houses annually. In fact, every five years, about 75% of the entire country moves. At least, they did until the real estate market collapsed circa 2008. Suddenly millions couldn’t find buyers for their homes, preventing them from chasing jobs which suddenly got more scarce. There’s a lesson here, right?

Canada Post (they track this stuff) reports that most people move within their own province, but about a fifth of us venture farther afield. You want to live in a place where most people (58%) stay in one place? Then go to Moncton. Rock out.

So, Alvin, if you ever plan on chasing a better job, or understand you could be fired, laid off, promoted or transferred, then forget the F-house concept. And while you’re questioning things, how secure is your marriage?

Sorry to bring this up, but it sounds like a key point, given the Bobbit thing.

Despite the fact the proportion of married couples has been steadily falling (especially in Quebec, where a majority are now common-law), divorce is still a dramatic fact of life. On average more than four of every ten marriages blow up, with about 60,000 cases a year making it into the courts.

No real estate deal survives this. That means, right off the bat, there’s a 40% chance that at some point (probably not of your choosing) you’ll be forced to dump the house on the market, regardless of economic conditions. Real estate could be in the crapper then. Mortgage rates might be spiking. Maybe it’ll be the middle of January. Whatever. It will suck big. Mortgage break fee. Commission. Splitting proceeds. But that’s life. Nothing is forever.

Finally, where did all this house lust come from? Why do young people exit university, then start to heave and salivate over a mortgage and hardwood? How can you possibly know at 25 or 35 where you will best end up at 50 or 60? Unless, of course, you have little ambition and few dreams, no wanderlust, curiosity or flexibility. Mobility is freedom and independence. How that can be so casually cashed in will always mystify.

Imagine it. Every morning in the same house. Forty years of Groundhog day.

Alvin, wake up. I want you to go down to the parking garage. Get on the bike, buddy.

Ride.

188 comments ↓

#1 TurnerNation on 09.19.13 at 8:18 pm

Gnomeology 101.

#2 First, just kidding on 09.19.13 at 8:20 pm

I hear this excuse all the time from buyers, we’re gonna stay they’re forever. Worst rationale ever.

#3 Victoria Real Estate Update on 09.19.13 at 8:22 pm

I recently saw the following comment on this site:

“Ultimately as the past 6 years have demonstrates to all but the self-delusional, the Canadian RE market defies LOGIC. Its strength in the face of the economic cataclysm of the past 6 years has humbled all those who attempt to forecast what it will do. And it likely will continue to do so.”

This comment sounds like something your neighbourhood realtor would say. It’s completely false. It is intended to make you think that now is a good time to buy because the Canadian housing market is strong and immune to any sort of price correction (it’s different here).

House prices in Victoria peaked in 2010 and have declined since then, making Victoria’s housing market weak in comparison to other Canadian cities. However, house prices across Canada, in general, have continued to climb over the past 6 years.

Why have house prices continued to climb since 2007? It’s quite simple. Since 2000, the Canadian housing market has been receiving an enormous amount of housing market stimulus. It has come in the form of extreme amounts of taxpayer backed mortgage insurance through CMHC, Genworth, etc.. The total amount of taxpayer backed mortgage insurance in Canada has been much more than the US total since 2000 (population adjusted). This extreme stimulus is the only reason that house prices in Canada have not corrected yet while the US experienced a crash.

This chart shows that Canada’s household debt-to-income ratio has continued to climb since 2000, while this ratio in the US peaked at the end of 2007 and has been moving lower since that time. This shows that Canadians have been given the ability to take on extreme amounts of mortgage debt since 2007 while Americans have not.

Realtors, real estate boards, mortgage brokers and the median always avoid talking about this. They would much rather have you think that house prices in Canada have continued to rise since 2000 because Canada’s housing market is “strong” or “resilient” (two of the most commonly used adjectives). What they fail to mention is that, without the extreme amount of housing market stimulus that has been applied to the housing market since 2000, house prices in Canada would probably be about 50% lower than they are now.

In early 2009, house prices in many Canadian cities were dropping fast and would have continued to drop, but a dramatic, unprecedented, emergency intervention turned the entire Canadian housing market around. This was done to stimulate the Canadian economy which was very weak and deteriorating quickly. Realtors will tell you that prices dipped a bit, but then took off again because the Canadian housing market is resilient. They refuse to attribute the housing market turnaround in 2009 to the extreme stimulus that was applied to the market.

Girls and guys, do not buy a house in Victoria until the household debt-to-income ratio has moved downward as this will be the beginning of the big price declines. This will be the signal that Canadians no longer have the ability to take on the current extreme amounts of mortgage debt – the only thing that is preventing house prices from correcting dramatically. This chart shows that the big price declines in the US only started to happen at the end of 2007, the exact time that the US household debt-to-income ratio started to move downward (on the chart I referenced above).

The government has taken action to make this ratio decline in Canada and it is considering more action to guarantee this result. Why would you buy a house now when you know that the big price declines are just around the corner?

Watching house prices drop in Victoria won’t be much fun if you buy a house right now.

Until next time – Cheers!

#4 Derek R on 09.19.13 at 8:23 pm

You can’t tell ’em, Garth. But good of you for trying anyway.

#5 Alex Smith on 09.19.13 at 8:24 pm

Taking your advice Garth. Vancouver condo up for sale and we’re hold our breath.

Then we are off to rent (much cheaper) in the interior. We’ll see if we made it under the gate…

#6 shanks on 09.19.13 at 8:26 pm

First

If you’re going to make an idiot of yourself, at least be first. — Garth

#7 Jimmy on 09.19.13 at 8:28 pm

Still doesn’t guarantee getting any action.

#8 Sick of it on 09.19.13 at 8:31 pm

Garth ..everything would be more credible if you wouldn’t be pushing people toward “liquid wealth”. Let’s not forget that that liquid wealth can evaporate in an instant with all these swings we are seeing these days on the stock market.

Why would you buy stocks? — Garth

#9 takla on 09.19.13 at 8:34 pm

excellent blog tonight garth!After the long winter{happily married,4 kids,1 wife ,20 plus yrs in the same home !!}this blog hits home.Im sure their are many blogsters here that can relate looking back at thier own lives .When we married and the baby bump appeared my 78 lowrider went on the sales block,no more west coast chopper.Finally after the last rug rat left the nest I finally got my ride back!!! TC 95 cu in FLTR, wind in the hair at last and all those nasty morgage renewals are just a distant memory…..

#10 Donald Trump on 09.19.13 at 8:38 pm

“That’s it. I’ve given up. I can’t hold out any longer, or she’ll simply castrate me in my sleep. I’m putting in an offer this week, a low ball. But I figure it’ll work out even if we pay too much. It’s going to be our house for at least the next 30 years.” – Alvin (East Vancouver)

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

That’s it, I am done….into my villains lair/bunker I go.

BTW…no evidence that I have to pay any taxes….that is for surface suckers.

If East Van bends over….its Armageddon time !

#11 ponerology on 09.19.13 at 8:39 pm

75% every 5 years? that’s nuts. I read somewhere that stress wise moving is up there in terms of stressful events along with getting a new job and death in the family. And on top of that everytime one buys a new house there are additional fees/expenses/taxes for the pleasure of doing so.
I wonder if this applies to renters too…

#12 Bob Rice on 09.19.13 at 8:39 pm

Although nothing is certain, I like the idea of staying put for a long time in one home. I grew up like that and I think you’re not recognizing a basic human instinct(s). Putting down roots in a community – stability, familiarity, comfort… these are important things for many, if not all, human beings.

I have to disagree with much of this blog this eve. even though I thoroughly agree with you that it is plain dumb to buy at peak/high prices.

Is life not too short to spend it in repetition? — Garth

#13 Liquid on 09.19.13 at 8:41 pm

People have to be pragmatic when choosing a home. With the current unstable job market it’s not realistic anymore to expect to live in a house until retirement. I was one of those salivating young people who got myself into a mortgage almost right out of college. I remember being really excited back then. But did not comprehend the risk I was putting myself in with my 6% downpayment, and only 6 months of work experience. I was lucky that was back in 2009, and if I were to sell my place today it would be worth at least $50K more than what I originally paid for it. But that was just fluke timing in the market and I know I can’t rely on good fortune forever :)

#14 Smoking Man on 09.19.13 at 8:42 pm

So Diana Frankenstein Is pushing a bill threw congress as to who qualifies as a journalist, , if you can what do these people think. So the way I see it is if you can wheel a telly prompter your a journalist, have un sanctioned opinion. Your scum.

What does this new law make Garth. ? trying to invent a word.

Technicolor slime?

#15 Macho Man Randy Savage on 09.19.13 at 8:45 pm

#12 Bob Rice on 09.19.13 at 8:39 pm
Although nothing is certain, I like the idea of staying put for a long time in one home. I grew up like that and I think you’re not recognizing a basic human instinct(s). Putting down roots in a community – stability, familiarity, comfort… these are important things for many, if not all, human beings.

I have to disagree with much of this blog this eve. even though I thoroughly agree with you that it is plain dumb to buy at peak/high prices.

Is life not too short to spend it in repetition? — Garth

————————–
I’m with Bobby on this one. Find a good job in a community you love, stay there and raise a family and vacation the world whenever you want to.

Exciting. — Garth

#16 Keith in Calgary on 09.19.13 at 8:48 pm

I am sitting in my suite in the Sutton Place Hotel on Burrard Street in downtown Vancouver as I type this.

It has been sunny here for two days in a row !!!!!!

I just finished telling my wife how beautiful Vancouver is during my daily phone call I always make to her to her while travelling. Yesterday afternoon on Granville my taxi stopped at a light beside a black Rolls Royce Phantom with some hipster dude in a black t-shirt, a beard, and bad hat, driving the thing. People everywhere with no apparent means of support (or hygiene) have I-phones and eat in $20 burger places. The real estate for sale signs are epidemic……..and every agent’s name is non-caucasian. The Weather Network says it will rain tomorrow, and I’ll snap out of it.

#17 Smoking Man on 09.19.13 at 8:50 pm

#151 anon on 09.19.13 at 5:48 pm
#148 anon on 09.19.13 at 5:31 pm

Who said anything about me being the loser? Its your people who are the losers in this. I’m merely profitting handsomely in destroying what you people had.

Canada belongs to me and my people, the people formerly known as Canadians have been disgraced, displaced, and erased, not me.

I merely empathize with them, while their own ancestors (who wil be known as boomers until time stops) have foresaken them.
………………………………………………..

You sort of have a point there, my mentors where your people, they ate bacon, they were smoking men, no one tells them what to eat say or do.

And you can trash talk Canadians all day long. they wont do shit.

But put on some skates and some hockey equipment and talked like that. you will be shopping for dentures fast .

Stay off the ice…………………..

#18 Haha on 09.19.13 at 8:55 pm

If you’re going to make an idiot of yourself, at least be first. — Garth

awesome… And true.

#19 dosouth on 09.19.13 at 8:57 pm

Dad was in the military, we kids followed in different careers. We are now living in our 19th residence and we’re under 60. Heck our daughter is under 30 and she is in her 7th place in 9 years of her career. Have to follow where the corporation and promotions take her.

