Wasted

kids

“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.”

Hope you caught that piece of a comment here yesterday – angst from a Gen Xer, pissed at me for dissing the notion of young house lust. The logic is classic: (a) If I have to pay rent to live, I might as well pay more and ‘own,’ (b) it doesn’t matter if houses are overvalued because I want one and will live in it forever, besides (c) it’s different here, the economy’s hot and prices will always go up.

In fact, I decided to delete a few posts yesterday, telling me what I could do with my aging, Baby Boomer body openings. This sure reinforced a reluctantly-formed opinion that we’re raising a generation of pedantic Ward & June Cleavers convinced they’re entitled to buy real estate in their twenties and would trade freedom, mobility, independence or choices for a mortgage. They blame others (banks, monetary policy, demographics) for their inability to afford property and seem to place no value on youth. Too bad. You can always acquire stuff. You’ll never buy a day.

Anyway, they’ll learn. One lesson is that Calgary’s no different, subject to the same emotional swings in perception that can turn a local housing market irrational. Like, oh, K-W for example.

It’s hard to overestimate the impact on Kitchener-Waterloo of high tech corporate investment, and BlackBerry in particular. After all, here’s a sleepy secondary centre, non-commuting distance from the GTA with a regional population of about 500,000 scattered over a massive 1,300 square kilometers. Lots of cows, too. And yet the average single-family home sells for $359,291. You can tell from the chart below what people have done to prices over the past decade. That detached home has soared 63% because everyone thought they were special.

KW PRICES

Not far down the 401 is London. That city has 474,786 people in a much tighter space, with an economy now largely based on the MUSH sector (knowledge, health care, government). The average SFH there trades for $262,609. So why do families pay almost 40% more to live in Kitchener-Waterloo? Easy. BlackBerry. Nine thousand good, sexy, well-paying jobs. It’s different there.

Until Friday.

As I’m sure you know, BB stock collapsed by 23% after the company announced it’s laying off 40% of its workforce. Days from now it will announce losses of about $1 billion in the second quarter of the year. The joint is for sale and after these results it might be purchased by Loonies ‘n Toonies or maybe Mac’s Milk.

Spoke CEO Thorsten Heins: “We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability.” Yeah, right. Whatever you say.

BB, of course, is screwed. Does that mean K-W is also a screwee?

Impossible to know, but if the company doesn’t survive, this city has more than a gaping hole in its property tax. BlackBerry (formerly RIM, of course) has been a major contributor to economic growth, human capital, the local payroll, immigration and real estate prices. Just like the oil and gas sector in Calgary, for example. One-horse cities are always at risk. But the people who live there never learn. It’s always different.

Back to my thesis this week that there’s no more Forever House. It’s a myth. A destructive one. When kids are willing to risk all their capital, absorb massive debt, surrender freedom and buy at the highest level or risk ‘being priced out’ – all to ape their parents’ real estate fetish – we need new kids. These ones are defective.

Is there an app for that?

230 comments ↓

#1 jimmy on 09.20.13 at 7:55 pm

Pretty addictive blog
Craving Saturday too

#2 visorman30 on 09.20.13 at 8:03 pm

I went to university there back in the heyday of RIM (early 2000’s) and to think of that many layoffs would definitely have a huge impact on real estate.

The whole area is huge and I wonder if the impact would be bigger in Kitchener/Cambridge areas rather than Waterloo itself. It’s tough to see these layoffs but that is the double edged sword of capitalism.

#3 jimmy on 09.20.13 at 8:04 pm

Where is everybody tonight?
I bet SM is a BB dude.

#4 A Defective on 09.20.13 at 8:04 pm

I’m not raising my kids in an apartment Garth. That ain’t no fetish.

#5 johnnny on 09.20.13 at 8:04 pm

Looking at the photo.
Sad to say,that seems to be the average way of driving.
Sometimes I inspect overhead bridges where we need lane closures and flag people.
I asked the flagging foreperson if they ever got negative reactions from the motoring public.
He answered “all the time.Many profane”.(real answer censored for this family blog).
When ever I cross a major intersection”on foot”,I can’t help but notice the number of drivers looking down into their laps.
And the beat goes on.

#6 Ray Skunk on 09.20.13 at 8:05 pm

K-W is within commuting distance to the GTA. I know several ex-BB employees who were either canned last year or who saw it coming and jumped ship… either to Rogers or Bell (downtown Toronto, Brampton or Mississauga).

They found it difficult to sell up amongst the glut of listings from other BB victims, so they either take the long and annoying GO ride, the leisurely yet expensive VIA ride, the extremely painful Greyhound ride or individually join the 401 parking lot at hwy25 daily.

Not saying anyone in their right mind would WANT to commute to the GTA from K-W, but it is technically possible and some do it.

Then again I know of a guy who commutes from Ingersoll to Richmond Hill daily… and not by air either. Ouch.

#7 Grantmi on 09.20.13 at 8:06 pm

Vancouver’s Record $39 Million Sale to Royal Signals Peak

http://bit.ly/VancouverisFucked

Runnnnn!!

#8 LH on 09.20.13 at 8:06 pm

Forgive me Father,
for I have sinned
and indulged again
in another bidding war
and won in C02

Frankly I don’t think prices are going anywhere in the supply constrained zone south of DuPont, East of Bathurst, and West of Yonge. Detached SFH can still be had for under $350/sq ft (including lower level), still significantly cheaper than new build condos. The spread between the price per sq ft downtown also doesn’t make sense compared with the expensive suburbs (Richmond Hill, Markham come to mind). I expect this spread to explode higher towards 3x-5x as the familiar pattern shown by Manhattan, SW1 London, etc appears here. I am not saying that Toronto will get anywhere Manhattan or London in status, pricing, or desirability, however all signs point to a continued gentrification of the core to the detriment of all else.

LH

#9 John on 09.20.13 at 8:07 pm

How bout Edmonton Garth?. I was hoping you could write a piece about our great city. Calgary this Calgary that, I’m starting to get a complex.

Aren’t you, like, a northern suburb? — Garth

#10 Soylent Green is People on 09.20.13 at 8:09 pm

Yup, that picture is horrible and offensive. Well done.

…………………

If the Liberals or the NDP think that Harper will wait until 2015 to call an election, they need a wake-up call.

The Cons are targeting a “snap” election in either the spring or fall of 2014 before those two party’s can get fully organized.”

http://www.huffingtonpost.ca/social/MyTake?action=comments

#11 Scott in Gibsons on 09.20.13 at 8:11 pm

OK Garth, enough with the RE drivel. I’m dying to hear you eat crow on your US recovery position!

The recovery is ongoing. Keep the crow. — Garth

#12 renters rule on 09.20.13 at 8:11 pm

Forever houses have gone the way of the dodo bird…as they have been preceded by the death of forever jobs.

I currently work as a contractor in the finance back office of a bank. No jobs are safe anymore. None.

#13 Soylent Green is People on 09.20.13 at 8:12 pm

On July 14, 2010, police raided a Tuscany home — on the same street where PM Stephen Harper has his Calgary residence — where they found 848 plants worth about $1 million. On or near Tuscany Hills Way N.W., Calgary, Alberta.

http://www.edmontonsun.com/news/alberta/2010/08/06/14945236.html

…………………………..

Houses in PM Harper’s neighbourhood are selling for $575,000 –

Tuscany Hills Way N.W.

, Calgary, Alberta http://www.rlfoothills.com/10232-TUSCANY-HILLS-CALGARY-AB/C3583902/CREB … #cdnpoli

.

#14 Evangeline on 09.20.13 at 8:14 pm

The RIM/Blackberry story is so sad.

#15 Londoner on 09.20.13 at 8:15 pm

Yay London!

But wait, does the comparison imply that London is appropriately priced?
Would a correction (that eventually gets some MSM attention) affect buyer sentiment in a market like London that isn’t as overvalued?

You’re the best Garth, I love reading the blog.

#16 jimmy on 09.20.13 at 8:15 pm

Drinking at the Bombshelter with all those Waterloosers sure was fun but no comparison to Joe Kools and Ceeps over in London. Go Mustangs!

#17 DaleFromCalgary on 09.20.13 at 8:21 pm

I agree it is foolish for anyone to buy in Calgary who doesn’t have to. If you have a family you may have to because there is a shortage of decent rentals. But Gen Y should not buy anything in Cowtown for at least a decade; lots of one-bedrooms for rent. First it will take a year for the Great Flood effect to fade away. Then the rush-to-buy crowd will find out what I’ve mentioned before. Those of us in the awl biz are not hiring.

We contract out design to Texas or China. The equipment is made in Germany or China. The ripple effect goes down the line. The jobs here are all in construction, stapling together particleboard in Seton or Kincora (the boondock suburbs for those of you who don’t know Calgary). The people buying those shacks are tradesmen, not petro-executives.

#18 Scully on 09.20.13 at 8:22 pm

A big problem with the herd is with interest rates so low they just look at the monthly nut. I can’t tell you how many times I’ve “herd” that! And then I am told it is “forced savings plan.” My rebuttal? Can you guarantee return on investment? I never get a yes on that anymore.

#19 Keith in Calgary on 09.20.13 at 8:31 pm

After 1985 the RE market in Calgary entered a two decade long (that’s 20 years for you young ‘uns) slump of epic proportions……..

The only RE market left for the poaching is the 20 something moron first time buyer who is too stupid to research historical sales data, and make even the feeblest attempt at understanding financial markets…..simply because they were not around the last time the excrement impacted the whirling blades, and they see their parents spreading the lie that RE always goes up, as those parents desperately try to unload their homes to fund their retirements.

#20 TurnerNation on 09.20.13 at 8:32 pm

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#21 blase on 09.20.13 at 8:33 pm

DaleFromCalgary,

Not sure why you keep saying there are a shortage of decent rentals. I just went on kijiji and searched between $1,800-$2,200 and plenty of decent homes in NW and SE came up. Sure, they may not have granite and heated towel racks, but you and I never had those when we were growing up and we turned out o.k.

#22 Paul on 09.20.13 at 8:34 pm

Good to see you piped in on RIM and KW. It’s a sad state of affairs, but I agree that real estate is crazy here. The prices have been driven up ridiculously. I look at some of my co-workers who are spending 500-600K on a house while making little more than the average Canadian take home pay. I just don’t understand it and they are in for a pile of hurt. It’s easy to be rich on paper, but sucks to be poor when no one wants your paper, at least for the price you think it’s worth.

These people buying $600K homes have never seen the devastation interest rates and major layoffs can cause. I remember living through 18% interest rates on my first home. It’s a humbling effect that knocks sense into you and everyone should experience it.

#23 Obvious Truth on 09.20.13 at 8:35 pm

# 8

These are not wars. You got caught up in an auction.

I know what it feels like. Paid way too much for Leaf tickets once. What a let down.

I’m sure the shelter that received the cheque put it to good use.

The war will take place when it has to be listed and the five year is at 9%.

It was on its way Wednesday but the Chairman wasn’t leaving as the hedge funds whipping boy.

I’m hoping for inflation but people buying now should pray for it. It’s the only chance for Canadian financial peace.

#24 T.O. Bubble Boy on 09.20.13 at 8:35 pm

Blackberry is not the end of Waterloo. Thousands of other tech companies are there, many of which are well-funded and steadily growing. And, they now will have access to hundreds of skilled employees looking for jobs (attracting talent is often one of the hardest things for startups to do).

However, many of the former RIM employees with cushy management jobs may not find equivalent positions out there, and that will be a drain on K-W.

#25 mousy on 09.20.13 at 8:37 pm

#4Defective,
My parents raised my sister and I in a one bedroom apartment and we turned out ok. Things did get a little bit tight at the holiday dinners, and no room for pets beyond the budgie that used to swoop through our soup at dinner time. Had to practice the clarinet on the fire escape, but the parents could whistle out the second floor window for us to come home from the beach. As a kid, there wasn’t a single moment when I thought living in an apartment, as opposed to a house, actually sucked.

#26 TheCatFoodLady on 09.20.13 at 8:39 pm

Sadly & in all its painful honesty – we did it to ourselves. Over a period of decades, we normalized high levels of consumer debt, mortgage debt & accepted from our elected politicians & appointed functionaries, staggering levels of government debt. Want slowly trumped need & Want is a greedy child that demands more & more.

Patience & Prudence aren’t just the names of doddering, maiden great aunties who feed us stale candy on rare visits; they’re virtues we’ve swept under carpets – carpets with really, REALLY spendy underlay.

We all want, every last damned one of us. Give me a credit card with a several tens of thousands of dollars limit, one *I* don’t have to pay & watch me & my champagne tastes lay waste to a high send shopping district. My champagne tastes are tethered by a nasty choke chain called a limited, (very limited), budget. Long story there – full of dumb spending decisions made in my younger days but… the world doesn’t give a rat’s ass about my fiscal idiocies.

It’s not just the kids today but their parents. That would be me. And you. And many, (I didn’t say all), boomers who spent like there was no tomorrow & the many who still do. Hell, add their parents too – never have so many seniors retired in debt. We walked ourselves into a credit addiction.

We can end it. It is ENTIRELY up to us – as individuals & voters. Interest rates won’t be going up soon – governments can’t afford that for many reasons that have been cogently explored here & at many other fiscal pundit type sites. So people – start cutting back & pay down what you owe. Stop drowning.

And get off the housing hamster wheel. Home ownership is nice. I’ve owned homes – twice. Loved each one. Bought at the high end of the market & had to sell at the wrong end. Yeah it hurt but stupid SHOULD hurt – how else do you learn? And only a fool doesn’t learn from their own mistakes – especially those repeated once or twice.

If you’re in a housing market that’s REASONABLE & many are – not all Canadians live in big cities with soaring valuations – & you can afford to buy without leaving yourself short on the other important things – bloody well do it if it turns your crank. Wherever you are, whatever you decide – rent or buy – crunch the blasted numbers… ALL of them & be sure your decision makes sense for you.

Don’t waste time blaming the greedy banks, lying politicians, the industrial/medical/financial/whatever complex. None of those forced anyone to sign credit applications or in anyway undertake big debt. We’re adults – right? We make our own decisions as adults, right? And we bear the consequences of our own decisions. As adults.

Here’s a warning for those determined to buy a house in a ‘hot’ market at an outrageous price with minimum down. You might squeak through now but your life isn’t static. You can lose your job, marry. Oops! You didn’t plan on a baby so soon but there you go & damn, was that the furnace dying?

I didn’t end up poor because of bad housing choices – just shitty life choices but the RESULTS could be the same. Imagine if you will – after paying mortgage/rent, utilities & media, (cable/net/phone); you & your spouse have $850/month to live on. That has to cover food, clothing, transportation, grooming, medications… life. It’s doable but it sure as hell isn’t fun. THAT is where our individual stupidities have landed The Main Squeeze & me.

We still manage a decent, respectable life but choices? Those are very, very limited. There’s not a whole lot of room left for “oh shits!”. We have money invested – a nervous place to be these days but it’s long term. We have access to a fair bit of credit BECAUSE we owe nothing.

But I sure hate looking around & seeing so many youngsters up to their eyeballs in debt on top of facing the limitations we do. We HAVE room to scramble if something awful happens – may the Debt Gawds forbid but far too many don’t & I don’t know how they sleep at night.

In the end, Want may be a greedy child but Need is a remorseless bitch.

Nobody can afford to forget that.

#27 Brian Ripley on 09.20.13 at 8:40 pm

Losing a major employer is not the only fundamental risk to mortgage payers. I noticed a small article by the WSJ on a BMO report looking at the reliance on the construction industry in Canada relative to GDP.

It’s at a 30 year high and much higher than the U.S. reliance was at the top of their housing bubble in 2006 (13.4% vs 9.4% of GDP … the U.S. has dropped back to 5.8% but the Canadian economy remains overly dependent on construction; a small shift will affect a lot of employees… everywhere.
Chart: http://www.chpc.biz/2/post/2013/09/construction-reliance.html

#28 Form Man on 09.20.13 at 8:42 pm

huffington post finally picks up on what Garth posted some time ago…….

http://www.huffingtonpost.ca/2013/09/20/mls-phantom-listings-house-prices_n_3957237.html

#29 JuliaS on 09.20.13 at 8:43 pm

A good alternative to owning and renting is called co-op housing. Typically it’s a group of homes sponsored by the government and mortgaged as a complex (not as individual units). These are built under affordable housing programs and come with subsidies for low-income tenants. Even if you’re not qualified for subsidy, you still benefit through the fact that part of operational budget comes as a grant from an external source – govt or CMHC.

Imagine being able to move into someone else’s home more than half way though their mortgage term, only having to pay the remaining amount (which is typically less than the market rent due to subsidy portion), but being able to reap all the benefits of a completely paid off dwelling in few short years?

That’s co-op housing! There are plenty of them in Canada! Do some research. They’re the best thing since TFSA.

Downsides:

– Land is typically leased from the municipality, so if it decides to redevelop the area, it may refuse lease renewal. You’ll have to vacate and won’t be reimbursed, other than given an advance warning (1-5 years in most cases depending on how far ahead the city planning projects).

– Co-op’s are considered non-profit organizations, and keep that status even after the mortgage term is complete. That means the units cannot be sold for profit on the open market. The only time units can be sold, is if the co-op defaults on the mortgage (due to vacancies or maintenance costs) and the CMHC has to take over to reimburse the govt.

– Because of that last item, make sure building condition has been assessed by a qualified engineering firm. Many co-ops are/were cheaply built and may have structural defects, requiring expensive repairs which will be reflected in subsequent rents.

Then again, since you aren’t tied by a conventional mortgage, you can move out any time you want for any reason. Since the co-op’s are mortgaged as multi-apartment buildings to a group of people as oppose to individuals, each person is free of obligation, beyond meeting their monthly payments and keeping the place clean.

#30 not 1st on 09.20.13 at 8:43 pm

This is blackberry’s nortel moment people. Remember all those you got in on the way down $20, then $10 then $5.

#31 Country Girl on 09.20.13 at 8:47 pm

K-W is not a one-horse town. In fact, Kitchener and Waterloo are two separate cities. And, from both cities, Mississauga is much closer than London. Toronto is about the same distance as London. Both VIA and GO run trains daily from Kitchener to Toronto. Many residents commute to GTA (not so many to London).
The Region is home to many successful businesses, Open Text, Desire2Learn and Toyota being examples.
And announced today, Twitter co-founders are bringing their new start-up to KW. Most likely because a lot of strong tech businesses got their start in Waterloo.

K-W will survive, of course. But those RIMers who bought Forever houses there have a heavy lesson ahead. — Garth

#32 jim on 09.20.13 at 8:50 pm

#8

Pray tell, where will the money come from to continue this ‘gentrification’?

Toronto is not NY or London. There are precious few high paying jobs in finance. There are SOME, to be sure. However, most of the rich lawyers and bankers that I know do not live in the city itself, but in the suburbs (e.g., oakville)

I live in Silicon Valley, which has incomes far outpacing those of toronto. There’s serious money here. There are also floods of third worlders. Houses are cheaper. Game, set, match.

#33 eddy on 09.20.13 at 8:54 pm

#23 Obvious Truth on 09.20.13 at 8:35 pm

# 8

These are not wars. You got caught up in an auction.

^^^^^^

It’s not an auction. I wish it was because it would be actually fair. Multiple offers are usually highest, cleanest takes it. The ‘winner’ has no way of knowing how much he overpaid, unless the LA was his agent and tells him. At auction things are openly bid up.

#34 jim on 09.20.13 at 8:54 pm

#24

No one is arguing that BB’s demise is the ‘end’ of waterloo. That’s a straw man.

The point is that there are 9k jobs about to go up in smoke. Many of those jobs are among the better ones in that region. This sustains local businesses, etc etc.

Your ‘thousands’ of startups are going to be hard pressed to absorb those. A look at the KW tech jobs posting reveals some pretty sorry jobs. KW doesn’t tend to pay all that well compared to toronto, where even a dunce IT tech support person can command 100k plus pension in the corrupt and useless public sector.

No, it is not the end of waterloo, but the good times are gone for now. Between RIM and St jacobs, it is going to feel quite different.

#35 bob Rice on 09.20.13 at 8:56 pm

Calgary and K-W are one-horse towns, for sure… Toronto? Nope. Without question, the most diversified economy in the county… What does that suggest?

#36 Tripp on 09.20.13 at 8:57 pm

#23 Obvious Truth

“I’m hoping for inflation but people buying now should pray for it.”

I’m hoping it will never happen, so people buying now will pay for their financial decisions and be poorer. If the inflation happens, we will all pay and we will all be poorer.

I know that life is not necessarily fair, but I have troubles picturing my savings covering for the granite addiction of the financially illiterate crowds that believe debt equals wealth.

#37 Mark on 09.20.13 at 9:00 pm

“Thousands of other tech companies are there”

Not really. Just because every 3rd year student out of UW drafts up a business plan for a one-man company, doesn’t mean that there are a plurality of businesses for ex-RIM employees to join. Most of those businesses are basically nothings. Unemployment amongst Canadian tech grads runs rampant. Some of my peers in engineering haven’t had interviews in years, nevermind job offers. Any startup that can’t find talent must not be trying or isn’t approaching the process in good faith.

#38 Swinging Humanzee on 09.20.13 at 9:00 pm

We’re going for the forever house anyway, Garth – gonna move to the country, buy a smaller place in our 40’s, upsize in our fifties and then move to a nice country acreage in our 60’s. That will be our forever house, until the old folks home, that is, in our 70’s

#39 AK on 09.20.13 at 9:08 pm

#14 Evangeline on 09.20.13 at 8:14 pm
“The RIM/Blackberry story is so sad.”
====================================
Just like Nokia, Motorola and Palm.

Could Apple be next? Let’s wait and see.

#40 Inglorious Investor on 09.20.13 at 9:11 pm

In the past on this blog, I’ve predicted that in the future home ownership rates would drop, especially among the young.

I said that lifestyles will become, by necessity, more mobile, and people will need to be more flexible viz. where they live and work as their jobs and the location of same change often, either with the same employer having many international locations, or different employers in different locals––or as independent operators.

This already appears to be a well developed trend in the United States. However, migration within the US has been hampered in the past few years by the housing crash, which forced many families to stay put because their mortgages were worth more than their homes.

However, in Canada, which seems to mimic the US in so many ways––only retarded––the young have been sold the home ownership meme hook, line and sinker by the RE shills in the mainstream media and [email protected] With still low rates, they are being bamboozled into buying homes with prices at historic highs. They should look at what happened between say 1987 and 1991. I feel sorry for them.

My wife and I bought our home about 16 years ago. It was a very different RE market back then. Even though we have been in the same house all that time, if we were just starting out today I would likely choose to rent rather than buy. IMO it makes more sense today to be liquid, to avoid debt, and to be as mobile as possible. Today, you really need to “go with the flow”, as it were.

Keep in mind, that the costs of home ownership don’t stop with the mortgage and property taxes. Houses are insatiable beasts that require constant feeding and care in the battle against nature and time. And this is expensive. And the costs just get higher and higher as the home ages. Kind of like people and health care.

So for any house horny younglings out there who are hot to buy, I say, take a step back, evaluate your priorities, look seriously at the costs, think about what your life might be like in 5 or 10 years and make sure you can handle a rough financial patch. Keep a cushion of cash above and beyond what you plan to sock away for retirement. If you can’t pony up several thousand, or tens of thousands instantly to fix that leaky basement or get that new roof or whatever, think again about buying. And don’t buy any place that smells of mould. Big problem these days, especially in the downtown. And condos? Don’t bother. You’ll regret that for sure.

#41 Mathieu on 09.20.13 at 9:13 pm

about the genX…this article explains it all
The ”i am unusually wonderful” mentality won’t help the canadian real estate gong show.
http://m.huffpost.com/us/entry/3930620

#42 Nemesis on 09.20.13 at 9:14 pm

@grantmi/#7

Hidden in that excellent BloombergLink… A YVR RE Quote’OTheDay!…

“There’s more money around today than there’s ever been in the high-end market. And where’s it coming in from? The Middle East, China, Asia.” – Malcolm Hasman

According to the article, YTD Malcolm has moved almost a quarter of a billion worth of YVR UltraPrime…

So I should imagine he does know what he’s talking about.

#43 Goody Niosi on 09.20.13 at 9:18 pm

I don’t get it – why is raising kids in an apartment so evil? An apartment is not a slum, a tent, tepee or even a yurt. And come to think of it, raising kids in a yurt is probably cool. I’d rather raise a kid in an apartment than a house I can’t afford – or maybe I can if I don’t feed the kids anything except Kraft dinner.

#44 Fred on 09.20.13 at 9:21 pm

Good Post. If you are driving down the 401 looking for better house prices, continue on down to Windsor and I bet a SFH there is 40% less than London.

#45 not 1st on 09.20.13 at 9:25 pm

Canada had basically one tech company making an over glorified toy for adults and now its gonzo. Oh well, there’s always the wood to hew and water to carry.

#46 scibadubadebumbado on 09.20.13 at 9:27 pm

The way I see it.
Garth has single handedly delayed our real estate correction by at least 2 years by tempering the market with his wisdom.
I figure you only need a 5 or 10% excess of buyers to make a market go crazy.
Garth has taken out at least half of those with this blog alone .
Not only the readers of this blog are affected but all the people who hear comments from the Blogdogs. It has a sobering effect on people about to sign for a $500,000.00 mortgage.
The Greater Fool Blog should be considered a real market force and accounted for.

#47 Bob on 09.20.13 at 9:27 pm

#7 Grantmi

I read the article that you attached the link for. Interesting!

But the most interesting statement of the story was this:

“Vancouver is the most expensive city to buy a home nation-wide, with an average cost of about C$780,500, higher than in London and New York. The equivalent in Toronto is C$523,147, according to the Canadian Real Estate Association. That compares with New York’s $779,000 average in the second quarter and 438,000 pounds ($702,289) in London in July.”

Holy Shat.

#48 Country Girl on 09.20.13 at 9:29 pm

#32
K-W will survive, of course. But those RIMers who bought Forever houses there have a heavy lesson ahead. — Garth

Yes, unfortunately, a lot of very good farmland has been turned into “forever” homes during the past few years. Now, some of those homes may have sorry owners. And the construction madness may be halted.