P.S. – This place is back on the market in Nanoose, B.C. $100k under assessed and on the water….but we will wait for the dream home that will surely come our way?!?

http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13654810

#20 omg on 09.19.13 at 8:59 pm

NO BIG RE Meltdown Any Time Soon

No tapering in September means it will likely wait until after a new Fed Chair is swore in. Its not likely things in the US will improve enough in the next couple months to make tapering any easier, and come end of November everything government shuts down until after Christmas. That almost guarantees no tapering until the new Fed chair gets in and has time to get the lay of the land. So we are looking at emergency interest rates for at least another 1/2 year and who knows where the economy will be then.

All this means is a continuation of super cheap money and that means no real correction of the Can RE market.

While a lot is made of recent interest rate increases a real meaningful increase is needed before RE prices will drop. I am talking a real correction – not the pansy-ass*d 10-15% that gets thrown around – that takes us back to what – 2010 prices!!

The correction will come, and income to RE price multiples will return to longrun normals but this may take a decade or 2 to happen. Interest rates have to run up by 2-4% and boomers will have to start vacating their houses and that is going take a while. Plus inflation will eat away at the real value of houses year by year.

So keep renting and keep putting the dollars you save into liquid investments. 10 to 15 years from now you’ll pay cash for your house at real prices that are 40% to 60% below where they are now.

#21 Chickenlittle on 09.19.13 at 8:59 pm

You got it right tonight.
I have moved every 5 years on the nose for some reason or another. You never know what’s going to happen.

Like today, for example. I got home and guess what? My husband got laid off. I knew it might happen soon, but not today!

So here’s to a great day. SIGH.

I think I’m going to go and lay an egg or two for breakfast.

#22 Bob on 09.19.13 at 9:06 pm

#3 Victoria Real Estate Update

“Watching house prices drop in Victoria won’t be much fun if you buy a house right now.”

——————————————————

I’ve read your postings quite a few times. I also follow the House Hunt Victoria blog. It seems as though sales have picked up from last year and prices are hanging in there. Especially anything under $600,000. Listings are down.

My question is about rentals. Are they reasonable compared to the price of real estate and are they easy to come by?

Do you know anything about the rest of the Island like Nanaimo?

#23 Saskatoon IS DIFFERENT! on 09.19.13 at 9:07 pm

saskatoon prices are rock solid, and will be for many, MANY years.

proof:

1. economy is BOOMING here…no signs of slowing
2. house prices go up 7-8% per annum
3. house prices AREN’T unaffordable (like vancouver)
4. university keeps rentals stable
5. loads of people keep moving here

in other words, much real estate in canada is going to tank…but not where i live.

#24 Freedom First on 09.19.13 at 9:13 pm

Alvin, Alvin, Alvin. Sounds like you moved out from your mommies to be with your new mommy. Alvin, move out today. Get your own place. Live by yourself for a few years, learn, grow, grow up, get some ball$. She doesn’t love you.

#25 TJ on 09.19.13 at 9:15 pm

Garth,

With all respect to you, there is nothing wrong with someone who strives to be a pillar of their community. It is an important and seemingly forgotten aspect of civic life. It may not be your cup of tea but some of us find fulfillment and great joy in watching our local community grow and thrive — the kind of joy you can’t measure by zeros in your bank account.

#26 Musty Basement Dweller on 09.19.13 at 9:16 pm

OMG this is an awesome post Garth. You are so entertaining with your writing, I was laughing the whole way through. Thanks the entertainment and good advice too!

#27 omg on 09.19.13 at 9:17 pm

#3 Victoria Real Estate Update – hey that’s my quote your mis-interpreting ;)

We both are of the same belief – that prices are crazy in Victoria and will come down. We just see this happening in different time horizons. I see it happening over the next decade or two with a correction back to normal income to RE price levels- I am talking a 40% to 60% reduction in REAL DOLLAR value of houses.

The robustness of the RE market in Canada (and Victoria) in light of the economic problems of the past 6 years defies logic and will likely continue to for the foreseeable future.

I am not buying and will not any time soon. Sold out in 2006 and have all my house equity invested so it has worked out just fine for me. I figure I’ll be paying cash for a nice place in around 2025. Until then I’ll happily rent and let my landlord take the hit on Victoria RE.

#28 Igor on 09.19.13 at 9:18 pm

Thank you Garth -Great Post ,I want to read your books.
And I am so sorry that the Values you are talking about here -are no longer the values of many (may be most ) …

#29 Cici on 09.19.13 at 9:19 pm

#11 ponerology

From a renter’s perspective, yes it does get expensive too. But the maximum I’ve ever spent on a move is $1,000, and that included all moving expenses and a 300 km drive from one city to another.

I must admit, I hate moving, but I am getting used to it (I average about one move every two years). In hindsight though, the expenses are way under what most home owners would have to assume. Even if you buy into a home that doesn’t need any major renovations, you’re likely to want to tailor it in some way or another within the first few years of moving in…and there are always nasty hidden maintenance and upkeep fees.

One day I would like to have a house, BUT, if unless the PRICE, HOME and LOCATION are PERFECT, I’m not going to waste my time. I have better things to waste my money on.

#30 Post Haste on 09.19.13 at 9:20 pm

Garth – it’s not often but I gotta disagree with you on this one. We bought our home like everyone else from plans in this neighbourhood. 12 years later, of the 15 homeowners on my court, only 3 of the original 15 have moved. 1 was due to a divorce, the other 2 – not sure. We hit the ideal area.

We are an hour’s drive from Toronto, we are 1 hour’s drive to the Muskoka area, 45 minute drive to Blue Mountain – and a 5 minute drive to beautiful lake Simcoe. Besides wanting something different, our kids love the area, we bought in when prices were realistic and if you love the outdoors – we got the best of both worlds.

the stats may say otherwise, but like trading in your car every 4 years, it’ll cost more in the long run.

#31 Mr. Frugal on 09.19.13 at 9:21 pm

House prices would be alot more affordable if people weren’t so emotional about home ownership. If housing is too expensive – and it is, it really is then the answer is quite simple – rent. There I said it – it’s a four letter word and all. If more people were analytical rather than emotional, these high prices would not be supported. It’s really quite obvious if people stop buying at inflated prices, the price will go down. At the end of the day the fool and his money will go separate ways. Just glad I’m not riding on that bus. Garth, thanks for the advice. Some of us are listening and picking up a little coin along the way.

#32 Bob Rice on 09.19.13 at 9:24 pm

Garth, I think we’re coming at this from different cultural perspectives.. or perhaps different life experiences or both.

Most people I know actually spent a good chunk of their lives living on the same street.. their parents still live there in many cases, mortgage free and living well.. don’t seem to be starving or pressed to sell… lots of older folks love to garden so they hang on to their homes. My father made a good point recently. He said, “Why should I sell my home right now and go through the hassle of moving and all the fees attached to that to live in a condo box that is not only smaller, but not really that much cheaper once you apply condo fees… i like my garden and my neighbours”

I think this is a healthy attitude… some people like to be settled in. It’s a temperament and personality hat suits him.

I grew up used to living on the same street and knowing people.. we didn’t need to move. Having said this, perhaps if you can get a “decent’ deal now, maybe taking buying for the “long term” isn’t such a bad idea.

#33 Derek R on 09.19.13 at 9:25 pm

#21 Chickenlittle on 09.19.13 at 8:59 pm wrote:
Like today, for example. I got home and guess what? My husband got laid off. I knew it might happen soon, but not today!

So here’s to a great day. SIGH.

Sorry to hear that, CL. There’s never a good day for that sort of news, eh?

Here’s hoping he’ll get something else soon.

#34 Dr. Bunsen Honeydew on 09.19.13 at 9:28 pm

Geez that story sounds so much like mine right now it’s eerie. Have you bugged this place Garth?

Having though a lot about this dynamic I’m convinced that it boils down to insecurity. She’s insecure so wants to tie him down with a mega financial commitment, he’s insecure so can’t muster up a rational argument to offset the emotion. Everyone’s insecure unless they’re purchasing something thanks to rampant consumerism. I totally agree Garth. People need to just log off of realtor.ca, put the iPad down, breathe, go outside, live and be thankful for what they already have but take for granted. A peaceful, permissive, supportive society. Hopefully health. The basics.

Geez I gotta go, my toddler is flooding the bathroom. Good thing I rent this place.

#35 Al on 09.19.13 at 9:29 pm

With Blackberry laying off 5,000 and companies that supplied BB like Celestica laying off thousands, how are these people going to pay their mortgage?

You just made my point. — Garth

#36 vangrrl on 09.19.13 at 9:30 pm

‘Mobility is freedom and independence’.
Touche!
It’s mind boggling to me when anyone, particularly young people, don’t feel the wanderlust.
On the topic of marriage- also mindboggling to me, but tomor is my parents 44th anniv. Congrats mum and dad! ;).

#37 DaleFromCalgary on 09.19.13 at 9:30 pm

Garth: Nothing wrong with being happy in one place. I bought my house in 1982 on a 15-year mortgage and 10% down. Rented part of it out until I paid off the mortgage in 1997. I hope to be here another twenty years before the kids put me in a nursing home or the grave. Lots of neighbours still here after decades.

I pity those who keep moving and never establish roots. When you’re in your twenties, okay, you have to chase jobs. If you’re forty and still can’t find a permanent place, there’s something wrong with your life.

#38 Cow Man on 09.19.13 at 9:34 pm

Sir Garth:

“Is life not too short to spend it in repetition?” — Garth

Lets see. I lived in the same house for 60 years and had the same job for 40 years. And I read Garth’s blog every day it is published. Is that not repetition? I loved where I lived. I loved my job. And I enjoy reading Garth’s blog and his books. Is that so bad?

#39 Cici on 09.19.13 at 9:35 pm

#12 Bob Rice and
#15 Macho Man Randy Savage

I know you both have good intentions, and personally, I would have loved to have been able to believe in that theology (I’m from a small community, enjoyed housing stability as a child), the reality of it is that for most, the world has changed, and is still changing ever more drastically.

Garth is pointing to this reality by advising people to stay flexible and mobile, but not out of any disdain for some ideal perfection, but because he sees a lot of risk in the economy, and wants people to be able to migrate with jobs rather than being stuck in limbo in a sinking economy with sinking assets.

I know where he is coming from, because had I bought into a certain city that I had been living in some 5 years ago, I would have been screwed in terms of employment. I went where the better jobs were (and less competition) and ended up liking the new city even more. And I gained a lot of self-confidence in my own independence. And although I’d fancy staying in this new city for a great length of time, I now know better than to become too emotionally attached. If it works out, excellent; if not, I will chase my dreams and ambitions and find some place even better.

Times have changed and for our greater good, we need to be practical. It may seem sad, but it doesn’t have to be. Every lesson and life change can be rich and rewarding :-)

#40 TurnerNation on 09.19.13 at 9:36 pm

Oh yeah saw this on my news feed.

Bitcoin eat your heart out. What could possible go wrong. I’ll take mine in the back of the hand, plueeze.