#49 Vangrrl on 09.20.13 at 9:31 pm

The youngest gen Xers are 31 or so, the oldest late 40s, no? So it’s gen Y who are in their 20s, wanting to own real estate straight out of schoool, and maybe the late Xers.

#50 William Bell on 09.20.13 at 9:34 pm

@#44 Goody:

Because some greater fools believe their kids may not be able to breath properly without 2000sqft of living space, or incorrectly decorated baby rooms would affect their growth, or without an ensuite bathrooms it will greatly reduce the children’s healthy lifestyle.

#51 Somegirl on 09.20.13 at 9:44 pm

Long time since I have posted…and I still have not bought (and yes, we have the means to do so) For those of us who continue to think Canadian banks are so *stable*, I have a scenario for you…20-something year old brother and sister-in-law just bought in Calgary at $350K with minimum down. He makes $26 bucks and hour, she makes less than $20 per hour. His entire financial plan is to work over-time to pay for it once she pops out 3 kids. What is wrong with this scenario? Why aren’t banks scrutinizing young people? And who the hell gives mortgages out to someone making $26 bucks an hour??

#52 T.O. Bubble Boy on 09.20.13 at 9:49 pm

@ #40 AK on 09.20.13 at 9:08 pm
#14 Evangeline on 09.20.13 at 8:14 pm
“The RIM/Blackberry story is so sad.”
====================================
Just like Nokia, Motorola and Palm.

Could Apple be next? Let’s wait and see.
———————–

We can wait and see, but it is guaranteed. Apple is sooooo over. No consumer device maker has ever stayed on top beyond a few key products.

You been to a Sony store lately?
(neither has anyone else)

You still playing Farmville?

Using an IBM-built PC?

Blue Rays?

DVDs?

CDs?

Laserdiscs?

VHS?

Walkman?

8-Track?

#53 Hh on 09.20.13 at 10:05 pm

#52 Somegirl
That is $90k a year in combined family income. How could a bank turn that down?

#54 gladiator on 09.20.13 at 10:09 pm

RE is a marginal market. One fire-sale in a neighborhood will affect the “value” of all the houses around it. Given that a lot of well-paying jobs will be gone, expect quite a number of fire-sales there. Even if 5% of people hurt, through RE, this more or less will affect the other 95%. This is the problem here. The usual level of demand will not be able to absorb the over-supply of houses, so it’s quite probable that prices will go down.

#55 Smokingg Man on 09.20.13 at 10:12 pm

The title of today’s rant is teh reason I haven posted tonight.

#56 Retired Boomer - WI on 09.20.13 at 10:13 pm

Sorry Garth-

No app for “defective kids.” None for defective Bankers either. Even our great Bearded One who back-peddled on cutting QE.

5 years of “training wheels” on the US economy, trying desperately to re-inflate the economy, rather than build somethings.

This old geezer is peeved! Economy growing, COLA’s for geezers, but no raises in minimum wages. Housing is affordable now, not super cheap, not overly extended, just about right. Borrowed money should be at market prices, so let the dam market set the prices based upon the risk of the borrower.

Would I lend the U.S. money in a QE environment? HELL NO. Would I buy their Bonds in a free market? maybe

If I were 20 something, Canadian, would I consider buying Real Estate in the property bubble?
NO fundamentals won’t support it, just the Mentals seem to.
Come back in a year

#57 JimH on 09.20.13 at 10:19 pm

#11 Scott in Gibsons
“OK Garth, enough with the RE drivel. I’m dying to hear you eat crow on your US recovery position!

The recovery is ongoing. Keep the crow. — Garth
=====================================
Hey, Scott!
For the benefit of us soooooooooo terribly unfortunate not to live in the “Greatest Place on Earth”…

Please enlighten the rest of us poor ignorant as to exactly how you have profited from this doomer viewpoint?

I take it that you have, in your infinite wisdom, shorted the S&P since 2009? Kept on buying gold for the last 2 years?

What? you mean, you don’t have the huevos, cojones, testículos, pelotas, bolas to take the plunge?

Talk is cheap, and about as valuable as a pinch of dried British Colombian raccoon poop! I’m really growing tired of you asshats!

I was a way too un-bearish on America in the fall of 2008, and a little too slow to catch the bottom in March of 2009, but after that brief repose, I can honestly say that careful and nimble trading coupled with diversification and frequent re-balancing has enabled me to reap where (God knows) I have never sown.

So, what has your negativity towards the USA recovery over the last 4+ years actually put into your wallet? (REAL $$$$…. NOT just your ‘on paper’ returns, fool!)

Now, more than ever, ‘enquiring minds’ want to know! Give us your sage advice as to how we can profit from your experience and wisdom?

If you are smart enough to figure out a way, I’ll gladly send you my record over the past 4 years in exchange for yours!!!

#58 Wise guy on 09.20.13 at 10:21 pm

Call me what you want, but yes, I am raising my baby in an apartment (middle floor) in a house in a very desirable street. I pay $1100/month in Toronto and the house I live in is worth over $1 million. That isn’t saying too much in terms of Toronto prices, but why buy in this kind of market.

I make just over $80,000/year and my wife is on maternity and she will not be going back to work….I’d rather her stay at home and raise our child than paying out $1800/month in daycare, which is what it costs in Toronto.

We have over $100,000 saved, but that is not nearly enough and we are patient. Our baby doesn’t know the difference between a house and a crib. We save money every month and by paying what we are for rent right now, I can assure you, we are very comfortable!

Garth, I wish there was a way that you could upload pictures, because I could show my view from our home…

Our friends are all buying homes or upsizing from their condos to houses as we speak. In a way, I’m hoping that our housing market corrects, just to prove a point to them, because these people have opinions…constantly saying we are throwing our money away renting??

#59 Smoking Man on 09.20.13 at 10:32 pm

Number 3 son with his new found wealth selling my amazing productivity software , just last week was going to go in with his buddy a virgin realtard, into a town house in waterloo, by the school. Rent it out.

I said, grasshopper, focus on the business, take it national, then south. Plus rims going down, lots of supply will bring down prices.

He replied, then short rim dad. What 24 year old knows what a short is. Ha

I said I’m going too, but he’s had me to busy being his software bitch, never got around to it.

Anyway, he’s on the right track, and will be paying garth a visit soon, I advised him not to go with me. To risky.

After all, thunder storms and boating are fun for me, but not with my kids on board.

#60 Obvious Truth on 09.20.13 at 10:33 pm

#37 Tripp

Canadian inflation was 1.1. (Rate cut?) US barely higher and blamed on low energy costs. You heard it right.

Sorry bud. Western debts can’t be paid back. Especially all the layers of debt. Without inflation a large proportion of nations are bankrupt. I’m sure you know that. Personally it doesn’t matter to me but I don’t want to see society fall apart. Kids in grade school who will suffer didn’t create the mess.

Despite the Bullard headline today his major point was that low inflation was giving the fed cover. The rest was to keep markets honest an let heggies blow out of stuff they didn’t think they’d own. XLU and the ten year look like commodity charts.

Writing is on the wall. Nobody wants a world that looks like Greece or Spain.

The highly leveraged folks will still get crushed and ensuing recession will hurt too. Calgary may be saved.

#61 AK on 09.20.13 at 10:42 pm

#11 Scott in Gibsons on 09.20.13 at 8:11 pm
“OK Garth, enough with the RE drivel. I’m dying to hear you eat crow on your US recovery position!”
====================================
WTF have you been living? The Dow and S&P 500 just set new highs.

Next time you look up, the The S&P 500 will be @ 2,000. Duhh….

#62 Alberta Guy on 09.20.13 at 10:47 pm

#52 Somegirl – combined they earn over 90k per year and they are buying just over 3.5 x family income…doesn’t seem too unreasonable.

#63 Bob Rice on 09.20.13 at 10:52 pm

So lets talk about interest rates since that discussion seems to have disappeared. A few weeks ago, talk about rising rates was all the rage on this blog. Garth pointed out they were going up, up, up… Now that the Feds have backed off on tapering, what will happen to bond yields? Wasn’t the rise in rates over the past few months predicated on the anticipation of tapering on QE?

So folks, where will rates head? Seems like no more hikes for now… or will this change again in the new year?

#64 omg on 09.20.13 at 11:00 pm

#11 Scott in Gibsons, #58 Jim H

1) Jim H – the west coast is not the greatest place in the world to live just the best in Canada ;) – we just got to learn to live with damp-wool smelling tree huggers

2) Scotts comments about the US economy being on the outs – ALWAYS, ALWAYS, ALWAYS the US economy surprises. If you look at history, even in much more dire circumstances the US has recovered and thrived and made more people rich in the US and other countries by doing so. ECONOMISTS ALWAYS miss the turning point, but the market alway hits it – its been hitting it now for 3 years. Americans and American corporations are amazing at reinventing themselves – don’t bet against them.

The S&P is still on sale at 1700 because of expectations for only modest US growth. Load-up while its still cheap – just think where it will be after a couple of years of 3-4% GDP growth.

#65 FutureExpatriate on 09.20.13 at 11:02 pm

#4 If you buy, you’re not raising your kids in anything you “own” either; you’re renting it from a bank and probably quite stupidly putting money into THEIR property. While the value goes steadily down.

Unless you’re buying cash, and if you were, you wouldn’t be trolling here.

#66 MarcFromOttawa on 09.20.13 at 11:27 pm

DELETED

#67 Jesse Ventura Jr. on 09.20.13 at 11:32 pm

Mac’s Milk? O-M-G. To even suggest that is so f##king insulting….that it actually became hilarious!

#68 Smoking Man on 09.20.13 at 11:38 pm

DELETED

#69 Observer on 09.20.13 at 11:42 pm

Is there an app for that?

Just installed iOS7 and your site’s looking good on the new Safari! Woo Hoo!

#70 Smoking Man on 09.20.13 at 11:45 pm

Do any of you know who lead belly was.

The father of music as we know it, copied by lead zeppelin, beatles, jim Morrison, kurk cobain,

Pink Anderson, and Floyd Council,

It all stated with lead belly.

Know one knows…

#71 McExpat on 09.20.13 at 11:52 pm

There are no decent rentals in Calgary….ummm not at all true. Just another scare tactic to make people jump on the RE bandwagon. We rent and don’t plan on buying anytime soon. Seven figures in liquid assets doing a lot more for us than being plunged into risk-laden and soon to be falling asset of real estate. Over and over I am starting to hear that people are having “cash flow” problems whilst sitting inside 4000 square foot mansions kitted out in Crate & Barrel. Can you say house poor? And rates haven’t even normalized. Until a major shift in fundamentals, we will enjoy a few vacations a year a savings rate of 20% and no worries about the future. But everyone thinks you are poor when you rent…. ahem

#72 Socius on 09.21.13 at 12:01 am

I work in oil and gas in Calgary and layoffs are coming. Talisman and Penn West have already done it and Encana will be next – somewhere in the order of 10 to 20% of staff, likely within a month (when is that Q3 conference call again?). We’ll see if that wakes people up a bit.

#73 Nosty Spaced Out Somewhere on 09.21.13 at 12:05 am

#60 Smoking Man — “What 24 year old knows what a short is. Ha”

Similar to Richard Branson — millionaire at 16, broke at 18 and millionaire at 20. Started Virgin Records and was the only record producer to give Mike Oldfield a chance with Tubular Bells. No one else would look at him, but look at them now!

Shine on You Crazy Diamond Syd making a comeback? He’s a little dead right now! Speaking of age, it really is just a bunch of numbers!

You mentioned helping homeless youth out. Check out this dude — Buffett For Warren Buffet admirers, a story with a twist, ‘tho he plays a small role.

Guns don’t kill people, statins and SSRI’s cause people to become mentally unstable and shoot others. Ban drugs!

Geoengineering One and Geoengineering Two. Has your weather been de-geoengineered today?

Oct. 11 – 13 Trucker strike nationwide.

#74 HD on 09.21.13 at 12:05 am

@ #59 Wise guy on 09.20.13 at 10:21 pm

Well done.

Best,

HD

#75 tobias remppel on 09.21.13 at 12:33 am

hahahahha, no app, but I’ll get busy with making better ones….

#76 PowerChord on 09.21.13 at 12:44 am

#15 Londoner – IIRC the average price of a SFH in London has doubled in about the last dozen years. If you consider the historical average annual increase is about 3% a year. .. well there’s a substantial overvaluation in the London market too. The average wage in London ccertainly did not double in the laast dozen years!

#77 willworkforpickles on 09.21.13 at 1:11 am

Dam….and if only i could figure out how to move that brownstone mansion from Detroit to Rosedale.

#78 JimH on 09.21.13 at 1:12 am

#65 omg
Thank you. Excellent advice.

#79 Another Vancity Renter on 09.21.13 at 1:13 am

Interesting to read that last night’s post brought on the vitriol. I guess a lot of people out there are frustrated and Garth volunteers himself as an easy target night after night. I would be frustrated too if I were house horny in this market.

It was the closing part of last night’s post that I thought was great – another well-phrased reminder that it’s about freedom, not stuff. Expressing your freedom brings on that ear-to-ear grin, whereas getting up to your ears in debt brings about endless justifying and rationalizing to convince yourself and others that it’s the right thing to do. People who try to be rational all the time AND babble on about it are sooo boring. This doesn’t mean we have to be wild and reckless to be fun, but I agree with Garth that a nice ride on that bike (or whatever works for you) will do a lot to clear the head and bring on that grin.

#80 JimH on 09.21.13 at 1:19 am

#14 Evangeline
“The RIM/Blackberry story is so sad.”
===========================
Why? Was RIM/Blackberry a product of intelligent design?

#81 Bowlshit on 09.21.13 at 1:25 am

If Jim Balsillie wasn’t too busy buying a hockey team with his “I am too big to fail” attitude. RIM should still be thriving. Ironically, people are too busy buying houses with their “real estate always go up” attitude without looking around to see all the signs pointing toward a crash-maggedon.

#82 Cici on 09.21.13 at 1:27 am

#1 Jimmy

There are no blogs on Saturdays. It’s Garth’s only day off. Sheesh, let’s not promote slave labour here!

#83 takla on 09.21.13 at 1:31 am

flash forward a decade and im seeing the potential for alot of credit challenged 35-45 yr old consumers who over bought and had their ass’s kicked by over priced house lust.In their prime earning years spent trying to dig themselves out of the debt spiral and houseing deflation….I guess this recession \depression will just have to last a while longer

#84 Donald Trump on 09.21.13 at 1:32 am

#60 Smoking Man on 09.20.13 at 10:32 pm

Number 3 son with his new found wealth selling my amazing productivity software

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

Slave powered abacus is soooo Renaissance

#85 JimH on 09.21.13 at 1:56 am

#62 AK
re: #11 Scott in Gibsons
“OK Garth, enough with the RE drivel. I’m dying to hear you eat crow on your US recovery position!” &etc.
====================================
AK….
We really shouldn’t be too hard on the guy. As is well known among all inhabitants of this continent, “Lotus Land” has a tendency to soften the brain and instill a nonsensical belief they are much better off than the ‘great unwashed’ of those they foolishly believe to be the inhabitants relatively harsher climes.

At the moment, blessed Gibsons is shivering (while pretending to enjoy) 12C degrees in rain showers… pretty much the norm… as the Good Lord intended… this being a sliver of “The Greatest Place on Earth”.

Nevertheless, these poor souls endure year after year of this shingle-rotting, mildew-enticing, gonad-shriveling, mold-promoting climate. Why? Who knows?

Their parents are wise enough to inundate Phoenix-Mesa and Palm Springs ad infinitum for 2/3 of the year, much to the exasperation of the sun-tanned locals, as a test of the Arizonians and Californians long vaunted ability to tolerate even the most loud-mouthed, arrogant and obnoxious of ‘guests’.

Yes, pity poor Scott in Gibsons; sentenced to a self-imposed life-sentence of clouds, rain, mold and mildew… all the while pretending that this is the heartland of the “Sunshine Coast”!

Is it any wonder that the real estate grifters and shysters have free rein with these yokels?

#86 Debtfree on 09.21.13 at 1:56 am

Yes those genxers . Growing up latch key , divorce , economic nomads , 1999, 08. How could they possibly fall for a story about stability ?

#87 broadway skytrain on 09.21.13 at 2:02 am

Joe Kools and Ceeps over in London. Go Mustangs!
—————————

wow, haven;t heard those names since the 80’s , good times! i guess time is frozen in london, hard to believe those places are still there.

#88 Devore on 09.21.13 at 3:41 am

#63 Alberta Guy

Combined they will make less than $60k once they get to what couples do: having kids, while their expenses skyrocket. oh, that’s right, the breadwinner plans to kill himself working overtime (which he might be lucky to get in the first place). Or, they will put their life plans on hold, in service to their mortgage. But wait, I thought only renters put their lives on hold, while house owners were living out their dreams of freedom, painting the walls purple and putting holes in walls.

#89 Devore on 09.21.13 at 3:50 am

#65 omg

Lots of us getting pretty tired of repeating the same thing over and over, while doomers keep latching onto the latest buzz like yappy dogs chasing passing cars. No recovery has ever gone in a straight line. The global economy and geopolitical climate will always deliver surprises. Tons of indicators have bottomed and are improving. Overall, things are getting better every month. No, still no ponies in every backyard, sorry. They may very well not boom for another decade, but what is a boom but a setup for another bust?

You can choose to ignore reality and hide in basement re-arranging your stack of gold, which is heading below $1300 again. Cost-averaging down, is that what they call it? It might be worth something some day. Meanwhile, lots of money to be made investing smartly in the productive economy, which is still producing, or investing in yourself and your business, which is the only true and honest path to wealth.

#90 Tony on 09.21.13 at 3:58 am

I guess the Germans bid up the price of housing like the way they bid up the DAX index back home to 4 times its true fair market value. I guess that’s what you would call a house of cards or an accident just waiting to happen.

#91 Tony on 09.21.13 at 4:06 am

Re: #65 omg on 09.20.13 at 11:00 pm

Dream on… in the near future instead of seeing Mexicans trying to illegally cross the border to live in America you’ll be seeing Americans illegally crossing the border to permanently live in Mexico where the standard of living will be higher.

#92 Jay on 09.21.13 at 5:00 am

I grew up in a paper town in northwestern Ontario. My dad grew up in a mining town in the 60s.

The forever house is a lie. Anyone telling you different hasn’t lived through the collapse of an industry.

By the way, how’s keystone doing?

#93 William on 09.21.13 at 6:35 am

In my late 30’s and have owned once. Got wrapped up with a woman with “House” eyes. Now. Out. Her and the House. Flush with Cash. (don’t let them fool ya..I didn’t get it “ALL” back..you know..what you put into the house and marriage)

Point is this. I rent. The above mess was 4 years ago..I have rented ever since. Re-married and rent near the core of the city.
Less than $1000 rent for two Bedroom.
Remain a one car family. *wife walks to work

I POUND cash into the bank every month. We combine gross 135k.

Do what we want WHEN we want (no kids)

YET..YET Garth..the hitch…the RUB..

All of our friends (exception of one couple)… LOOK DOWN ON US FOR NOT OWNING…

They don’t say it to you directly..just more like this..
“Ohh.. Will and Lindsay they live in like “HintonBurg” but..ya..like nice place..beautiful..but they don’t OWN it..”

We don’t. Garth..I bite my tongue…cause inside..
“have fun Miss Consumer Fetish..buy your husband out of happiness and future..1600 A month mortgage…6400 a year property tax..marble this..maxed out life..&^%$$…TWO CARS” etc etc

I drink beers with these husbands..they are miserable..

At 38..I have no “yard work” and can walk to “cultural events” in the city and have money to spend…

I may not own a house until I am 50 plus. Probably in the woods…far from the crash of Urban Suburb Walmart fetishism

#94 Stickler on 09.21.13 at 7:14 am

@ #51 William Bell on 09.20.13 at 9:34 pm

@#44 Goody:

Because some greater fools believe their kids may not be able to breath properly without 2000sqft of living space, or incorrectly decorated baby rooms would affect their growth, or without an ensuite bathrooms it will greatly reduce the children’s healthy lifestyle.

—-

HA! good one.

#95 Stickler on 09.21.13 at 7:15 am

@ #4 A Defective on 09.20.13 at 8:04 pm

I’m not raising my kids in an apartment Garth. That ain’t no fetish.

——–
You can rent a house.

#96 Stickler on 09.21.13 at 7:29 am

@ #65 omg on 09.20.13 at 11:00 pm

The S&P is still on sale at 1700 because of expectations for only modest US growth. Load-up while its still cheap – just think where it will be after a couple of years of 3-4% GDP growth.

——–
A rational counterpoint…Many say the S&P 500 is fairly/fully and perhaps overvalued. FWD earnings expectations are continually being revised downward, as are most countries GDP growth.

#97 T.O. Bubble Boy on 09.21.13 at 8:40 am

@ #88 broadway skytrain on 09.21.13 at 2:02 am
Joe Kools and Ceeps over in London. Go Mustangs!
—————————

wow, haven;t heard those names since the 80′s , good times! i guess time is frozen in london, hard to believe those places are still there.
——————

The Ceeps/CPR Hotel has been there since 1890!!!
(not exactly some 80’s fad)

Now, Joe Kool’s on the other hand… The “official headquarters of the 1984 world champion Detroit Tigers” is just a tad dated.

#98 Evangeline on 09.21.13 at 9:01 am

#81 “Why? Was RIM/Blackberry a product of intelligent design?”

because a great Canadian success story faded so quickly and because that failure has and is hurting many people and a community.

#99 Musty Basement Dweller on 09.21.13 at 9:06 am

#80 Another Vancity Renter on 09.21.13
at 1:13 am
≠==============
Well said. I couldn’t agree more with all of your comment.

#100 Ralph Cramdown on 09.21.13 at 9:19 am

#97 Stickler — “A rational counterpoint…Many say the S&P 500 is fairly/fully and perhaps overvalued. FWD earnings expectations are continually being revised downward, as are most countries GDP growth.”

I think that’s normal, isn’t it? Analysts always have many more buy and ‘hold’ recommendations than sells. How do you justify a buy? Posit that earnings two years are going to be 20% higher than today. But you don’t want your estimates for this quarter’s earnings to be off by 20% … too many of those and you’re fired. So in a normal market, analysts are probably continually revising their forward earnings estimates down as the future approaches.

Take it for what it’s worth, as this is a theory that I just cooked up in response to your post. Ed Yardeni does great charts of indexes and P/Es vs. estimates:
http://www.yardeni.com/pub/PEACOCKFEVAL.pdf‎

#101 Stevefromottawa on 09.21.13 at 9:37 am

This is not rim’s Nortel moment. Both Nortel and rim suffers from “we are kings” thinking, rim with mobile email, and Nortel with telephone switches. Both failed to see the changed cause by the Internet. Nortel fall was dramatic due to a few bad people, rim will spiral downwards for a quite a long time.

Owning a house makes moving for new oppertunities expensive, so you stay. Before long you live a ghost town, your skills are not up market expectations, and life sucks. Be humble, be hungry, be opportunities, and have enough investment to be not desperate. I’ve seen desperation, it is not nice to look at.

#102 Ballingsford on 09.21.13 at 9:48 am

Photo:
That child should be wearing a helmut.

Probably belongs to a house horny Gen X’er or a milennial.

#103 CrowdedElevatorfartz on 09.21.13 at 9:57 am

@#53 TO Bubble Boy

Good one.

#104 CrowdedElevatorfartz on 09.21.13 at 10:12 am

@#74 Nosty

Bless you Nosty, this comment section isnt the same without the crazy links….. :)

#105 jaguar on 09.21.13 at 10:14 am

‘Is there an app for that’? LOVE that! The funniest part is those that would ask such a question don’t get the joke! (cause it’s on them).
It is sad about Blackberry. Blackberry, Nortel, the Avro Arrow….why do great Canadian ideas always seem to crash and burn after spectacular takeoffs..
Garth, what do you think about the view of people like Peter Schiff with respect to the US economy. Everyone expected a tapering of the QE program and he makes some compelling arguments….(?)

#106 CrowdedElevatorfartz on 09.21.13 at 10:14 am

@#94 William.
Total agreement.
Well done.

#107 Musty Basement Dweller on 09.21.13 at 10:22 am

I guess the RIM failure will be a good case study for business schools for years to come.

Very sad. I was an extremely loyal BlackBerry user from the start but had to bail on them this spring. I wanted them to succeed big time as a home grown Canadian company that

They totally missed the boat on the importance of apps. Loyalty only goes so far when you realize you have a little email brick in your hand that only does a fraction of the cool and very useful things that your buddies phone does.

#108 The Man From Nantucket on 09.21.13 at 10:49 am

Blackberry’s latest, the 10 series are a great try, but delivery is about 1.5 years late…….Stick a fork in ’em.

I’m using the Q10 as a business machine and I’m happier than I’d be with a no Jobs Apple and all but the sexiest droids.

That said, I cannot see these guys surviving on their own in the hardware business. Can’t compete on cost or cachet. At best, they may survive as a software option on someone else’s hardware.

Damned shame. Shoulda been quicker to respond to the touchscreen “fad”, and should have realized that apps were the ticket. They kept shooting themselves in the foot with too many models with too many screen aspect ratios and making things too painful for developers.

#109 andrew toronto on 09.21.13 at 11:00 am

People are not forced to sell, they are staying with their price
check mls regularly prices not moving ..

only a crash can cause a corerction..

Is F that stupid not to realize that , these measures his taking at pointless …

up up we go again with housing valuations and more debit ..

what a country .. wasted is right !!!

http://business.financialpost.com/2013/01/12/stubborn-sellers-killing-canada-real-estate-crash/

#110 Old Man on 09.21.13 at 11:24 am

#98 – T.O. Bubble Boy : The year was 1962 and went to my first football game at the Western stadium to see the Mustangs in action; the older girls were juicy. The alumni sat across the field, and the students sat on the other side. The university students broke out more booze than any nightclub, and oh it was party time. I just knew that university was for me in the future.

#111 Bob Rice on 09.21.13 at 11:29 am

The longer I read this blog, the more I realize how imbalanced many of the views are here.. I’ve always preferred balance; whether we’re talking politics, money, life… some of you sound like the counterparts of the horny house folks who are adamant that houses are the best investment asset.