Post says Royal Canadian Mint to test digital money

2013-09-19 09:18 ET – In the News

The Financial Post reports in its Thursday edition the Royal Canadian Mint will soon begin pilot testing novel form of digital currency that so far has received little attention but which has the potential to revolutionize how we do business. The Post’s John Greenwood writes interest in so-called crypto-currencies is exploding for a variety of reasons, not least because of loss of faith in traditional money in the wake of recent central bank money-printing. Digital money such as Bitcoin, Litecoin and on-line game currencies are starting to garner attention, but there is a big difference between them and what the Mint is doing. As a government organization, the Mint has the backing of the federal government, while Bitcoin and the like clearly do not. MintChip is “the future of money,” according to the Mint’s promotional video, which goes on to present it as a digital version that would be legal tender, just like physical dollars and cents. You would hold it on a smart phone or other electronic device, just like a wallet. The money could be used just as easily on-line or in person. Unlike credit cards, which merely link to a payment system run by the banks, MintChip is an actual digital representation of money.
© 2013 Canjex Publishing Ltd. All rights reserved.

#41 Shea on 09.19.13 at 9:36 pm

‘Forever house’ sounds about as bad as ‘our child can’t grow up in a rental’. Jumped feet first into home ownership last year based on that gem from the better half. Now the little one destroys my hardwood’s instead of the landlords .

Mortgage is only 1.5x gross income, house value is less than 40% net worth, so not worried too much about price drops. Still rather be renting.

#42 Looker on 09.19.13 at 9:36 pm

Seeing what is around in new sub division in 905 area, it looks like money is coming from overseas. Garth how do Canadian compete with people bringing suitcases of cash? They have driven up prices way past the income bracket. example North Markham 2400sq homes being build asking almost a $1 million and lineups from here to HK, not to mention no land included.

#43 Smoking Man on 09.19.13 at 9:37 pm

“That’s it. I’ve given up. I can’t hold out any longer, or she’ll simply castrate me in my sleep. I’m putting in an offer this week, a low ball. But I figure it’ll work out even if we pay too much. It’s going to be our house for at least the next 30 years.” – Alvin (East Vancouver)
……………………………………………………
Perfect example why real estate is so crazy high. Ball less men. Pun intended

For the most part we the people compete, we try and out do each other, and make the competition feel less than. Its what most of you do. Especially the wives.

As she looks into her skinnier girl Friends eyes while showing off that new big walk in closet, ferociously concentrating for just a twinkle of jealousy, the opponent cracks, a Millie second of a frown. Boom the homestress has an orgasm far beyond what here hubby can ever deliver.

You wana feel good, and give yourself luck, fork over 20 bucks to a homeless kids. It’s energizing. It makes you fell like GOD.

I like that feeling.

Sincerely

God.

#44 Devore on 09.19.13 at 9:40 pm

#12 Bob Rice

Although nothing is certain, I like the idea of staying put for a long time in one home.

I like the idea of a lot of things too.

#45 calgaryPhantom on 09.19.13 at 9:41 pm

From mobility point of view owning a house = owining a desktop computer. So not 2013.

Buy a tablet and rent. Chances are, you will change both after few years.

#46 Donald Trump on 09.19.13 at 9:42 pm

Dammit !!!!

……came this close… “” ….to winning the B.C. Gov’t “other’ lottery(ICBC).

Was doing some shopping, walked in the parking lot to the retail store.

I was walking along , as close to the parked cars on my RHS as is humanly possible…and all of a sudden…. to the left side of max. zone of peripheral vision….. this pearl – coloured metallic object appears .

Had I not noticed….and used keen reflexes…..and exited the kill zone….I could’ve made at least $250,000 Tax Free..maybe more.

This is why I love multiculturalism !

#47 Ben on 09.19.13 at 9:44 pm

How about a bit more on Montreal?

Ouch: http://www.canequity.com/stats/canadian-mortgages/quebec/graphs/quebec-mortgage-history.gif

#48 Mean Gene on 09.19.13 at 9:46 pm

Run Alvin run!!!

#49 Cici on 09.19.13 at 9:46 pm

#21 Chickenlittle

Awe Chickenlittle, sorry to hear that. Don’t get too discouraged, and don’t let him either.

I’m sure everything will work out, just stay upbeat and put all of your energy into it!

#50 KG on 09.19.13 at 9:48 pm

Good post. Thanks.

#51 TurnerNation on 09.19.13 at 9:49 pm

Update on that Hamfisted overseas investor (“an oil magnate”) owning 60 Cityplace condos in Toronto. Splitsville for him. All condos on the block.
Person I know got a renters evection notice, from his agent. How nice. His ‘n Hers Condos.

#52 vangrrl on 09.19.13 at 9:50 pm

#11 and #37:
You assume that in the 5 yrs or so someone lives somewhere they don’t make friends with neighbours, ‘establish roots’- what are we, trees or people?- and build community. Not true. I have done it over and over again, in foreign countries where my neighbours spoke another language and I became a part of that community and thrived. Now I’m in Van where I live in a hood with fantastic neighbours and a very strong sense of community. But it doesn’t have to last 2 decades. Yes, it’s hard saying goodbye but to say that ‘there is something wrong with your ife’ because you enjoy having new, rich experiences whatever your age is pretty narrowminded.

#53 Cici on 09.19.13 at 9:52 pm

#25 TJ

That’s great for you :-)… but your missing the point.

Garth is simply saying that for most people, that dream is no longer a reality. It’s socioeconomic, and people have to be practical to survive. Holding onto unrealistic pipe dreams that could mortgage our futures is not going to help the majority of us.

#54 Real Estate King on 09.19.13 at 9:53 pm

#23 Saskatoon IS DIFFERENT!

You’re 100% correct. This will be Calgary in five years. I’m putting an offer in on a third rental property. I’m going to be so rich! Poor Garth, spending his sunset years beholden to an evil landlord such as myself! LOL!

#55 Smoking Man on 09.19.13 at 9:58 pm

#53 Cici on 09.19.13 at 9:52 pm
#25 TJ

That’s great for you :-)… but your missing the point.

Garth is simply saying that for most people, that dream is no longer a reality. It’s socioeconomic, and people have to be practical to survive. Holding onto unrealistic pipe dreams that could mortgage our futures is not going to help the majority of us.
………………………………………..
Cici practical to survive?

Why not try Crazy to Prosper. Works for me.

#56 snake on 09.19.13 at 10:01 pm

Get Your Monthly Retirement Paycheck INCREASE YOUR WEALTH THROUGH REAL ESTATE

http://www.bennettpros.com/gold_customform3.asp

#57 Smoking Man on 09.19.13 at 10:03 pm

Patiently waiting for Anon’s rebuttal. zzzzzzzzz

You need some work son, I can help. But only if you take a bite of that forbidden bacon laced apple.

Just do it when know one is watching, same way I sneak into rub and tugs threw the back door.

Live a little kid…..

#58 bah on 09.19.13 at 10:03 pm

22 years and I still like it here. Compares favourably to rent. Runs in the family.

#59 JohnMtl on 09.19.13 at 10:12 pm

“For starters, nobody except a termite in Leslieville stays in the same house an entire lifetime anymore.”

“Sorry to bring this up, but it sounds like a key point, given the Bobbit thing.”

Love your humour tonight :)

#60 tkid on 09.19.13 at 10:13 pm

My sympathies are with Alvin. Whenever a partner overrides the wishes of another partner, that partnership, the marriage, dies.

Run Alvin. Even if you buy the house, her heart isn`t coming back.

#61 Notta Sheeple on 09.19.13 at 10:23 pm

#54Real Estate King on 09.19.13 at 9:53 pm
“….You’re 100% correct. This will be Calgary in five years. I’m putting an offer in on a third rental property. I’m going to be so rich! Poor Garth, spending his sunset years beholden to an evil landlord such as myself! LOL………”
=========================

Myself, having lived in Calgary through three boom/bust cycles under multiple provincial premiers who use resource royalties to mask their financial incompetence, you’re definitely in for a rude awakening someday.

Then again, go ahead and be a greater fool; buy in at the top of a market. Just remember, banks don’t accept smugness as a form of currency when mortages are called.

#62 A Yank in BC on 09.19.13 at 10:28 pm

I think that dear Alvin exaggerates for effect, or at least I hope so.

#63 Walter Safety on 09.19.13 at 10:30 pm

Sure give away your equity every 5 years by moving . 400k home 100k equity ,cost to move , 6 % of 400k = $24000. Or 24% of equity.
No wonder people are old and poor.
Forever home maybe a unreasonable assumption but not as dumb as not counting the cost to move.

Life is not about avoiding commission. — Garth

#64 Big Bear on 09.19.13 at 10:32 pm

#27 OMG

The party is over in Victoria. Fukushima will make sure of it. Look into radioactive plumes coming to your neighborhood. Best you head east my friend.

#65 Victoria Real Estate Update on 09.19.13 at 10:34 pm

#22 Bob

SFH sales in Victoria have collapsed in the last 2 years.

So far this year, total single family home sales are on pace to equal 2012’s total which was the lowest total since 1982.

Sales in 2012 were 30% less than the average from 1985 to 2009 and 43% less than the average from 1988 to 1992, when Greater Victoria’s population was much less than it is now.

House prices in Greater Victoria peaked in the summer of 2010. There has been significant skewing of the median, average and Teranet HPI numbers since early spring in Victoria as high end home sales have completely dominated the market. Don’t rely on these numbers right now as they do not paint an accurate picture of how much prices have dropped from peak.

A recent house sale (1711 Haultain St.) shows us that prices are indeed correcting at this time. This house sold for $447.5 K in June 2010 and recently sold for about $300 K, a 33% price drop from the peak.

As far as rentals are concerned, the vacancy rate in Victoria has increased 600% over the last decade. The number of houses, townhouses, condos and apartments for rent is shocking compared to the number of available rentals in Victoria as recent as 2009. Many young people have left Victoria in search of work elsewhere as Victoria’s economy continues to weaken. Rentals are very easy to come by and renting makes a lot of sense until prices come down over the next couple of years. There is no question, it doesn’t make sense to buy a house in Victoria at this time when you can rent the same property for less than the combined amount of mortgage payments, property taxes, maintenance, etc. , even while rates are still at historic lows (this assumes the average downpayment in Canada).

Victoria has had a buyer’s market for some time. Listings may have come down a bit lately, but that hasn’t changed the big picture. There is plenty of inventory out there in all price ranges.

I don’t know much about Nanaimo.

#66 Canadian Watchdog on 09.19.13 at 10:35 pm

Toronto Average Property Tax % of Average Household Market Income: chart

Canada, Ontario and Toronto Issuance Costs chart

Gloom grows along with subway crowding

TTC riders crushed onto the Yonge line could be forgiven for rolling their eyes at Wednesday’s news: Premier Kathleen Wynne has appointed more advisers to look at how to pay for new transit lines, among them a relief subway into the downtown. More

Umm, so who's paying for TO's transit lines again? Toronto's developer-owned barbie and chief planner, Jennifer Keesmaat, had this to say during a Q&A with Toronto Life:

Q:You’ve launched a public consultation initiative called “Feeling Congested?” to, in part, solicit public feedback on how to raise funds for improved transit. What’s your preference?

A: Anything that’s quick to implement, such as sales and property taxes. Really, I don’t care how we do it, as long as we do it.

And people wonder how big cities like Chicago are bankrupt.