There are LOTS of people who do not need to be as “mobile” and illiquid as some of you seem to insist on being. My wife and I (extremely happily married) are renting b/c I too feel a correction is looming. We sold and couldn’t find what we wanted for the price we wanted, so we figured we’d rent for now. But our intention is to find and buy a “forever home” (at the right price, not these stupid prices we see today) even though many of you scoff at the notion. Many of you seem to believe the sky is falling and that there is a very good chance you’ll need to pick up and move 5000 km away to chase some job in some far away remote city b/c it’s a certainty that your employment status is uncertain! My wife and I are lucky b/c we work in a very stable, decent paying line of work – we are teachers (yes, come out and attack us as lazy, unionized employees), and so we aren’t going anywhere. Our parents are getting up there in age, my brother in close by with his family, and so is the wife’s family… we fully intend to remain in the same neighbourhood b/c:

a) we love our families and cherish and see value in being close by
b) there is economic value in having family close by – we have baby sitters nearby that we can trust who won’t charge us for taking care of the children they love as much as we do
c) we love the stability and connectedness that comes with living in the same area over an extended, indefinite time-frame… neighbours, familiarity with community services..etc..

Some of you make it sound like living in the same house for a long time is a suffocating trap. Perhaps you didn’t have this as a child so it’s a foreign concept.

We live in the GTA and houses are stupid expensive, so we will take the “chance” and presume they won’t go up much or at all and hopefully dip (even 5% would be nice) over the next year or so and take our time to find a good value that we can see staying in for a LONG time. That to us makes a lot of sound economic sense.

Renting over a long period of time, on the other hand, has its own uncertainties and potential pitfalls – what if the landlord wants to sell the unit? Move in himself? Kick you out to allow a relative to live there? On and on… happens all the time. My cousin owns a 12-unit apartment complex in the city and has asked one of their tenants to leave b/c they will be moving there themselves.. who wants that uncertainty when you have kids?

We aren’t going anywhere in terms of our employment positions, so why would we want to live like nomads?

Believe me, there are MANY people like us, and not just teachers (300,000 by the way). People who own family businesses (countless), retired folks who love where they live, and on and on.. millions of people in Ontario have not the need nor desire to live like nomads.

If that’s your bailiwick, cheers to you – it ain’t ours…

Gonna give this blog a break for now.. getting tired of the same negative, sky-is-falling attitude.

#112 detalumis on 09.21.13 at 11:39 am

#59 and #75 well done? This is 2013 not 1961, any man who encourages his wife to quit her job and stay at home these days is not a “wise guy”. Daycare is a very transient expense, it goes down and disappears but checking out of the workforce turns you into a dependent. It’s almost impossible to pick up a decent career again after you do so, so why are you doing that?

Spousal support laws were added surreptitiously after no-fault divorce and it means if you “enable” your spouse to stay at home you can be on the hook to support them the rest of your natural born days. Nobody should let their spouse be dependent on them financially it’s the stupidest mistake anyone can ever make.

A wise man marries a woman who has a career and encourages her to keep it. That is the best buffer for job loss, disability or any sort of future adversity.

#113 Chickenlittle on 09.21.13 at 11:44 am

Derek R and Cici:

Thanks for the support, guys. I know he isn’t the only one and that is sad! I’m just glad we don’t have a mortgage! The people I know personally that have been recently laid off is in the double digits. It’s a crazy world out there!!

Anyways: #42 Mathieu:

Great article! I especially liked the descriptors delusional and taunted.
I just graduated from college and I make exactly what I made as a Mcd’s manager ten years ago. It would be nice to make more, but I know in my line of work that won’t be happening until I land a position in a school. Until then, I am perfectly content doing what I do because I enjoy it, not because it pays me a crap load of money. The only thing that I may be delusional about is that I expect to be treated like a human being. For some reason people look at me like I’m crazy when I say this.
Taunted, ABSOLUTELY!!
Haha! THIS one made me laugh the most! It is SO true!!

#114 realdeal on 09.21.13 at 11:47 am

In the 905 there will never be a house meltdown, why because all homes that are being sold, are being bought by overseas buyers. Agents are going back to China and getting over asking prices for homes. Welcome to the the new Canada.

Thought all the crazy, loser xenophobes were in Vancouver. — Garth

#115 SRV on 09.21.13 at 11:47 am

To the several defenders of the host’s US recovery theory on this thread…

Whatever happened to the “US economy is recovering so well The Fed is tapering” the monthly injections of free money for the criminal TBTF banks meme (the only reason for the “bubble” in R/E and equities btw)?

And… for those doubters (what-up Garth?) of banking manipulation of PMs… this is a link to a recent Ted Butler interview (easier to just read the text below the vid), where he explains how he copies Jamie Dimon, and the entire JPM board of directors, with every one of his very public calls (and there are many) of their criminal manipulation of PMs… and not a single denial, or threat to sue for libel, from this bastion of capitalistic ethics (that just set a $4B legal expense budget for the coming year, lol)… hmmmm!

http://www.sprottmoney.com/news/ask-the-expert-ted-butler-september-2013

(a) Tapering is delayed, not abandoned. (b) Buy all the PMs you want. The outcome is clear. — Garth

#116 Post Haste on 09.21.13 at 12:02 pm

#25 mousy

You may have had no issue living in an apartment while growing up – I did myself – and it has some serious limitations, especially if your friends lived in homes – you noticed the differences quickly.

Try hauling your bike in an elevator packed with people, or grocery shopping and everyone seems to look at what you bought. Elevators that seem to stop on every floor as you urgently need to use the bathroom. People cooking all different types of food that mix and linger in the hallway. With the way buildings are made, you are lucky to get either the morning sun or afternoon sun. My old man told me he purposely bought our place facing the evening sun as most days we were off to school / work to even enjoy the morning sun.

Fire alarms pulled at 2am – parking your car in a garage was questionable as vandalism happened once a year. No room to relax on the balcony – you had to head to the nearest park to enjoy the feel of grass between your toes. Neighbours who stumped, or dropped things that seemed like a daily occurrence. Untold maintenance expenses (though I was never aware of when I was a kid). 2 years in a row each homeowner was faced with a $8K bill for improvements. Roaches and mice seem to have an easy way of moving within a building –

And nowadays – construction on these glass boxes seem to be questionable.

#117 Old Man on 09.21.13 at 12:08 pm

I would not count out RIM just yet, and know things look not too good, and here is the wild card, so never say never! They are in a boxing match, and have been knocked down on the carpet, but might still have gross sales over $1 billion going forward -maybe. They are taking extreme actions to keep the ship afloat by cutting expenses; it is a roll of the dice, and for the past two years have been cutting employees which is the reason why KW has so many property listings now. I say things don’t look positive in the least, but only time will tell if they arise up with a comeback.

#118 Donald Trump on 09.21.13 at 12:14 pm

Re RIM/Blackberry

It was my view that each company simply leapfrogged over the other…ie ripped off the idea and made their own version. I know APPLE is engaged in a lot of proprietary lawsuits which may be a shot across the bow to let them rip off but don’t challenge them.

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

I recall an old cartoon about Thomas Edison. He is talking to a person. To Edison’s left is an old grammaphone. To Edison’s right is a 1970’s style high- end music system.

The other party asks why he doesn’t sell the more modern version. The punchline is that the items are developed long in advance of their introduction to the market, its simply to keep the public in a continual buying frenzy.

#119 World Traveller on 09.21.13 at 12:20 pm

#60 Smoking Man on 09.20.13 at 10:32 pm

Number 3 son with his new found wealth selling my amazing productivity software

******

Pics, or it never happened.

#120 Donald Trump on 09.21.13 at 12:25 pm

As per usual, I see that the Bankrupt Province of BC has concluded the latest psy-opp of Public Consultation and will proceed with the Massey Tunnel replacement, another multi – billion dollar boondoggle.

Of course, they won’t come out and say it will be “tolled”, but we know it will be.

The only real beneficiaries will be some major players, like the Federal Port Authority, wishing larger ships to travel inland, which the tunnel currently impedes.

Typical neo con ploy…privatize the benefits and socialize the costs.

#121 Mike T on 09.21.13 at 12:41 pm

My take on Blackberry?

Purely speculative….

too secure for the NSA’s liking

in that context, if true, which I cannot and will not attempt to prove, I give Blackberry a ton of credit for fighting and holding on for so long even though the outcome was inevitable 6 yrs ago

there is your conspiracy theory for the day!

Happy end of summer :(

#122 Don on 09.21.13 at 12:42 pm

I’m not an particular to any generation, stupidity, greed, arrogance, incompetence transcend every generation…did I mention stupidity?

I am my three friends have yet to buy which allows us to move for other opportunities. As people are chained to their houses… more opportunities for us. I mean really…I know of a single person who just bought a house for her and her cats. Now being hosed by reno’s and contractors milking the only job they have. She could have done some research about buying at the top of the market, but I take it all the chear leaders (aka house prisoners) have been saying it was a good timing for her to buy. Don’t get me wrong, if you bought your house years ago or recently for a great deal – depending on your area…kudo’s.

I for one and more concerned about the freedom to pursue future opportunities.

Children require people to become more home bound, but they can move with you. An over priced house chains you to a municipality and a great deal of effort to change your circumstances. My friends who can buy have no need to. They like the freedom.

#123 Bob on 09.21.13 at 1:07 pm

Garth you have said recently, that overall, Canada could see a 15% decline in the price of housing. With a slow bleed further over the next several years.

But, you have also said that some areas of high demand like Oakville and the West End of YVR will be less.

How do you think smaller cities in BC like Victoria, Nanaimo or Kelowna will fare using these guidelines? A harder fall, about the national average or a softer landing? I’m curious because of the higher senior population in these areas.

#124 Old Man on 09.21.13 at 1:12 pm

Now I hate to blow Mr. Turner’s cover, as he was at Western University for a couple of years getting his Masters Degree. I know a few women who remember him well, and they told me in secret that he was a player on campus with the women; need I say more.

I was married. And virtuous. — Garth

#125 newbie on 09.21.13 at 1:19 pm

@112 BOB RICE
In full agreement. I’d say that the thoughts you present resonate with me more than most on this thread. There is so much negative and resentment towards my generation – Gen Y. I’ve been following the blog for quite some time as I do feel Garth has a lot of really good advice re. personal finance, however, the whole perspective from most on this blog re house horny Gen Y’s (That is the correct generation for twenty somethings actually) is really starting to annoy me. Yeah, I live in the GTA. I have an expensive house…just sold and bought my second (much higher price than the average Cdn house price). I have 50% equity in my home…that’s pretty good for my age. I have a stable job …not going anywhere…not leaving my family (immediate or extended)(family is too important to give up for some cheap boonie life)…not leaving the GTA….and most of my circle is fairly the same…we pay down our mortgages…we pay our bills..we try to live a little ..a little bit of travel etc etc..everything in balance …if the housing market crashes…we are not going to drown…so all of you baby boomers….keep on expecting the sky to fall..i know you’re waiting for the last laugh, but you’re not going to get it. Some of us are still pretty smart and we’re trying to adapt and prepare for the worst but not putting our lives on hold.

#126 eddy on 09.21.13 at 1:22 pm

#115 realdeal on 09.21.13 at 11:47 am

In the 905 there will never be a house meltdown

^^^^
I might agree if you said Oakville but 905 is too big for statements like that. Did you hear about the new Costco in Oshawa? Job fair at the Holiday Inn- line ups all around the hotel property in the freezing cold, some camped out, for part time jobs including midnight shifts

#127 scibadubadebumbado on 09.21.13 at 1:27 pm

#74 Nosty Spaced Out Somewhere on 09.21.13 at 12:05 am
____________________________________________

You are right! Statins are dangerous and unhealthy for most. More and more doctors are starting to understand this.
There are so many jobs on the line in this $30 billion dollar market that many would rather continue the scam than cause so much financial pain to the industry.
Where do you think your doctor gets his new medical information after he gets out of Med School?
Answer: Drug sales reps. These are the people who are not doctors and most have no medical training. They deliver all the “Free” samples that your doctor gives out along with Big Pharma Propaganda.
In return over time the doctor gets comfortable with the products and then starts writing presctiptions.

If your doctor offers you Statins… “just say no”.

http://www.doctoroz.com/episode/doctors-who-say-everything-you-know-about-cholesterol-wrong

Exercise your BS detector.

#128 eddy on 09.21.13 at 1:28 pm

#115 realdeal on 09.21.13 at 11:47 am

In the 905 there will never be a house meltdown

^^^^

It is of course possible that in the unlikely event of a nuclear meltdown at the Pickering Nuclear Generating Station there could be a meltdown in house prices

#129 HD on 09.21.13 at 1:33 pm

@ #113 detalumis on 09.21.13 at 11:39 am

Everyone’s situation is unique and different.

If after careful review of their circumstance ‘wise guy’ and his wife determined that it was best for her to stay home, good for them.

And yes, ‘well done’ on making the assessment and acting accordingly.

Respectfully, you are in no position to know if his wife will be successful or not in ‘picking up a decent career’ when she is ready to do so.

It depends on so many factors such as her line of work.