#67 Macho Man Randy Savage on 09.19.13 at 10:43 pm

#63 Walter Safety on 09.19.13 at 10:30 pm
Sure give away your equity every 5 years by moving . 400k home 100k equity ,cost to move , 6 % of 400k = $24000. Or 24% of equity.
No wonder people are old and poor.
Forever home maybe a unreasonable assumption but not as dumb as not counting the cost to move.

Life is not about avoiding commission. — Garth

———————————

It is in my world – cutting out the middle man is what life is all about!

Wish I could buy my next house without a “buying agent” and represent myself. Silly real estate cartel…

#68 Notta Sheeple on 09.19.13 at 10:44 pm

“……..Let’s forget that all your friends are slaves to unrepayable debt in a world where rates will only rise in the years ahead while incomes may not. Ignore the fact real estate is bloated in price as never before, supported entirely by credit, and immensely unstable…….”
=========================

With the help of Sir Flatulence and the BoC, Canada’s Big Six banks have finally found that financial sweet spot where they can choke every last Golden Egg from the Canada Goose without actually killing it.

And, heaven forbid, should the housing market ever go into cardiac arrest (i.e. regain affordibility), there’s always the taxpayer-funded CMHC with shock-paddles on hot stand-by.

#69 T.O. Bubble Boy on 09.19.13 at 10:48 pm

Finally, where did all this house lust come from? Why do young people exit university, then start to heave and salivate over a mortgage and hardwood?

Are 25-year-olds really looking to buy a “Forever House”?

I think it is more common to see twenty-somethings look to buy condos (because houses simply aren’t affordable), then the late twenties / early thirties crowd buys the burbs home (some Mattamy-built place in the boonies because it is what they can afford), and then by mid-thirties they have school-age kids and actually care about what neighbourhood they are in (which is where the Forever-House actually starts making more sense).

If someone in their mid-20’s thinks that their priorities for a home won’t change, they are insane.

No wonder people are moving every 5 years… they are picking homes for all the wrong reasons (the ones that mattered to them in phases of their lives that will never happen again).

Heck – I’ve had friend even give up on their “Forever Home” to move in with aging parents and help care for them… or, need to seriously renovate their “Forever Home” to change it into an entirely different house – sometimes to accomodate a parent, or a nanny, or an extra kid, or just for handling the needs of teenage kids vs. what made sense for babies.

#70 HDJ on 09.19.13 at 10:54 pm

“Why do young people exit university, then start to heave and salivate over a mortgage and hardwood? How can you possibly know at 25 or 35 where you will best end up at 50 or 60? Unless, of course, you have little ambition and few dreams, no wanderlust, curiosity or flexibility. Mobility is freedom and independence. How that can be so casually cashed in will always mystify. Imagine it. Every morning in the same house. Forty years of Groundhog day.” Garth

My wife and I purchased our first home in our early thirties, after completing school, starting careers and finding a beautiful city in which to reside. Since then we’ve raised two children and enjoyed rich and satisfying lives. But for some pathological reason we’re still living in the same west coast city – born in Montreal. We’re also still in love and married. Pretty boring, eh? Wonder what’s wrong with us? Guess we have little ambition, few dreams, no wanderlust or flexibility. However, we do enjoy reading your views on real estate and economics. Cheers.

And no bike, either? — Garth

#71 What about CMHC? on 09.19.13 at 11:08 pm

Average says folks move every 7 years. The more you move, the more commission realtor makes! It’s a win-win.

#72 Jon B on 09.19.13 at 11:17 pm

The forever house is an interesting concept. If prices stay sky high here in delusional city, I think a lot of people might be spending more than five years in their home feeling trapped they can’t afford to move.

#73 Mixed Bag on 09.19.13 at 11:20 pm

A more perfect title there could not be for this post. A+

#74 Dan from Calgary on 09.19.13 at 11:28 pm

Like.

#75 El Cid on 09.19.13 at 11:31 pm

Less taper….more paper!

#76 Obvious Truth on 09.19.13 at 11:32 pm

# 20 omg

Fed needs to keep housing going to help the average US citizen. Most of the average persons wealth is in a home. Many are still underwater and stuck. Rising prices and low rates are very powerful for consumer spending.

Canadians are just beneficiaries of this.

Rates will stay low till they get inflation. Bernanke keeps laying this out but nobody reads. Statements are shorter than most menus.

Don’t listen to the money managers and economist that are always talking their book on TV. They all got on the same trade. Hedge funds were ready to take rates up and markets down thinking they had Ben backed in a corner. Tried to create a crisis of confidence.

The Chairman slammed down the gavel. Hedge funds be dammed no more 2 and 20. Start covering and chasing. He looked pissed to me. How short was he with the guy who asked about market expecting a taper.

Now they are trying to mock him so they look good to their clients. Trying to tell us market is overbought so they get another chance. This was bigger than most people think. The push could be extraordinary.

#77 Snowboid on 09.19.13 at 11:33 pm

#16 Keith in Calgary on 09.19.13 at 8:48 pm…

Here’s some advice on how to fit in better in Vancouver:

http://www.youtube.com/watch?v=pc-tVZq9a4Y

#78 Nemesis on 09.19.13 at 11:36 pm

“Get on the bike, buddy. Ride.” – HonGT

Works for me, AuldPol… in more ways than you might possibly imagine. I might even add, “Run!”.

ThursdayNightBiker’Bachelor’Zen:

“Let’s Ride!”

http://youtu.be/NvBHDRsFAmo

PS SaltyDogs – SupplementalFieldWorkCalls – eYesOnSite ScientificValidation of RandomOptimisitic DataPoints in TheBellyOfTheBeast… BackNextWeek. BachelorRiders? DressForTheCrash. AllTheGear. AllTheTime. NoExceptions.

#79 Ted54 on 09.19.13 at 11:42 pm

Jesus Garth! That’s some rant tonight, perhaps your underwire is more thirsty today than usual and has you little uptight.

#80 Nemesis on 09.19.13 at 11:43 pm

@SM…

Hardly a week goes by when I don’t talk to HomeLessKids.

Alas.

#81 what bubble? on 09.19.13 at 11:52 pm

According to recent IMF and CBO projections, the U.S. fiscal gap is far larger than the official debt and compounding very rapidly. The longer we wait to close the fiscal gap, the more difficult will be the adjustment for ourselves and for our children.

http://www.theinformact.org/

#82 Victor Ian on 09.19.13 at 11:52 pm

We found our forever house and are renting it!

#83 bob on 09.19.13 at 11:59 pm

This is one of your better posts Garth, thanks. Gives a nice little “summary” and good points of view in an entertaining written commentary. Thanks.

#84 Bob on 09.20.13 at 12:00 am

#65 Victoria Real Estate Update

————————————–

Thanks! I appreciate the info.

#85 young & foolish on 09.20.13 at 12:00 am

Ahhh … freedom, Easy Rider like …… Houses are for fogeys!

Please line up behind the yellow line for a rental application.

#86 CrowdedElevatorfartz on 09.20.13 at 12:09 am

I once moved 7 times in two years…….. I got pretty good at it……..

#87 Smoking Man's Old Man on 09.20.13 at 12:15 am

“But that’s life. Nothing is forever.”

Very well put, are you becoming a Buddhist Garth?

#88 What would Warren Buffet do? on 09.20.13 at 12:23 am

Warren Buffet bought his family home in Omaha, Nebraska in 1958 for $31,500. Buffet and his wife still live there, but I guess he won’t live there forever.

#89 Ogopogo on 09.20.13 at 12:49 am

This has been one of my all-time fave blog posts. It reminds me of a post in the early days when I started reading the blog in late 2011 and Garth berated young people for rushing to dig debt-sodden roots by buying overpriced real estate instead of going out into the world.

Having lived abroad and traveled in dozens of countries I’m always shocked to find how many in my generation (X) have “settled” into a life of bovine conformity and passivity, despite earning much more than I. Then again, those of us smart enough to learn from the Great Bearded One are already a breed apart from the herd.

#90 Pt Bob on 09.20.13 at 1:04 am

live modestly and debt free and watch your creativity flow http://www.120squarefeet.com/2013/09/live-deliberately-thinking-about-money.html

#91 Screwed on 09.20.13 at 1:29 am

Garth, being mostly in cash and holding some metals makes me very nervous since yesterday’s non-taper. XRE looks like a good and solid performer and yield at close to 5% is a no brainer. Any other recos? Time to go back all into paper is unfortunately now.

#92 rentin on 09.20.13 at 1:45 am

Sold our 2 houses this summer. Doubled our money in 10 years, just barely after netting out all the costs.

Entry level home in Vancouver worth 2 million in 2023. I don’t think so. House in Kits worth 5 million?

Whatever the markets do the debt remains. Bank shares are still paying 4%. What is your house paying you?

Good luck everybody else!!!

#93 Ted on 09.20.13 at 1:50 am

Just wanted to say thank you, Garth. As an eyewitness to the Japan’s bubble in the early 90s, I am very cautious about gettig into the current housing market in Vancouver. Meanwhile, thanks to this blog, my diversified portfolio is doing very well.

#94 HDJ on 09.20.13 at 2:00 am

“And no bike, either?” — Garth

Of course I have a bike. A beautiful Trek road-bike, upon which I cover about 300 km per week, rain or shine and 12 months of the year. Somewhere on Vancouver Island, obviously.

#95 live within your means on 09.20.13 at 3:07 am

I have moved at least 30 times in my life. Have only owned 2 homes (one with an older sis). Hubby & I bought my sis out when we both got married same day 26 yrs ago. In ’91 bought our current home w/25% down. Paid it off in 7 yrs. as interest rates were high. We lived frugally.

We have great neighbours, socialize with them and have attended an annual st. party since ’91.

Younger sis & hubby in PQ sold a home a few years ago & planned on renting. Instead, as ‘homes always increase in value’ they bought a lovely ground floor 2 level condo w/patio & garage. Long story but they now have to sell IMMEDIATELY. Her husband was the one who pushed her into buying instead of renting. It’s not always the woman.

#96 Vanmx on 09.20.13 at 3:09 am

Found this old article on the crest of the US housing crash. But it’s different up here right?

Newspaper, Bubble Blogs Feed the Real Estate Obsession
http://www.pbs.org/mediashift/2006/11/newspaper-bubble-blogs-feed-the-real-estate-obsession333/

#97 live within your means on 09.20.13 at 3:16 am

Garth – no wonder you have so many readers. You have such a way with words, besides providing good advice.

#98 Buy? Curious? on 09.20.13 at 3:35 am

Blackberry is laying off thousands! THOUSANDS! With the bulk of those jobs being in Waterloo!

OMG!

http://www.youtube.com/watch?v=MGlNzV0thGY

#99 live within your means on 09.20.13 at 3:36 am

And no bike, either? — Garth

OMG – 1’s OK, but hubby has 3 – 1 w/sidecar. A friend will store it this winter. They’re all 80’s BMW bikes & he’ll bring 1 into his workshop in the back basement to work on it again. I can hardly move in there as it is. His twin bro in Mtl. just bought another old one for a pittance. It was just an electrical problem & is now running.

#100 nubbers on 09.20.13 at 4:32 am

Alvin, for F’s sake don’t do it. I speak from very similar personal experience when I say that you will regret this decision for the rest of your life. Mortgages last a lot longer than marriages.

Five years from now, when she has moved in with the solvent guy, who didn’t buy at the top, don’t say you weren’t warned.

#101 World Traveller on 09.20.13 at 6:05 am

#14 Smoking Man on 09.19.13 at 8:42 pm

http://www.wnd.com/2013/09/matt-drudge-eviscerates-facist-dianne-feinstein/

#102 Steven on 09.20.13 at 6:25 am

After all, ya gotta live someplace and there’s nothing wrong with real estate – if it’s affordable.

There is no affordable real estate in Canada and may be not even on earth Garth. Real estate is a luxury for the rich. If you are not rich living some where is not nessesary. In the view of the rich profits and power are nessesary and 95 % of the population of the earth is not. See the Georgia Guidestones for details. Ebeneazer Scrooge would be proud of the real estate market, its fans for and the elites that run the world.
Your typical real estate cultists figure that a good investment consists of obtaining a property, jacking up the price and screwing over the next guy for the sake of a roof over his head while believing the next guy has no choice but to buy.
That’s the problem with closed systems; it leads to criminal activity and other abuses.

#103 World Traveller on 09.20.13 at 6:50 am

I don’t know when “rent” became a four letter word, my parents rented until they were almost 40, they both made high incomes but bought with a large down payment (The house was just over 100K).

Couples buying in their mid 20’s these days have no hope.

#104 Ralph Cramdown on 09.20.13 at 7:52 am

#88 Shawn — “Specialization of labour is what it is all about. […] Some can sell their own house. Most of us have more valuable things to do with our time or are not skilled in selling houses.”

Normally I agree, but not in the case of real estate agents. Most of the time they spend ‘working’ for the purpose of their hourly rate is just sitting around waiting for the phone to ring and/or prospecting for customers.

To sell a house: Hire an appraiser so you know what the market says it’s worth; they have access to the local MLS. Find a real estate lawyer and get some forms. Buyers will be more comfortable, alas, if they’re your local agents’ standard provincial forms. Find a mortgage broker and get a bunch of his business cards. Write a feature sheet and take some pictures. Buy two ‘for sale’ signs and some plastic tubes (giant crayon coin banks worked for me) at Dollarama and a 1″x2″x8′ at the lumberyard. Double the quantities if it’s a corner lot. Wait for the busy selling season in your area. Assemble, install, put feature sheets in tubes. Put ad on Kijiji, Craigslist, whatever. Sell house.

Unless you’re making $2,000/hour in your day job, you’ll save money while having an interesting new experience. You’ll also meet all your local agents and find out how much less they’ll work for; this scheme will save money on commission even if you hire one of them. They’ll all tell you you’re selling it too cheap, but you’ll know what it’s worth because of the appraisal.

#105 2CentsCdn on 09.20.13 at 8:02 am

Great post …. and I feel for ya Alvin ….. marriage break ups are a huge reality in one’s financial future. Having been through it (12 years ago) and dated lots since …… I see a whole under world of 40 or 50 somethings trying hard to save face and hide the fact that they’re broke and gutted. Starting over again at 45 or 50 is tough to do and it strips the life out of many. You can see it in their face … they know they are done. When you divide a marriage with low or negative equity in half …. one realizes that despite the over financed big house full of “never pay event” furniture, HELOC TV’s, swimming pools and kids braces, and the two fantastic leased cars …… that you really had nothing all along. You were renting a vision …. what we’re programmed to see as “successful” or “making it”. Usually only our parents hunch or marketing departments concepts.

Things involving emotions always costs money ….. and forever IS a long time …….. and I wish women would realize that just because a guy try’s to build a little “what if?” into your financial life doesn’t mean you are pre-dooming a relationship and aren’t committed.

It seems most women live in a world of emotions and visions ….. and money is just that nasty word that gets in the way of what they want.

Sadly … the man is often left with the clean-up and cheque writing while the woman is off onto the next shiny new thing and vision.

Alvin! … this is a dangerous mentality to let make financial decisions that will effect YOUR life forever …. whether she’s still in the picture or not. The odds weigh heavily that this will turn out bad for you.

#106 ponerology on 09.20.13 at 8:20 am

@104: I’m not sure. While I’m fortunate enough to be able to qualify for a mortgage that would allow me to buy an slightly better than average house in a moderate income neighborhood in Toronto, even if rates go to 5%, I just can’t justify it. I find that there is still some negative stigma around “renters” here (from certain political elements) claiming that they aren’t “tax payers” ect which beyond being untrue, is simply political pandering at its worst.

#107 detalumis on 09.20.13 at 8:33 am

It depends where you move to and what your jobs is, plenty of people stay in the same relative locations. Many people in the GTA stay in the GTA. My whole starter subdivision street in north Mississauga under the airport flight paths all ended up in south Oakville which is where they wanted to live in the first place. I am sure if you checked the stats of where people moved to it is from starter home to larger or nicer location not from Winnipeg to Vancouver to Moncton. I would tell young people to rent and save for a larger down payment and then buy a house you could stay in 20 years.

The one thing I will never do is make the retiree mistake of moving to a golf course community in the back of beyond or some province where the waiting list for basic bunion surgery is more than a decade.

#108 Castaway on 09.20.13 at 8:52 am

Is life not too short to spend it in repetition? — Garth

You mean like posting a daily blog. (;

It’s alway exciting, especially when it’s worth stealing. — Garth

#109 Penny Henny on 09.20.13 at 9:08 am

According to Garth there is no forever in regards to staying in one house.
I’m guessing that you also advise people against marriage.
Figure’s don’t lie, but liar’s figure.

#110 Castaway on 09.20.13 at 9:09 am

#25. SASKATOON is different.

Yeah right.
Housing Boom fueled by commodities. Check.
Temp immigration to fill those jobs. Check.
Biting cold winter. Check
Dillusional residents who believe RE will appreciate 7% per year. Check.

Ya, this is totally different than other over inflated Western Cnd markets.

Btw, I lived there for 5 years and went to UofS. Beautiful city. Loved it. But you are kidding yourself if you think it is different.

#111 Penny Henny on 09.20.13 at 9:11 am

Is life not too short to spend it in repetition? — Garth
————————————————–
Try that excuse on your wife when she catches you in bed with the maid.

You have a maid? — Garth

#112 Buttonbox on 09.20.13 at 9:20 am

Daily reader but never posted. My wife and I have been married 44 years and we are in our 22nd house. I married at age 27 and my total residences is 44. Don’t have a lot of close friends but certainly know a lot of people across Canada and the US.

#113 WhiteKat on 09.20.13 at 9:33 am

Real estate is the perfect place to put your money, if the following describes your situation:
1. You have more than 50K in non-registered accounts
2. You have a US birthplace

Reason: FATCA – coming soon to a bank near you!

#114 anon on 09.20.13 at 9:41 am

#57 Smoking Man on 09.19.13 at 10:03 pm

My advice is for sex selective abortion for the majority of canadians. There is a global surplus of males, especialy in asia (coming soon to a city near you!) who would love to have a white canadian wife.

If you can’t do that, at least write your sons out of your will and invest in your daughters. Encourage your sons to commit suicide, refuse to help them financially.

Seems like the best plan tbh.

You are done here. — Garth

#115 anon on 09.20.13 at 9:46 am

DELETED

#116 HD on 09.20.13 at 9:58 am

#39 Cici on 09.19.13 at 9:35 pm

Good to come across someone with good reading and comprehension skills.

Was it that hard to understand?

Best,

HD

#117 HD on 09.20.13 at 10:04 am

#52 vangrrl on 09.19.13 at 9:50 pm

Bang on.

Damn, ladies are nailing it today ;)

Best,

HD

#118 rosie "moving forward" in the knowledge that, "this won't end well" on 09.20.13 at 10:13 am

Lots of young readers on this sight. http://www.huffingtonpost.ca/2013/09/20/mls-phantom-listings-house-prices_n_3957237.html

A rewrite of the September 10th post on this pathetic blog. It was news then. Now it’s copy-and-paste journalism. — Garth

#119 Penny Henny on 09.20.13 at 10:20 am

Is life not too short to spend it in repetition? — Garth
————————————————–
Try that excuse on your wife when she catches you in bed with the maid.

You have a maid? — Garth
__________________________________________
Had

#120 Bob Rice on 09.20.13 at 10:39 am

@post #91:

Not everyone wants to live like a bohemian…

#121 Canadian Watchdog on 09.20.13 at 11:00 am

In a later interview, CREA chief economist Gregory Klump could not say if CREA's data included double-counted houses. But he estimated the phantom listings account for no more than 0.8 per cent of the housing supply available.

Ahhh, so when it's time for CREA to put their ass on the line and say something 'on record' that can or will be used against them in the court of law or tribunal, they decline and run like rats.

That's all I needed to read.

#122 Smoking Man on 09.20.13 at 11:01 am

#102 World Traveller on 09.20.13 at 6:05 am#

14 Smoking Man on 09.19.13 at 8:42 pm

http://www.wnd.com/2013/09/matt-drudge-eviscerates-facist-dianne-feinstein/

World Traveler been telepathically in communication with the Universal Conciseness Consolidator by passing everything the NSA has.

It said to me the real access of Evil in the world, or no wait, the lapdogs for the axis of evil are, johnn Mcccain, Lindsayy Gresham, and Frankenbitch……

Wouldn’t tell me who axis of evil puppeteers are. That’s a lie, saving it for my book.

#123 CJ on 09.20.13 at 11:02 am

I can just as rationally proclaim my apartment my “forever home.” It’s a renovated quadplex where my three neighbours have lived for 20-25 years. The landlord was born in the building 70 years ago, his mortgage was long ago retired and rent is below market rate. Why would I buy and how is calling a house a “forever home” any more rational than calling my apartment same?

#124 Just Some Guy on 09.20.13 at 11:14 am

I have only been reading this blog for the last few weeks but the insanity that Garth Turner has described in those eager to assume huge mortgage debt is clearly evident.

What I see around me is many, many occurrences of families that show all the signs of being in financial distress. I see it in people’s rushed behaviour, the intolerance for delay, poorly-maintained vehicles, manic consumption, and what I believe to be the general abandonment of the principle of living within one’s means. Saving for a rainy day has completely gone by the wayside.

Where the hell is this all going to end? I don’t believe there is much doubt as to the future outcome of decades of grinding debt and self-inflicted poverty. Collectively, we will become a very unhappy lot. Politicians will be forced to try to cater to the demands of this frustrated and unhappy lot particularly since recent history has shown us that the older segments of the electorate are the ones that are more likely to vote.

The solution is so simple. We need to live within our means and make best use of our money. As Garth Turner has indicated in previous posts, it is possible to get reasonable returns of six to eight percent from a balanced portfolio, net of the fees paid to a fee-based advisor. It just requires some foresight and some restraint, particularly when it comes to how much you decide to pay for a house. And even then, it makes much more sense to rent.

My own situation, and I do not say this to boast but only to underscore the viability of this approach, is that my wife and I have the following: a seven-figure portfolio of financial assets; a mortgage-free and modest house that is less than one third of our net worth; and no debts. We rented for many years and only bought the house because we felt we could afford it. It was paid off in six years.