Best,

HD

#130 daystar on 09.21.13 at 1:43 pm

I think its time for me to retire. For some reason I thought the Verizon bond sale wasn’t corporate bonds but the sale of treasuries. Misread a link but its a woefully sloppy mistake, something one would expect from a failing student and as such, to avoid doing more harm than good, its time for me to dis-engage and move on.

I’ve learned a great deal here regardless, enjoyed Garth’s humor and insights and wish you all the best in luck, prosperity and love.

Don’t sweat it. There are people here who actually think the Fed prints money. — Garth

#131 pete on 09.21.13 at 1:45 pm

First of all Nortel had debt while Blackberry has zero debt and over $2,600,000,000.00 in cash . The downsizing was very much needed as they did not need 12K workers and even after the 40% layoff they will still have (7600 workers) which is more workers then Facebook who has 5300 employees. Google has almost 45,000 employees yet they dominate the Internet with countless services. A leaner blackberry is very much needed and they are now heading in the right direction to focus on software and services.

#132 Ralph Cramdown on 09.21.13 at 1:48 pm

#116 SRV — “And… for those doubters (what-up Garth?) of banking manipulation of PMs… this is a link to a recent Ted Butler interview”

I can’t speak for everyone, but I don’t care whether JP Morgan is cornering the gold and silver markets or not. They’re not vital to my everyday life like energy, industrial and soft commodities are. So maybe JP Morgan makes a few bucks… as long as the Taxman gets his cut, I’m OK with that. What are Butler’s trading recommendations? Does he advise betting against JPM, buying when they’re short and shorting when they’re long? Does he advise trading with JPM? Does he EVER predict short term declines and advise his clients to trade accordingly? Or does he just get out of bed every morning knowing he has to write 300 words on why to buy gold? Because to my mind, if he’s right that JPM is manipulating the market, making millions and the authorities don’t care, BUY JPM.

The really rich would be more than happy if you put all your surplus in PMs and leave ownership of all the income producing and rent generating assets to them.

#133 Old Man on 09.21.13 at 2:02 pm

Now here is my retail report as on Friday had no more than $5.00 in my wallet, so made a phone call for some green that would clear at midnight. Today is a huge shopping nightmare, so went off at 10:30 AM to one bank, and nobody was there, and grabbed $200.00, to hit another bank with a deposit counter cheque for a big deposit, and the gal said do want some cash, and said no, as did such at the other bank; nobody there either.

I was off to hoop me some food bargains with huge discount sales to stock up with two places side by side, and nobody there, as had two bags that could carry 50 lbs. each, so did my best. Tomorrow my food target will be Shoppers Drugmart; not just the food stuff, but the paper items, as lost leaders that nobody can beat, so save money with target buying.

The bottom line to this rant is even with bargains there is nobody there, and that tells me something is very wrong with the economy, as too many people cannot even afford the bargains in life, and have no clue what is going on.

#134 TurnerNation on 09.21.13 at 2:06 pm

From the expensive-obedience-cert. dept:
Universities have always been hotbeds for ‘mind control’, revolutionaries, and communism (no kidding).
(Trudeaus everywhere count upon this.)

Let’s see what is going on at a major one, in Canada:

– “The Graduate Research Awards for Disarmament, Arms Control and Non-Proliferation are offered annually by….
The primary objective of the Awards is to enhance Canadian graduate level scholarship on disarmament, arms control and non-proliferation issues.”

Are they kidding? Weapons industries are among the Top 4 most-profitable business in the worlds. Always has been so. In fact H just gave 1/4 billion in “aid” (cough, arms) to Syria. Did he ask? We know he has WMD.

– Next Wednesday, September 25, is [the] fourth annual “Pink Day,” a series of events across all campuses that celebrate respect in our community. Like the popular anti-bullying day in grade schools across Canada, everyone at is encouraged to wear pink to mark the occasion, but the discussion Pink Day hopes to inspire is a bit broader in scope.

I thought we stopped pinning pink triangles onto ‘different’ people a long time ago…what’s with this movement. Snowflake dye.
From what I’ve seen bullying mostly occurs across social and economic classes. Of course, when we’re all in poverty and the same it might end. Such is communism.

Let me tell you about the black SUV & driver limos, picking up people from the Ritz (5-star hotel). Dash was carded with an official sign from Foreign Affairs Dept. With the crown’s logo, natch.
How the elites are laughing! Us, huddled and swaddled in the dark, during ‘Earth Hour’, facing 20% yearly hydro price hikes and bs “carbon taxes”.
While they jet and stay in unimaginable luxury. Such is communism.
I will wave to the elite Party Members as they roar past. Shine your shoes, sir?

#135 realdeal on 09.21.13 at 2:07 pm

I’m not being an Xenophobia. Just laying out the facts, in 905 Markham home prices are out of control due to overseas buyers. Oakville is also seeing bidding wares due to middle eastern buyers. Mid Toronto is wealth Koreans. I could go on. This is a new Canada in sense of the working class will are being out priced by incoming money. Sure it happened before, but not in the numbers that are occurring now. It all comes together now, during the “recession” Canada government did what it could to make Canada look like the untouchable country. This resulted in a mass pouring of money into the country from China,India and the middle east.

When you have any evidence the ‘foreigners’ are not Canadian residents, let us know. Until then it’s fiction, paranoia and, yes, xenophobia. — Garth

#136 realdeal on 09.21.13 at 2:40 pm

Garth take a drive in these areas look at all the stores signs not english , look at the esl % on the high school reports. Look around!!! Talk to the RE agents in the areas and you’ll understand what I’m saying.

They’re not white. I get it. So what? — Garth

#137 realdeal on 09.21.13 at 2:44 pm

Also I’m not saying they are foreigners, they might be new Canadian residents, all I’m trying to say is the RE game has been changed.

#138 SRV on 09.21.13 at 3:06 pm

#133 Ralph Cramdown

“I can’t speak for everyone, but I don’t care whether JP Morgan is cornering the gold and silver markets or not. They’re not vital to my everyday life…”

I was addressing the denial of PM price manipulation by many (including the host… notice how he chose not to address it in his usual pithy comment) on this site, yet you deflect with a completely unrelated argument because… ?

Interesting you’re good with perhaps the most influential financial entity in the world openly committing financial crimes on a day to day basis (with obvious impunity)… do you really believe that has no affect on the lives of everyday people… really?

Btw, Ted Butler is not an investment advisor… but hey, flail away without apparent purpose if you wish.

#139 Happy on 09.21.13 at 3:06 pm

Garth, a lot of young people… incl. my generation 40s think that rent is money wasting, but most of us never crunch the number to find out that a lot of our mortgage payment goes toward interest instead of principal. I crunched the number for someone using your spreadsheet. I gave that person 5 years renting (2013-2018) and buy as the house price goes down 15-20% compared to those who buy the house now and pay the same interest as her 5 years later with greater principal. The result, 25 years later, she is doing better… People love to spend time to talk but not crunch the number… No Action Talk Only

#140 nonconfidencevote on 09.21.13 at 3:12 pm

@ #134 Old Man
“even with bargains there is nobody there, and that tells me something is very wrong with the economy, as too many people cannot even afford the bargains in life, and have no clue what is going on.”
—————————————————————–

Nah, they’re just too lazy to get out and get the bargains

#141 Old Man on 09.21.13 at 3:24 pm

#136 realdeal – Canada was established into a great country from day one with immigrants from all over the world, so what is your point? You have none, and that is my point. Those that came into Toronto for example established areas, and all was well, as they made Toronto into a vibrant city filled with joy, and all citizens were enriched by a variety of cultures, as for myself this was a hoot to share this all, and made a lot of money with them all.

#142 realdeal on 09.21.13 at 3:44 pm

I’m not saying anything about the type of people, I’m saying that money is coming in bundles from outside the country. Let me explain, someone comes over with 2 million in cash( I see this happen for I am not orginal from here) and bids x% higher on a home, just because they can. Well how does a person like me or you who work for x amount per year buy in that area..we don’t. That’s all I’m saying, so please don’t think I am racist that was not the point I was trying to make.

‘Money is coming in bundles from outside the country.’ Stats to support this statement? — Garth

#143 Renter's Revenge! on 09.21.13 at 3:58 pm

@ #27 Rexx Rock:
I agree on staying variable. There’s too much government debt for interest rates to go up. They can’t afford higher rates, so they’ll keep ZIRP’ing and QE’ing until it gets inflated away.

@ #41 Inglorious Investor:
Nice handle, and good description of houses being “insatiable beasts”. It really bugs me when people say houses are good investments because the rent is same as the mortgage payment. Especially when they’re geniuses with math in something else, like engineering.

@ #73 Socious:
That’s interesting. Why are oil and gas companies laying off staff in Calgary? What kinds of workers are getting laid off? Office workers? Field workers? Inquiring minds want to know :) As a counter point, oil sands operations around Fort McMurray seem to still be growing, based on the planned expansion in electric power transmission to the area, and the fact that Warren Buffett now owns 1% of Suncor.

@ #113 detalumis:
Agreed. There’s no reason why women can’t be the “breadwinners” and men the “baconbringers”.

@ #136 realdeal:
The xenophobia regarding rich immigrants bidding up house prices is not just unwarranted, it’s irrelevant. It doesn’t matter where the money comes from. The market price of everything will always rise to the point where it sucks up all the earnings of the median-income earner.

That’s the sad thing about it. Anywhere that there are decent jobs, the cost of housing becomes unaffordable. As soon as the jobs are gone, house prices drop back down. Case in point; the housing sector comprises a large part of Canada’s GDP. As soon as that sector slows down, people won’t have the money to buy the houses they’re building.

#144 not 1st on 09.21.13 at 4:19 pm

‘Money is coming in bundles from outside the country.’ Stats to support this statement? — Garth

Right here Mr Turner;

http://business.financialpost.com/2013/09/20/record-40-million-sale-of-vancouver-condo-to-middle-eastern-royal-signals-housing-market-is-peaking/

One sale? Seriously? — Garth

#145 45north on 09.21.13 at 4:30 pm

Blasé: talking about houses Sure, they may not have granite and heated towel racks, but you and I never had those when we were growing up and we turned out o.k.

funny how standards have crept up. The exception would be the house my wife grew up in. Hot water heating.

sciba: I figure you only need a 5 or 10% excess of buyers to make a market go crazy. Garth has taken out at least half of those with this blog alone .

well you only have to take out a few to have a huge effect. It’s kind of hard to complain too much. It’s pretty obvious that the real estate industry is built on debt which is now at the limit.

Observer: Just installed iOS7 and your site’s looking good on the new Safari!

I just read an article that your iPhone broadcasts “previously known networks” whenever it tries to hook up to a public wifi spot. Spoofers listen for the broadcasts and then advertise themselves as a previously known network thereby giving themselves access to your iPhone. For example if you’re at Tim Hortons and you see that you have connected to your home network you have been spoofed.

JimH: Yes, pity poor Scott in Gibsons; sentenced to a self-imposed life-sentence of clouds, rain, mold and mildew

the key phrase is “self-imposed”

William: Will and Lindsay they live in like “HintonBurg” but..ya..like nice place..beautiful..but they don’t OWN it..

I have owned a house for 40 years and have enjoyed the constant increase in house prices. Those days are over. I used to work at Tunney’s Pasture.

realdeal: In the 905 there will never be a house meltdown

in the 905, I figure the percentage equity is below 25% which makes it very vulnerable to a house meltdown. I mean you live there, how many of your neighbours own their own houses outright?

#146 Yitzhak Rabin on 09.21.13 at 4:30 pm

One of the next clones of Blackberryville will be Winnipeg. The place lives on Federal transfers that feed the public sector unions (which run the government).

PST-up, Dividend taxes-up, Hydro rates-up…. Spending-up. When Ontario, BC and Alberta experience budget shortfalls our transfers will be cut big time. Government workers will be working at a Mac’s convenience store behind bullet proof glass.

Did I mention that crime is through the roof and the weather and mosquitoes suck? That is not a place you want to be buying a over-priced house.

#147 nancy on 09.21.13 at 4:33 pm

#141 Happy

WTF are you saying?

#148 not 1st on 09.21.13 at 5:17 pm

One sale? Seriously? — Garth

$40 million is like buying out a full tower of normally priced condos. And the realtor himself admits all his clients are coming in from Asia, Hong Kong, China and the ME. If you are waiting for stats Canada to provide some data you will be waiting a long time. The proof is right there on the ground.

#149 Old Man on 09.21.13 at 5:22 pm

I have this real problem with the Smoking Man as this young gal who is a knockout has the hots for him, as she booked a room in the hotel at the Casino called Seneca for October 26th, and bought a ticket for the Grass Roots in the show room called the Bears Den, and she knows he will be there. She wants him badly, so say Smoking Man look out, as they all want you, so just say no.

#150 Ralph Cramdown on 09.21.13 at 5:40 pm

#140 SRV — “I was addressing the denial of PM price manipulation by many “

Sorry, I don’t think so. The mass of humanity can be broadly divided into two camps: Those who fervently believe that the gold and silver markets are manipulated, and those who don’t know and don’t care.

If you think that PM markets are manipulated by some of the deepest pockets on the planet and that regulators turn a blind eye, and you still speculate in those markets, YOU’RE INSANE.