#125 TEMPLE on 09.20.13 at 11:21 am

#95 HDJ on 09.20.13 at 2:00 am

Of course I have a bike. A beautiful Trek road-bike, upon which I cover about 300 km per week, rain or shine and 12 months of the year. Somewhere on Vancouver Island, obviously.

That’s awesome. Road biking on the island is decent. You are missing out if you aren’t going off road, though. From Campbell River to Victoria, there are thousands of kilometres of flawless, dedicated mountain bike trails, and further thousands of kilometres of multi-use public trails, fire access roads and decommissioned logging roads. There is likely more to the north, but I’d need an extra lifetime to get to it all. My road bike has pretty much been in permanent storage since moving back here.

TEMPLE

#126 Mister Obvious on 09.20.13 at 11:22 am

#16 Keith in Calgary

“It has been sunny here for two days in a row !!!!!!”
——————————–

Here’s news for you Keith:

It’s been sunny in Vancouver for the last three months. I was born here and have lived here all my life. (It can be done… although, not in the same house. Perhaps a dozen or more, in my case). Regardless, I have never seen such a long stretch of mostly warm, balmy days.

I thought this global warming business was beginning to alter the essential character of La-La Land but I just noticed that, starting today, the forecast calls for a week of ‘rain’ followed by a reprieve of ‘mostly showers’ for the following week, followed naturally by four months of grey gloom.

That’s more like it! Now that the nasty sun is out of the sky we can make our way to some open houses.

#127 Valkyrie on 09.20.13 at 11:29 am

Alvin, are you one of the chipmunks? good grief man, may the nuts you store not be your own. I think you may be living with one.

#128 Reactive on 09.20.13 at 11:30 am

I’m 35 and am surprised how very few people my age value flexibility. A lot of my friends are buying houses while I haven’t lived in the same place for more than 2 years. My wife and I may not be out in the bush chasing caribou, but we still consider ourselves nomadic hunters of sorts. We chase work. The idea of a nice quiet life without constantly trying to find moving boxes does sound lovely, but I don’t understand how settling into a suburban bunker for 30 years is realistic for people my age.

#129 HalifaxEd on 09.20.13 at 11:35 am

#37 DaleFromCalgary: “If you’re forty and still can’t find a permanent place, there’s something wrong with your life.”

Speak for yourself. Heading for mid-40s and still looking for adventure in new places.

Being nailed down or planted with deep roots might be your idea of freedom or a quality life, but mobility and the ability to chase opportunities, wherever and whatever they might be, is ours.

Sorry to hear that you think it’s “over” once you hit 40. For many of us, it’s still just beginning.

#130 Don Derc on 09.20.13 at 11:44 am

Well the deflation of real estate values (like cdn companies, and cdn stocks) are certainly happening but in pockets. Hamilton, the east coast, abbotsford/chilliwack etc speak the truth. Vcr/Tor will bite you in the rump in 18 months (summer 2015) – don’t worry – it will be a slow crawl – it’s all by design. I want to buy a pre-sell 600 sq ft condo in dwntwn Vcr – my first true love – for $232K – the parking space is an extra $30K (pass)- will it eventually drop in price and rebound? Don’t care – it’s the $150 a month condo fees in 2014 that turn into $350 a month fees in 2020 that scare the you know what out of me. Vcr council clearly demonstrates they do not know how to handle money – then so do cdns. I’ll sit in my surrey townhouse (mtge free) for now and buy when the slaughter begins (which is now actually ha ha) – patience is a virtue.

Sorry about Alvin’s Bobbitt thing – i advise his wife to do what Loreena did when she chopped her hubby John – she ran off to the Czech Republic and changed her name to Loreena Cutchyacockoff.

nuff said….

#131 Valkyrie on 09.20.13 at 11:51 am

According to Garth there is no forever in regards to staying in one house.
I’m guessing that you also advise people against marriage.
Figure’s don’t lie, but liar’s figure.

Well Penny Henny, past performance is not an indication of future performance. The world it is a changin’.
Ask someone much younger in age and outlook than yourself.
Marriage is a business contract, why marry a money dummy?

#132 Canadian Watchdog on 09.20.13 at 12:05 pm

They changed their mind after saying taper is off two days ago.

Fed could taper in October, depending on data: Bullard

The Federal Reserve could still scale back its massive bond-buying program at an October meeting should data point to a stronger economy, St. Louis Fed President James Bullard said on Friday.

This is becoming a complete circus and my expectation is the market is going to let the Fed know what happens when you keep toying around as they did in 2008 and 2010. It should be obvious by now that the Fed needs a crisis or stocks to tank in order to unleash the next round of QE.

#133 rosie "moving forward" in the knowledge that, "this won't end well" on 09.20.13 at 12:12 pm

Follow up. Lot’s of hand wringing and, ” it’s not me eh.” Like I said, the younger crowd reads that site for news. I guess, to them, this is news. http://www.huffingtonpost.ca/2013/09/20/mls-phantom-listings-house-prices_n_3957237.html

#134 Donald Trump on 09.20.13 at 12:38 pm

Etymology of the world “GOVERNMENT”

http://en.wikipedia.org/wiki/Government

Government is a compound formed from the Ancient Greek κυβερνάω (kubernaō, “I steer, drive, guide, pilot”) and the Latin -mente, ablative singular of mēns (“mind”).

Thus Government = managing/controlling the minds of the citizens.

#135 The Prophet Elijah on 09.20.13 at 12:39 pm

#42 Looker on 09.19.13 at 9:36 pm
Seeing what is around in new sub division in 905 area, it looks like money is coming from overseas. Garth how do Canadian compete with people bringing suitcases of cash? They have driven up prices way past the income bracket. example North Markham 2400sq homes being build asking almost a $1 million and lineups from here to HK, not to mention no land included.
———————————————————-
Exactly, due to bail ins just revving up ie Poland, Cyprus – then whose next. People are hiding capital and RE is one place to do it. Sucks for locals of course, but this will be excalating.

#136 father on 09.20.13 at 12:47 pm

good job canadian watchdog, maybe they postponed because of obomacare.

#137 Ralph Cramdown on 09.20.13 at 1:03 pm

#135 Shawn — LOWER HOUSE CONSTRUCTION COSTS

http://miltonsearch.com/2008/02/09/rolling-off-the-line-your-house/
http://www.youtube.com/watch?v=DdWA58kWsfU

http://www.youtube.com/watch?v=u4KfJztaJ5I

#138 Musty Basement Dweller on 09.20.13 at 1:04 pm

See attached link. It looks like the central banker dude from India actually has a set of balls. And is exhibiting some leadership qualities.

Seems rare for other people in similar jobs these days.

http://cnnmon.ie/14qBH1q

#139 Divorce on 09.20.13 at 1:06 pm

On average more than four of every ten marriages blow up, with about 60,000 cases a year making it into the courts. No real estate deal survives this. That means, right off the bat, there’s a 40% chance that at some point (probably not of your choosing) you’ll be forced to dump the house on the market, regardless of economic conditions.

There is an even stronger argument for not buying a house that would apply to any married person that has bought the house with assets they earned prior to marriage. In Ontario, if that house is your residence it becomes the “matrimonial home” in the eyes of the law. After divorce 50% of the home equity (value – mortgage prinicipal) will become legal property of the spouse, *even* if they made zero contribution to that equity. Other assets get a more fair treatment, where the court will subtract assets at date of marriage from assets at date of separation to determine “family property” that is divided.

So if you buy a house of residence for yourself and your spouse (with your money), you are essentially signing up for a large settlement for your spouse if you should divorce.

#140 Calgary Rip Off on 09.20.13 at 1:08 pm

The argument of this post is dumb: So are you going to argue that if rent is the same as a mortgage that you should wait another 10 years to see if the market will tank and you will retire in 30 years or never? What if you are wrong and the housing price keeps going up? What then? Can you afford it then? If you are in Vancouver and it is extremely likely that interest rates will go up and market values will go down, your job is not that steady, and you may not qualify for mortgage renewal then maybe that idea in this post applies. But everywhere? In Calgary everything moves like sows. The real estate market, the mentality of people, the political system, it is all very very slow. Like a freight train of pigs.

With a post like this somebody in Calgary who reads it and actually believes it may be priced out forever of getting a decent place. Seriously. Even if all the houses are $200K above their real value. And yet renting a place is still at least $1300/month(almost the same as a mortgage). Why would you rent long term(over ten years)?

It is easy to post this crap when you are a baby boomer who has a property and you arent struggling due to investments yada yada. But if you are young20s-40’s then its entirely different.

Guess what? Investing in mutual funds, stocks, whatever isnt secure either. The idea to seek security anywhere is dumb. It doesnt exist. Best to allow the insecurity of buying a place founded on facts of what has happened historically in the market plus current work status and projected retirement age.

How much money I wouldve given the landlord if I had listened to the above post: About $18,000. Thats almost $20K to a schmuck who did nothing but buy before Calgary became unaffordable. Why would I give money away?

Ah, the voice of the young. ‘Priced out forever.’ Love it. Classic. — Garth

#141 Donald Trump on 09.20.13 at 1:13 pm

Redux: “Toilets Full To The Brim”

http://calgaryrealestatereview.com/2013/09/16/redux-toilets-full-to-the-brim/

Redux: “Toilets Full To The Brim”

Perhaps you’d rather not be reminded of the post from last year about the Canyon Meadows listing that had the following description:

Property is vacant and now have key with limited access, daytime only due to no electricity & crowded poor conditions of home…Property is very unsanitary, extremely smelly and did have over 23 free flying birds living inside the house = lots of bird droppings etc. No utilities whatsoever, hard to move around inside so only serious buyers please. Absolutely no children allowed inside!! All 3 toilets full to the brim

In case you forgot what it looked like, here’s a little reminder:

Bathroom

Needs a little tidying (Warning! You might not want to enlarge image)

The asking price for the home was $350,000.

Would you be surprised to learn that it ended up selling for $338,000?

The new owners had the home renovated and listed it again in June for $499,900.

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

NOTE: click on link to see photo…ugghhh

But hey..the buyer bought it under list and flipped it.
All is good.

#142 Form Man on 09.20.13 at 1:21 pm

#135 Shawn

I have been involved in both manufactured housing and site-built housing. The advantages of manufactured housing ( climate-controlled workplace etc ) are off set by extra costs for moving the buildings. What also must be kept in mind is the cost development charges on the land and the foundation for the building. These costs are the same for both types of housing, and are more significant than many realize.
In addition, buyers wishes for complex roof lines and such, make factory housing less desirable to the customer.
The pursuit of less expensive construction costs is a worthwhile one, but easier said than done.

#143 Divorce2 on 09.20.13 at 1:30 pm

Should also mention that there can be multiple “matrimonial homes.” Any condo, cottage or house that the family lives in for an appreciable portion of the year will get the same treatment under the law. If one spouse sinks most of their networth into residential real estate, it can become a landmine in divorce proceedings.

#144 Linda Mulligan on 09.20.13 at 1:35 pm

Re: staying in one place – as a child, my family moved a lot – I attended 22 different schools by the time I graduated high school in 1976. In my first 7 years of adult independence I moved 7 times. Then in 1984 my future husband & I bought a house together. We are still in that house 29 years later. Have we looked at other places & thought about moving? Yes we have & every time we decide it is better to stay where we are. Every place we’ve looked at would mean either taking on a mortgage again OR is so much less than what we already have that it isn’t worth the bother. What we have done is renovated our existing home to suit our changing needs over the years. As a result we have what we want & are mortgage free to boot. As for changing jobs, we live in a major Canadian city so have always been able to find work without having to sell/move. The commute might be lengthy depending on just where the employment is but modern times (tele-commute, anyone?) have really opened up options without having to take on the task of selling/moving in order to be where the work is. Nor is it boring – one great thing about a big Canadian city is, you can travel the world without ever leaving home. Just attend some local ethnic festivals, check out various ethnic restaurants, take cooking classes to learn how to make various ethnic dishes etc. My point is, it isn’t staying in one place for decades that is boring, it is not taking the opportunities to try something new that make life boring.

#145 Ralph Cramdown on 09.20.13 at 1:38 pm

Does anyone else think that part of our collective debt problem might be fuelled by more media outlets blaring more national stats at us?

There have to be people with ‘only’ $3k in credit card debt who read stats about average household and consumer debt and think “I’m doing better than average!” Average debt, debt to income and household net worth are easy to calculate, but because of the distributions of wealth and debt, the median household probably has more debt and less wealth than the average. Wasn’t there a time when people didn’t talk about their debts, tried to pay them off quickly, and celebrated when they did?

#146 Pulp Faction on 09.20.13 at 1:48 pm

Alvin wants a guaranteed lifestyle, so he never has to think or worry ever again. Sit in one place, happy with the fact that tomorrow will be exactly the same as today, which is easy to deal with, since today was easy to deal with. No changes, no progress.

On another note, I bought an older car in really good shape. The guy says if I look after it, I should get another 30 years out of it, like he did.

On that promise alone, I paid him 2.5 times his asking price, since it was a 30 year car.

#147 happity on 09.20.13 at 1:54 pm

Yesterday the fed doesn’t taper, and look at the USA stock market today. Psssss nothing.

Imagine if they did taper.

This only shows the USA economic renaissance is dead. Because it continues to need 85 billion every month.

#148 CaptainObvious on 09.20.13 at 1:57 pm

I think I’ve managed to convince my partner to rent for a bit, at least a year, maybe more. Sell the house, rent in a part of town we’d rather be in than our current area. Promising.

#149 bob on 09.20.13 at 1:59 pm

Interesting how Bernanke leaves the post just in time to avoid being put on the hot seat all the while prophesying the U.S. economy is recovering and yet not tapering. Shows that reality is far from what we’re told. Yellin cannot be blamed since she inherited the mess and Bernanke is sipping Pina colada’s in Costa Rica. Didn’t Greenspan leave just in time to avoid the hot seat as he prophesized U.S. real estate is not in a bubble.

#150 Andrew Toronto on 09.20.13 at 2:00 pm

Imagine it. Every morning in the same house. Forty years of Groundhog day. Garth is this where where at about staying in the same house , who cares .. did you ever hear the term The circle of life , our parents stayed at the same house almost forever , who’s to say those times wont come again… plus looks like

canadian ecomony still buzzsing , what was that about a corerction In realesate Garth.. Wrong again I guess …

http://blogs.wsj.com/canadarealtime/2013/07/25/canadian-small-businesses-say-things-are-looking-up/

#151 CaptainObvious on 09.20.13 at 2:07 pm

@CalgaryRipOff:
You’re still giving money to the bank in the form of interest payments when you buy a place. The amount of interest you will pay is heavily dependent on how much debt you assume. At the end of the day outcomes are uncertain, but a couple of things are certain today:
a) interest rates are at generational lows
b) home prices are at generational highs
Thus most will assume generational high amounts of debt/income at rates that must go higher over time. This not a recipe for success.

#152 Form Man on 09.20.13 at 2:26 pm

interesting reading

http://www.bloomberg.com/news/2013-09-19/asset-bubbles-found-by-finnish-economist-inspired-by-grandfather.html

#153 Kilby on 09.20.13 at 2:27 pm

I pity those who keep moving and never establish roots. When you’re in your twenties, okay, you have to chase jobs. If you’re forty and still can’t find a permanent place, there’s something wrong with your life.
********************************************
Good call, I lived and worked in many locations but our two children grew up in one neighbourhood as I did in the fifties, they established friends for life. 22 years in the same house was great, my wife had to move a lot when she was growing up and did not want in for our children. That being said, we have since moved twice and are looking forward to a new home in our next phase of life on Vancouver Island.

#154 TnT on 09.20.13 at 2:40 pm

Ralph Cramdown

Does anyone else think that part of our collective debt problem might be fuelled by more media outlets blaring more national stats at us?

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

Same goes for body weight

Average body weight is more than before therefore people are comfortable with being heavier as advertised.

#155 nancy on 09.20.13 at 2:45 pm

House just sold in Richmond BC in the glorious area of Steveston.
Address is: 3380 Pleasant Street

Price: $737,500 Sept/2013

Purchased for: $790,000 Feb/2012

After commissions, property purchase tax, legal fees:

Estimated Loss: $90,000

IMHO: Price still too high.

#156 eddy on 09.20.13 at 2:46 pm

“Get on the bike, buddy.

Ride.”

Exactly Alvin, take a year off and see the world. But don’t put it on your resume.

Has this video been posted?

THE CRIME OF THE CANADIAN BANKING SYSTEM – Bill Abram

http://www.youtube.com/watch?feature=player_embedded&v=q7HMt5MgsDg

#157 X on 09.20.13 at 2:47 pm

With Wednesdays announcement, it may push F to act further to curb mortgage debt, and limit household debts.

Unfortunately it is too late for most, as the sheep have committed to too much debt.

#158 nancy on 09.20.13 at 2:51 pm

10215 No 4 Road, Richmond, BC

Asking: $948,000
Sold: $836,500 Sept, 2013
Tax Assessed: $903,000

IMHO: Wanted to get out.

#159 nancy on 09.20.13 at 2:56 pm

5851 Forsyth Cr, Richmond, BC (Ham central)

Asking: $938,000
Sold: $860,000 Sept 2013

Tax Assessment: $1,103,700

IMHO: Alvin, keep your panties on. Keep playing Elvis “Only fools rush in”

#160 yes calgary on 09.20.13 at 2:58 pm

#142 Calgary Rip Off

you’re exactly right. Garth lives in a bubble called “Toronto and Vancouver” without any outside basis for reality. A run down 2 bedroom apartment in downtown Calgary is going to cost MINIMUM $1500/month. If you want something without that dead body and hooker smell you’ll have to shell out 2000-2500. That makes a $400,000 condo seem very affordable. Better to buy than to give money to these slumlords.

Everybody I know now close to retirement has made all their money with realestate. They bought houses for $80k that are now worth $400k. They have a couple from moving/renting over the years and now they easily have a million to retire on. I don’t know any average person that got rich due to renting and investing in stocks. Sure you can do that, but in terms of reality and practicality people want stability and real estate offers that. Stock market gambling does not.

In Calgary right now, bottom line, buy. Worse case in Calgary right now is the market will stall and you wont see crazy gains. But if you’re buying a place to live in, not “invest” you’ll be way ahead in 20 years than if you rented and dumped your cash in Ben’s rigged market.

You kids are a riot. Really enjoying this… — Garth

#161 gladiator on 09.20.13 at 3:09 pm

Garth,
I know you don’t like zeroherge, but there is a really good article by Charles-Hugh Smith about bubbles. He writes about the bubble that the Fed is inflating and about asset bubbles, but since bubbles anywhere and in any asset have similarities, the article is worth to read and apply to our own, Canadian, RE bubble:

http://www.zerohedge.com/news/2013-09-20/guest-post-trouble-asset-bubbles-if-you-stop-pumping-they-pop

The main idea: bubbles pop anyways – either because of those who inflated them in the first place and now try to deflate them slowly (ha-ha), or due to external factors.

#162 CantRememberMyName on 09.20.13 at 3:20 pm

On the Rum again so expecting some comments tonight to get deleted. Not “DELETED”. But deleted in the sense I make too much sense.

“Let’s forget that all your friends are slaves to unrepayable debt in a world where rates will only rise in the years ahead while incomes may not.”

Garth’s talking local where we have gone Global. Nothing is for sure Canada remains a “1st World” Country even 10 years from today. We could be the Jane\Finch in the Global sense. Rates will stay where they are if 80% of the fools will collapse if they rise.

GUARANTEED.

I agree stay liquid but too many people here are drinking a different flavored Koolaid.

The Universe gave you a Brain. Learn to use it. The world isn’t today even if the internet says it is. The internet is about 18 years old. Get it? The world will be around 100 or 200 years from now even if you are not. Stop flattering yourselves.

We have a long way to go and people 25 years from now will be laughing at how naïve all you brainers are…

#163 jess on 09.20.13 at 3:37 pm

Sep 19 2013
Statement by CFPB Director Richard Cordray on Chase and JPMorgan Chase Enforcement Action
By Richard Cordray

The Consumer Financial Protection Bureau (CFPB) found that between 2005 and 2012

=

http://www.consumerfinance.gov/hmda/

Now, let’s look at kind of information you can find in the public HMDA data:
First, you can find information about the loan itself. The data include mortgage applications, regardless of whether the application was approved or denied. You can also see the loan amount, and the type of loan, including whether it is a “VA” or “FHA” loan. The data also show if the loan is for buying a home, refinancing an existing mortgage, or for home improvements. If the application was denied, in some cases you can see the reasons why.
Second, the data include demographic information on applicants’ race, ethnicity, and sex. This helps prevent discriminatory lending. It’s important to note that the data do not include direct identifying information, like names or Social Security numbers.
Third, there are data about the lender. You can see the name of the lender and which agency regulates them.
And finally, there’s information about the property itself. You can see the type of property and whether the owner intends to live there. Instead of disclosing the address, lenders disclose the census tract, which is the part of a community where the property is located. Census tracts vary in size, but on average about 4,000 people live in a census tract. This provides enough information about the location to be useful, but still provides protections for individual privacy.
Each September, the previous year’s data are released to the public so that anyone – including consumers, public officials, community groups, researchers, developers, journalists, and the banks themselves – can use the data.

Number of applications & originations by loan purpose
What’s the strength of the mortgage market near you? One important metric is the number of applications and actual mortgage loans (originations) over time.

The agencies found that Chase Bank USA and JPMorgan Chase Bank engaged in unfair billing practices for certain credit monitoring products, which were often offered as ‘add-ons’ to credit card accounts. Put simply, Chase was charging consumers for services that they did not receive.

#164 Canadian Watchdog on 09.20.13 at 4:05 pm

This is how fast you'll lose money in stocks when HFTs take over. Blackberry Intraday

#165 Donald Trump on 09.20.13 at 4:16 pm

I think nancy has a Richmond fetish.

PS: What part of Whalley do you live?

#166 Smoking Man on 09.20.13 at 4:24 pm

My bondometer never fails, anyone other than me making loot on my calls. :)

#167 Toronto_CA on 09.20.13 at 4:27 pm

Ouch for BlackBerry. Timely article Garth. I imagine many folk in Waterloo who specialize in technology may want to put their house on the market and move to where the tech jobs are (not in Waterloo).