If JPM was artificially suppressing gold prices, don’t you think the big gold miners who also analyze COT reports would squawk? Oh, of course, they’re in on it too, right?

http://www.cbc.ca/news/business/barrick-gets-apology-in-libel-case-over-market-manipulation-allegations-1.552766

Repent! Sell your gold and buy something that pays a dividend. JPM earned me 7.15% annualized in the time I held it, and I’m good with that.

#151 Scott Henderson on 09.21.13 at 5:56 pm

House prices will NOT be affected in Kitchener Waterloo.

But many house-owners will. That was the point of the post. — Garth

#152 dupcheck on 09.21.13 at 6:03 pm

Very good post. I am in Europe now and still addicted to this blog. Garth why do you write so many good articles?

#153 Realtor #1 on 09.21.13 at 6:05 pm

a 70% ownership rate
an all time high for personal debt
Tighter rules
Lower amortization rates
Higher rates and still No Crash.
Big mistake waiting sorry even I feel bad for you guys.

#154 jp izza on 09.21.13 at 6:20 pm

“(a) Tapering is delayed, not abandoned. (b) Buy all the PMs you want. The outcome is clear. — Garth”

Tapering will not happen, in fact, it may even increase when the next FED chairman is in.

The FED is boxed in. The cannot get out without causing a bond market rout so serious the US government debt will explode.

Think about this, the FED just tested the market with the IDEA they would SLIGHTLY reduce the QE program and rates smoked higher with the bond sell off.

Notice foreign creditors buying shorter duration US debt in the last few years as well.

Garth thought that the FED taper would be proof that the US is on a true recovery which I would actually agree but this is very tepid economic data.

Admit it Garth, the recovery going forward is tepid at best (in fact adjusted for inflation GDP is below 1%) and the FED is now boxed in, they can now NEVER taper let alone get out of their huge treasury stacked balance sheet.

I wouldn’t trade on that belief. — Garth

#155 Herb on 09.21.13 at 6:36 pm

#131 Daystar,

you can’t “retire”! Without your missives I’d be reduced to scrolling past Smoking/Old Man Man’s “contributions”.

#156 Castaway on 09.21.13 at 7:04 pm

#112, 135, 139 and others.

If you can’t say it in 2 or 3 short snappy paragraphs, DON’T. No one wants to read f’ing War and Peace on a blog site.

#157 Smoking Man on 09.21.13 at 7:32 pm

DELETED

#158 SRV on 09.21.13 at 7:41 pm

@Ralph

You have yet to address Mr. Butler’s point, but please don’t bother yourself with another deflection… I’m done debating a Pinball Wizard.

#159 Ralph Cramdown on 09.21.13 at 8:06 pm

#156 jp izza — “The FED is boxed in. The cannot get out without causing a bond market rout so serious the US government debt will explode.”

Here’s my calcs. Let’s say T-bill rates go up 1% and 2 year T-bond rates go up 2%:

Outstanding are $1.6T T-bills @0.11%
Maturing by 2014-12-31 are $1.8T T-bonds @0.76% with a weighted average term to maturity of 239 days.

Renew bills @1.135 (2013-8-22 auction rate + 1%)
That’s an extra $16.4bn/year in interest

Renew bonds @2.33% (yesterday’s 2 year rate + 2%)
$1.8T x an extra 1.57% is an extra $28.3bn/yr in interest

So by the end of 2014, the US government would be paying an extra $44.7 billion a year in interest charges. Keep in mind that the Fed is EARNING $90 billion/year on the bonds it holds.

Source: http://www.treasurydirect.gov/govt/reports/pd/mspd/2013/2013_aug.htm

#160 THe guy is a realor on 09.21.13 at 8:07 pm

@#153
http://kwhouselife.com/?page_id=20

Thanks realtor Scott!

#161 Waterloo Resident on 09.21.13 at 8:15 pm

This lady is predicting a 90% crash in Canadian housing prices. Frankly, i think a 50% decline over 15 years is the more probably outcome. Anyways, she’s REALLY SMART, and I agree with everything she’s saying.

” Nicole Foss : Canada’s real estate to collapse by 90 percent”

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

(published Apr 20, 2012)
Quote: Max talks to Nicole Foss about the unbusted real estate bubble in Canada. some canadians still live in denial

She’s nuts. — Garth

#162 snake on 09.21.13 at 8:20 pm

1) homes are now bought with CASH

http://www.dailymail.co.uk/news/article-2427772/Doubts-cast-housing-bubble-figures-homes-bought-cash-UK-year.html

2)Home cheap home

http://www.dailymail.co.uk/news/article-2427891/Home-buyers-900-year-better-people-rent-despite-rise-property-prices.html

#163 CrowdedElevatorfartz on 09.21.13 at 8:21 pm

@#157 Shawn

For the sake of being ‘one upper guy”.
I’m also 53 and remember my grandparents house in the country.
No running water. A well pump in the kitchen sink. Tub was in an unheated room next to the kitchen that was labouriously filled with heated water from pots on the stove…..So baths were usually once a week with daily spounge baths.
Electricity was for lights, fridge( ice box was tossed out before I was born), radio and eventually black and white tv. TV was two channels . CBC and CTV.
Wood stove in the kitchen to heat the entire house. Outhouse. Pee pots under every bed in case you needed to use the bathroom in the middle of the night in winter.
A “party line” telephone which meant you shared the same line with five other houses and when the phone rang. It rang with a special code for your house. And anyone on that line could listen in. Hence “party” line.
They were definitely NOT “upper middle class” but we kids loved the adventure of staying over.

#164 Nemesis on 09.21.13 at 8:32 pm

“One-horse cities are always at risk.” – HonGT

…as are OneHorseSocieties

[Salon] – RIP, the middle class: 1946-2013

http://www.salon.com/2013/09/20/rip_the_middle_class_1946_2013/

#165 Smoking Man on 09.21.13 at 8:47 pm

There is a tone of chatter on the web about freedom.

No one other than me knows what that is.

Was saving it for the book but my.slot machine at.woodbine aint hitting.

Freedom = being an individual , void of a community beilief system.

People that claim to be free always cognasint of what others think are slaves, sugar coat that all you want.

Insanity is freedom.

#166 AK on 09.21.13 at 9:28 pm

#156 jp izza on 09.21.13 at 6:20 pm
“Tapering will not happen, in fact, it may even increase when the next FED chairman is in.”

====================================
You obviously have no clue what QE is all about.

I would rather believe Ken Fisher’s explenation, before I believe an imposter by the name of Pizza.

#167 Bob on 09.21.13 at 9:34 pm

Worry about climate change instead – more real. — Garth

———————————————————

How about the radioactive plume of water from Fukushima hitting BC’s coast in 2014. There already has been spikes in radioactive measurements – now, way more to come. Maybe more real estate related

#168 Smoking Man on 09.21.13 at 9:37 pm

#131 daystar on 09.21.13 at 1:43 pm

Being a failing student is a gift, enjoy.

#169 Donald Trump on 09.21.13 at 9:43 pm

#135 TurnerNation on 09.21.13 at 2:06 pm

Trudeau was probably the biggest nation wrecker there ever was.

Canada was barely 100 years old when he became Prime Minister. His actions were classic communism.

Under his rule he set in motion the seeds of our nations demise.

There is not one dam thing he did that was positive and puhlezze don’t talk about 1982.

#170 live within your means on 09.21.13 at 9:48 pm

I know it’s OT – but I had to share.

Someone mentioned a Budgie drinking his soup.

I grew up with all kinds of animals.

A bro bought a budgie bird – he named him Dino. We lived in a 3 BR apt. with a very large kitchen at the time. He was allowed out of the cage and flew everywhere in the apt. We had to put him in his cage while eating as he’d go around to everyone’s plate and pick at their food.

He’d sit on my younger sister’s glasses while she was trying to study & sit on her shoulder on the balcony. Never flew away. She actually found him on her shoulder at a bus stop a block away & had to take him back home.
Sometimes Dino would land in the sink filled with dish detergent. We’d rinse him off, put him in his cage, turn the oven at low & put the cage on the door of the oven to dry him off.

Dino had a bad habit of pecking at food my Dad was cutting on a board on the counter top. Dad got fed up & swatted him. Dino hit the opposite wall & fell. Dad was beside himself. Dino recovered, but would dive bomb my father’s head ever after.

Unfortunately, my parents, younger sis & bro went on a trip & eldest bro & wife stayed at the apt. & opened the door to the balcony. Dino flew away & never returned. He was lost without them. Dino had an amazing character. None of us will ever forget him. So many other stories to tell about him. He was one of a kind.

#171 Bob on 09.21.13 at 9:54 pm

‘Money is coming in bundles from outside the country.’ Stats to support this statement? — Garth
——————————————————-
Gee, one of the top realtors in Vancouver believes it.

“Vancouver has been fueled tremendously in the last couple of years by high-end wealthy Chinese and Hong Kong buyers,” realtor Malcolm Hasman said.

http://www.vancouversun.com/business/real-estate/Middle+East+buyer+went+million+Vancouver+property/8939988/story.html

A Vancouver realtor. Well, that settles it. — Garth

#172 Old Man on 09.21.13 at 10:07 pm

A couple days in this room there was a relationship between Real Estate and a divorce. I did not have the heart to scare some men in this room; nor to say if you cross a wife in marriage she will turn on you, as just knew the women would be smiling. Well do you remember a man called Hulk Hogan? His wife caught him cheating on her and filed for a divorce with his net estate at $30 million, and when she was finished with him he walked away with $5 million.

#173 Ralph Cramdown on 09.21.13 at 11:21 pm

#161 SRV — “You have yet to address Mr. Butler’s point, but please don’t bother yourself with another deflection… I’m done debating a Pinball Wizard.”

You didn’t debate, you tried a classic version of “Let’s You and Him Fight” from Games People Play. I don’t address the merits of goldbugs’ arguments because they’re all insane. If you want that opinion from a US Federal Court judge instead of some guy on a blog, including precis of three (3) CFTC investigations into silver market manipulation which found nothing, here ya go:

http://www.gata.org/files/GATASilverClassActionDismissed-

Nobody else here cared to ‘debate’ you either. Take the hint.

#174 Ralph Cramdown on 09.21.13 at 11:21 pm

http://www.gata.org/files/GATASilverClassActionDismissed-12-21-2012.pdf‎

#175 MarcFromOttawa on 09.21.13 at 11:41 pm

#157

The standard of living has increased but, IMO, at the expense of qualify of life.

Gone are the days where a man, without even a high school diploma, could support a wife and kids on a single income and still be able to buy a house and car.

There’s also the degradation of air and water quality, the erosion of the family unit, the creation of the nanny state etc.

#176 betamax on 09.21.13 at 11:43 pm

#90 Devore

– always a clear voice of reason on this board. Thx for posting.

#177 Donald Trump on 09.21.13 at 11:53 pm

DELETED

#178 observer on 09.22.13 at 12:19 am

I know there is a vancouver price drop site, just wondering if someone has a Winsor Price drop site.

It would be interesting to see what happens when a one horse town loses its horse

#179 observer on 09.22.13 at 12:26 am

#174 Bob on 09.21.13 at 9:54 pm
==========

I’m sure with RIM going the way of BRE-X and Nortel. All the realitors as saying never a better time to buy NOW!!!

More selection, yaddy ya ya wooooo wooo

#180 broadway skytrain on 09.22.13 at 1:37 am

#148 Yitzhak Rabin on 09.21.13 at 4:30 pm
One of the next clones of Blackberryville will be Winnipeg. …
Did I mention that crime is through the roof and the weather and mosquitoes suck?
——————————————–
dude , what are you waiting for – get yo ass out to bc – no bugs, no window screens, no cold(ish). there are cheaper areas of the lower mainland to live/work if van city prices are out of reach. good bagels too.

#181 dienekes on 09.22.13 at 1:39 am

Sure was pissed the otherday when fed did not taper, but now talk is of october. They know they acted stupidly, to cautious. But with low inflation, why not pump.

Amazes me the people who claim Calgary is different, due to oil, yet claim the USA is doomed, even though they are gushing with the commodity (they control) in Alberta. Keystone will never see Alberta. Why build it and pay more for the oil you will get anyway?
Just my opinion.

Actually picked up some contracts over last month. All commercial, one for hospital, one for fish cops.
Mines are dead…dead..dead, no money to spend..never been this dead. And will be for sometime. Mines wrote down 60billion in losses last year. This year will be worse. Sucks to be a miner of anything, especially PM

#182 broadway skytrain on 09.22.13 at 2:21 am

#175 Old Man on 09.21.13 at 10:07 pm
filed for a divorce with his net estate at $30 million, and when she was finished with him he walked away with $5 million
——————————-
ouch.
best solution – the gals all wanted into the work world, i say let em have at it. being a stay at home dad is better than a dream. plenty of time to maintain/upgrade your house and or income props/cars/toys – i swept the chimney flue of our woodstove yesterday and enjoyed the heck out of it(lets see susie homemaker do that on a 12/12 roof ), you get to watch your kids grow up, really know their friends, help the neighbors, read every comment of GFool, etc. – you eventually learn to fix ANYTHING which confers a somewhat god like feeling;) – as a confessed insatiable information junkie having extra time to explore the online best facsimile of the entire collection of human knowledge/history/wisdom doesn’t hurt either.

a bright ambitous woman can go far when she has a good man behind her – mine works and folds some of her own clothes (cause i suck at folding)- everything else gets covered so she can go kick ass in the boardroom which she does with aplomb.

it kinda turns the whole divorce settlement thing on its head. i could start nailing some other school moms after recess , get a div, and be supported for life, but i would not trade mine for the world.

our lovely females are the majority of univ, doc/dentist/lawyer/anything but engineer.
find a good one, support her, cultivate her, exercise with her , feed her well, and if you are lucky (and stunningly handy) she will let you stay home too (and pay for your motorcycles!)