I expect a jump in listings in Waterloo.

#168 Ogopogo on 09.20.13 at 4:35 pm

#93 Screwed on 09.20.13 at 1:29 am
Garth, being mostly in cash and holding some metals makes me very nervous since yesterday’s non-taper. XRE looks like a good and solid performer and yield at close to 5% is a no brainer. Any other recos? Time to go back all into paper is unfortunately now.

Why don’t you buy BlackBerry shares? They’re on sale as of 1 hour ago. #sarcasm

If anyone still doubts why Garth advises against investing in stocks, just check out today’s chart: https://www.google.ca/finance?q=TSE%3ABB&ei=brE8UrDONKK5iwL9mwE

#169 There goes Waterloo Real estate! on 09.20.13 at 4:41 pm

Next headline…home prices crash in Waterloo!!

http://www.theglobeandmail.com/report-on-business/trading-in-blackberry-halted/article14440386/

#170 Ralph Cramdown on 09.20.13 at 4:58 pm

#166 Canadian Watchdog — “This is how fast you’ll lose money in stocks when HFTs take over.”

As The Most Interesting Man in the World said, I don’t always speculate on money losing companies that are rapidly circling the drain and likely dependent on the relaxation of government foreign ownership rules just to get an offer, but when I do, capital preservation isn’t my primary consideration.

#171 Ralph Cramdown on 09.20.13 at 5:20 pm

#170 Ogopogo — “If anyone still doubts why Garth advises against investing in stocks, just check out today’s chart”

First, Garth doesn’t advise against investing in stocks. His balanced portfolios have equity funds (which are full of “stocks”) in them. He recommends funds for diversification and because most investors don’t have the time, brains or instincts to do what it takes to beat the broad market.

Second, no investment advice written in the last two hundred years would advise a conservative investor to punt on BBRY given its current situation. That stock has been a speculative crapshoot for two years now, and EVERYBODY knows it. If you want to make a serious argument, talk about something like DCI.T

#172 fixie guys on 09.20.13 at 5:20 pm

#164 CantRememberMyName: “Rates will stay where they are if 80% of the fools will collapse if they rise.

GUARANTEED.”

It sounds like you believe rates are held by a click of heels or wave of wand. It takes money and that can’t be maintained forever. Guaranteed.

#173 Donald Trump on 09.20.13 at 5:36 pm

Re: Pre -Fab homes

It is my humble opinion that the majority of people east of the Rockies have this genetic trait that has a preference for an abode that, …. in whatever manifestation,…. in whole or in part,…. resembles a mobile home.

The rest of us simply have to understand this primal trait , you will find it in Darwin’s writings somewhere.

#174 walltiger on 09.20.13 at 5:46 pm

For starters, nobody except a termite in Leslieville stays in the same house an entire lifetime anymore.

i actually paused for a brief moment, imagining the little termite, and then spilled the coffee again.

how GT can make me laugh everyday, thank you Sir. :)

#175 Form Man on 09.20.13 at 5:57 pm

#173 Shawn

Housing costs are best controlled by design of the home. Complex roof lines, total floor area, granite, hardwood, etc, all combine to drive up costs.

As far as saving money by building yourself, one must consider the following :

roughly speaking 50% of the cost of building is labour. If one provides their own labour, there can be a significant saving. What must be kept in mind however, is lost wages versus saved wages ( i.e. I might be better going to my day job and paying a trained installer to do the work ). Subtrades and suppliers bid against each other every day, keeping costs competitive. In addition, qualified trades people will likely make less mistakes ( damaging less product ) and will provide a warrantee. As a general statement, the builder’s profit comes from expertise. In every case I know of where homeowners were also the general contractor, the final cost was not lower ( if one assigns a true figure to donated labour ), but the quality was inferior, and the warrantee was non-existent.

Our grandparents raised families in homes that were less than half the size of current homes, and were far less luxurious. This resulted in a much more affordable home.

#176 Ogopogo on 09.20.13 at 6:36 pm

#174 Ralph Cramdown on 09.20.13 at 5:20 pm
#170 Ogopogo — “If anyone still doubts why Garth advises against investing in stocks, just check out today’s chart”

First, Garth doesn’t advise against investing in stocks. His balanced portfolios have equity funds (which are full of “stocks”) in them. He recommends funds for diversification and because most investors don’t have the time, brains or instincts to do what it takes to beat the broad market.

Second, no investment advice written in the last two hundred years would advise a conservative investor to punt on BBRY given its current situation. That stock has been a speculative crapshoot for two years now, and EVERYBODY knows it. If you want to make a serious argument, talk about something like DCI.T

An ETF is not the same as a stock. Should I have specified “individual stocks”? I wrote with long-time Garthians in mind, forgetting that not everyone has blog-specific cognition to read between the lines.

#177 Ogopogo on 09.20.13 at 6:39 pm

#174 Ralph Cramdown on 09.20.13 at 5:20 pm

Secondly, your suggestion on DCI.T is specious. As we saw with POT.T, even a blue-chip stock can go tits up at a moment’s notice. Diversification is the key. Hence Garth’s promotion of ETFs for the retail investor with <1M.

#178 Keith in Calgary on 09.20.13 at 6:39 pm

Sitting here at the airport in YVR waiting for my fight back to YYC.

Observations from the last 3 days in “the village on the edge of the rainforest”……..

For what we pay in rent in Calgary ($1,750) we can rent the same sized condo in an identical type of location (central inner city) for roughly the same amount of money. That makes sense…..doesn’t it ?

But, if we owned the place we currently rent in Calgary, we’d have to pay twice as much (or even a little bit more, depending on the building) to buy a home. And that just doesn’t have any basis in a sound footing, when you consider the economic reality of lower Vancouver incomes. You make more money in Calgary…….

This city is soooo screwed.

#179 Canadian Watchdog on 09.20.13 at 6:45 pm

#172 Ralph Cramdown

Are these money losing companies?

Apple Flash Crash: Stock Halted After Trade Causes 9% Plunge

P&G mini flash-crash trades will stand, company says

Symantec shares plunge, traders see mini 'flash crash'

Google Flash Crash

Flash crashes happen everyday. Blue chips, pennies, you name it. You're only reading events reported by MSM, not the hidden ones, like these.

#180 Musty Basement Dweller on 09.20.13 at 6:48 pm

Nancy your observations for what is happening in Richmond with prices is similar (percentage wise) to what has happened over the past year in Victoria, Duncan and Nanaimo. I am basing that comment on real data obtained from friends who have sold recently and the odd honest realtor that I know.

Why haven’t the Real Estate Board stats reflected that? Well my guess is the fox in the henhouse preparing the spreadsheets but there may be some other factors.

#181 johnny d on 09.20.13 at 6:57 pm

#111 Castaway on 09.20.13 at 9:09 am
#25. SASKATOON is different.

Yeah right.
Housing Boom fueled by commodities. Check.
Temp immigration to fill those jobs. Check.
Biting cold winter. Check
Dillusional residents who believe RE will appreciate 7% per year. Check.

————————————————————————————

You forgot the part that the housing boom is fueled by construction jobs from the housing boom itself. It’s self feeding on the way up, and a tumbling house of cards on the way down.

#182 dumbanddumber on 09.20.13 at 7:10 pm

“Garth ..everything would be more credible if you wouldn’t be pushing people toward “liquid wealth”. Let’s not forget that that liquid wealth can evaporate in an instant with all these swings we are seeing these days on the stock market.

Why would you buy stocks? — Garth”

What do you think ETF’s are composed of?

Baskets of securities offering broad diversification and ownership in dozens or hundreds of large-cap companies so investors can mitigate volatility. Why? — Garth

#183 Form Man on 09.20.13 at 7:16 pm

#184 johnny d

You forgot the part that the housing boom is fueled by construction jobs from the housing boom itself. It’s self feeding on the way up, and a tumbling house of cards on the way down

excellent comment. That was exactly the case in Kelowna when it boomed between 2002 and 2008, and subsequently crashed in 2009.

#184 TurnerNation on 09.20.13 at 8:41 pm

Garth’s really showing his age today. With those replies.

Why, anyone who still remembers this incident must be at least 30 years old.

“given the Bobbit thing.”

#185 JimH on 09.20.13 at 9:49 pm

#172 Ralph Cramdown replying to #166 Canadian Watchdog
====================================
You raise a good point, Ralph!

I hold a ‘balanced’ portfolio of bonds, ETFs and stocks. (Balanced in terms of weighting as to asset class and equity class).

Today, as the markets tanked into the close thanks to Republicans in the House of Reps. trying to replay 1930, my portfolio was down $512.50 or 0.32%.

My quarterly dividends would make a doomer/gold-bug weep.

Balanced and diversified and regular monitoring beats CIDs, Savings Bonds, and good old-fashioned bitching every time.

THIS is why I’m bullish on America… and select foreign ETFs.

A message to the doomers, deniers and gold-bugs… WTF is in your wallet tonight compared to yesterday? Sad, isn’t it?

#186 MagnumMtl on 09.21.13 at 4:06 pm

162 – yes Calgary

a good friend of mine moved back to Calgary about 6 years ago after living in Mtl for school. She lived with her parents for two years to save up for a down payment and bought a condo because she thought it would be a great investment!

She now regrets the whole thing. A year or so after moving in she realized that the mortgage and condo fees were eating into her lifestyle & ended up having to rent out one of her rooms to help make ends meet.

Ain’t that the life? Two years living with your parents only to have to live with a complete stranger(s) when you are in your early thirties. No vacations either.

To make matters worse, her building was badly damaged during the floods. Strata fees are going up and property valuations are going down.

Sounds like money well spent to me.

#187 Macho Man Randy Savage on 09.21.13 at 5:12 pm

As I’m searching mls these days as I would like to move closer to work, I have developed a new hobby. Every time I see a double posting, or “phantom house”, I kindly email the real estate agent to inform them of the double posting.

This week alone, for the area I’m looking in, I’ve found two sets of phantoms and let the agents know of their “accidental” double posting. I also included the link to the huff post piece written this week on phantoms.

I like to help realtors when I can. :)

#188 Murray on 09.22.13 at 2:54 pm

I did a comparison between buying and renting over a long period of time. I was able to show average home prices for Ottawa since 1956, and Victoria since 1978.

If you go to the following web sites, it will show without a doubt, that based on a 25% down payment you would be much further ahead in the long run if you buy – even when home prices were over priced. The web site shows the comparison between renting and buying each year and is based on holding onto a property for at least 8 years (I did another table based on 6 years with very similar results).

To me the one caveat would be to have a 25% down payment and make sure the monthly mortgage payments are no more than one third the monthly income. That way you could safely handle potential increased mortgage payments due to increase interest rates, and be sure to come out ahead of renting by a large margin.

I realize that past performance does not guarantee future results, but it’s a pretty good barometer. Also the number of years shown in the table, has gone through other over heated real estate markets in the past, so it should be an excellent method to see what will happen in the future.

The two web sites to check out are:
Ottawa:
http://phpinternet.com/OttawaPrices.html
Victoria
http://phpinternet.com/VictoriaPrices.html

It would be rather simple to do other cities too, as long as I could obtain the historical home prices from that city.