#183 broadway skytrain on 09.22.13 at 2:39 am

#169 AK on 09.21.13 at 9:28 pm
#156 jp izza on 09.21.13 at 6:20 pm
“Tapering will not happen, in fact, it may even increase when the next FED chairman is in.”

====================================
You obviously have no clue what QE is all about.
————————————————————

didn’t we just see this movie? last week anyone who said no taper this month obviously had no clue either – but then they were 100% correct – how does that work?

one or two speed bumps in the economy and QE+ is a given. and yes it is exactly printing money, banks only accept money for their bonds/mbs. go try bartering with them and tell us how that goes.

#184 broadway skytrain on 09.22.13 at 2:54 am

Fed is EARNING $90 billion/year on the bonds it holds.

——————————————-
really? the fed ‘earns’ anything?

just think how much they will earn if QE doubles!

#185 broadway skytrain on 09.22.13 at 3:22 am

#86 JimH on 09.21.13 at 1:56 am
#62 AK
re: #11 Scott in Gibsons
“OK Garth, enough with the RE drivel. I’m dying to hear you eat crow on your US recovery position!” &etc.
====================================
AK….
We really shouldn’t be too hard on the guy. As is well known among all inhabitants of this continent, “Lotus Land” has a tendency to soften the brain and instill a nonsensical belief they are much better off than the ‘great unwashed’ of those they foolishly believe to be the inhabitants relatively harsher climes.

——————————
wow do you get out much?

having lived in the better 2 of the 3 maritimes, all over sw ont, muskoka, the big smoke, wpg and other dastardly manitoba towns, did a work stint in calgary in january, i can say with 100% confidence gibsons is a FAR finer place to spend ones time.
yeah it rained overnight, then it stopped before sunrise to a rather pleasant day, with unexpected sun – i was not on the sunshine coast today, but was looking at it for much of a warm 30k bike ride near yvr. looked pretty good to me. and i ride very slow.

last wknd i watched a huge humpback and a pod of 6 orcas within a mile of gibsons harbour – it wasn’t raining then either. in fact is hasn’t really rained a single wknd since april or may it seems. best summer ever.

have fun in brandon or barrie or bridgewater, and keep that BC jealousy on full boil. we will spark a fat one up in your honor.

#186 broadway skytrain on 09.22.13 at 3:29 am

#167 Nemesis on 09.21.13 at 8:32 pm
“One-horse cities are always at risk.” – HonGT
…as are OneHorseSocieties
[Salon] – RIP, the middle class: 1946-2013
http://www.salon.com/2013/09/20/rip_the_middle_class_1946_2013
————————————-
excellent link, thank you very much.

#187 broadway skytrain on 09.22.13 at 3:44 am

#170 Bob on 09.21.13 at 9:34 pm
How about the radioactive plume of water from Fukushima hitting BC’s coast in 2014. There already has been spikes in radioactive measurements – now, way more to come.
——————————————
teensy tiny, utterly and completely harmless spikes – ya those ones.

there was a saying when i worked in the industrial emissions monitoring field – “the solution to pollution is dilution”!!!

the worst projected levels are 30bq/m3

drinking water is safe at 7000bq/m3

scccccaaarrrrrrrry eh?

#188 Devore on 09.22.13 at 3:59 am

#144 realdeal

Your problem is that people speaking a different language than you and with different skin colour than you are buying things you want but cannot afford. Are you competing with these people buying $2 million houses? If so, here, hold on, I’ll bust out my violin and play you a tune… if not, then why do you even care? What does it concern you what rich people do with their money. Are they doing something illegal?

#189 broadway skytrain on 09.22.13 at 4:19 am

Thought all the crazy, loser xenophobes were in Vancouver. — Garth

————————————–
well they are in vancouver cause that is where the ham flows!
many of us here dont fear the ham invasion, in fact it has made us far better off $$$ if we bought here earlier. we can still see it though, even if we are crazy losers.

perhaps you were just ahead of the first wave, but there is some pretty clear differences from the Chinese-cdn guys i went to univ with, and the HAM folks.

none of my pals who were mostly 2nd gen chinese drove ferraris with a N (new driver) sticker on the back, liked bubble tea, bought 40M condos or was much into hello kitty.
they knew about hockey and spoke english and some mandarin, lived in both canadian and chineese worlds at home, but were familiar with what product tim hortons sold and who won the stanley cup last year.

i’m pretty sure jim pattison is not HAM, but if not, who are the canadian billionaires buying 300k supercars for the legions of barely old enough to shave kids i see on the roads here everyday?

HAM doesn’t piss me off, it’s the old/idiot ppl who hold up the line while blaming the atm pinpad for being too complicated.

#190 live within your means on 09.22.13 at 7:09 am

#108 Musty Basement Dweller on 09.21.13 at 10:22 am

I don’t even own a cell phone. DH finally got a Samsung Galaxy S4 from work. He’s not interested in all it’s features but loves it. We were listening to Nostalgie radio station from France yesterday (our fav. station when there). The sound was fantastic.

#191 Steven on 09.22.13 at 8:10 am

we need new kids. These ones are defective.

Not possible Garth. The creation of new kids requires affordable real estate , good paying jobs for men and women willing to marry those men and have 3 or 4 children for the benefit of their nation and families.
It doesn’t look like one can get there from here.

Canada will have to make do with what it’s got for the time being. If that doesn’t work then collapse is enevitable.

#192 Ralph Cramdown on 09.22.13 at 8:49 am

#182 observer — “I’m sure with RIM going the way of BRE-X and Nortel.”

At the risk of making a distinction without a difference, there’s as yet been no fraud alleged at RIM, so it’s more like Dome Petroleum or Confederation Life.

#193 Stickler on 09.22.13 at 8:56 am

Don’t sweat it. There are people here who actually think the Fed prints money. — Garth


No one thinks the Fed actually prints physical dollars.

Of course the Fed doesn’t technically (or actually) print physical dollars. It has an enormous impact in the amount of money and credit in our economy.

http://www.federalreserve.gov/faqs/money_12853.htm

“Is the Federal Reserve printing money in order to buy Treasury securities?

No. The term “printing money” often refers to a situation in which the central bank is effectively financing the deficit of the federal government on a permanent basis by issuing large amounts of currency.

…Although Federal Reserve purchases of Treasury securities do not involve “printing money”, the increase in the Federal Reserve’s holdings of Treasury securities is matched by a corresponding increase in reserve balances held by the banking system.

The banking system must hold the quantity of reserve balances that the Federal Reserve creates.”

#194 T.O. Bubble Boy on 09.22.13 at 9:01 am

@ myself (#24)
#24 T.O. Bubble Boy on 09.20.13 at 8:35 pm
Blackberry is not the end of Waterloo. Thousands of other tech companies are there, many of which are well-funded and steadily growing.
—————————————

Apparently I rounded up… there are “only” 800 tech companies in the region:
http://www.thestar.com/news/canada/2013/09/21/waterloo_mayor_touts_strength_of_regions_tech_sector_in_wake_of_blackberry_layoff_announcement.html

“The mayor of Waterloo, Ont. is expressing hope that her city can weather the loss of jobs at BlackBerry.
Brenda Halloran says there has been a trend where those affected by past layoffs have been absorbed by the more than 800 tech companies within the region.
She says there are more than 1,000 job opportunities in the region’s tech sector alone.”

(probably will be 1000+ once some of the ex-RIM employees decide to start their own companies)

#195 Glen on 09.22.13 at 9:37 am

My wife and liberated ourselves from the chains of mortgage slavery a year ago. Living in Hamilton, we rent a decent townhouse (3 br + garage) for $1000/m. We used to have to spend all of our money on housing “incidentals”. What a waste. Now we live on one income, my wife can stay home to look after our two girls and we laugh at our baby boomer parents who emphatically declare their houses will be worth $500000 when they come up $150 000 to live the HGTV dream. Btw: our investment manager has never told us we need a new roof.

#196 realdeal on 09.22.13 at 9:55 am

144

The problem is the $2 million dollar home was about 1.2 before the cash flow came in. I’m not crying, I’m telling what it real.It’s not about the color of the people it’s about the playing field being changed totally. What happened in the last housing cycle won’t be the same as this one, due to totally different factors. That’s all I’m saying, I don’t care what color the money holders are, it’s the money is flowing and not only the 2 million dollar homes are impacted but even the lower priced ones. To make it clear, I am NOT taking about race, but about the $$$$. Oh and I don’t need your violin, unless it’s solid gold then we can talk.

#197 Bob on 09.22.13 at 10:04 am

A Vancouver realtor. Well, that settles it. — Garth
————————————————
No disrespect Garth, but when you disbelieve the association numbers or the statistics, you often quote what a rogue realtor is saying or espousing. Many times your nightly blog is themed or their opinions.

Wrong. Numbers always support my arguments. You are citing one realtor, one sale. No creds. — Garth

#198 Ret on 09.22.13 at 10:20 am

MUSH sector (knowledge, health care, government).

It didn’t work in Detroit and it ain’t working in Hamilton either. Very few middle class jobs are left in Steeltown. Hundreds of poor and disabled people are cruising around downtown, cigarette in hand, on $3000 power chairs courtesy of the Ontario taxpayer and the health care system. Often two or three members in a family all have their own chair to cruise around on.

Who needs taxicabs when there are government funded power chairs? Hamilton has rebranded itself as the power chair capital of Canada!

The decay slows down with government programs but it relentlessly continues until manufacturing jobs return. Building transit subways and infrastructure projects will only buy time for what is inevitably going to happen in Ontario.

We have seen what does not work in the US but our leaders feel compelled to follow the same path.

Power chair lust. This blog just hit a new low. — Garth

#199 Donald Trump on 09.22.13 at 10:42 am

Power chair lust. This blog just hit a new low. — Garth

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

…..and it will get worse.

Notice the increase in TV ads re: selection of adult DEPENDS .

#200 Randy Macho Man Savage on 09.22.13 at 11:23 am

#185 broadway skytrain on 09.22.13 at 2:21 am

a bright ambitous woman can go far when she has a good man behind her – mine works and folds some of her own clothes (cause i suck at folding)- everything else gets covered so she can go kick ass in the boardroom which she does with aplomb.

it kinda turns the whole divorce settlement thing on its head. i could start nailing some other school moms after recess , get a div, and be supported for life, but i would not trade mine for the world.

———————–

I think I may have vomited a little in my mouth with that post. How about some ambition on your part? I would feel totally emasculated if I were in your position – and I’m sure wifey and all your friends feel the same way…

I do understand the divorce part being a bonus for you- however, I think it’s best if husband and wife both have jobs in comparable pay levels.

My advice, learn to make some moola of your own…

#201 TurnerNation on 09.22.13 at 11:40 am

Just checked email today. Here’s our forum host, on the suspect ‘Howe St.’ show:

http://talkdigitalnetwork.com/2013/09/this-week-in-money-102/?

Garth Turner – Policies of the U.S. Federal Reserve might affect Canada

#202 TurnerNation on 09.22.13 at 11:43 am

Desperate kando developers in Toronto.

Flogging disparate developments.

Click on building name, to right, see massive discounts:

http://www.inventoryboutique.com/

#203 Kaganovich on 09.22.13 at 11:46 am

The USA will continue to recover (asset classes at least) as long the the QE continues unabated. This is self-evident. They were coterminous. I highly doubt the so-called recovery will eventually be exclusive of the FED’s interventions.

#204 Daisy Mae on 09.22.13 at 11:48 am

#125 Old Man: “Now I hate to blow Mr. Turner’s cover….”

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

I’ve never know anyone before who’s done it all…knows everyone and everything….been everywhere…. LOL

#205 Daisy Mae on 09.22.13 at 11:48 am

….and I mean YOU, Old Man.

#206 Daisy Mae on 09.22.13 at 11:54 am

#126 Old Man:

You’d better brush up on your understand of ‘slander’.

#207 TurnerNation on 09.22.13 at 12:03 pm

#111 Old Man, I’d heard – until recently – of Western’s event along the lines of ‘Drink the bar dry’. Whereby they’d pile all into busses and find a dive bar somewhere. And overwhelm. Was this so?

#208 Blacksheep on 09.22.13 at 12:24 pm

Steven # 194,

“Not possible Garth. The creation of new kids requires”

“If that doesn’t work then collapse is enevitable.”
——————————————————-
The Fourth Turning. Cycle repeats. Collapse (hardship?)
is the cure.

#209 young & foolish on 09.22.13 at 12:43 pm

“The really rich would be more than happy if you put all your surplus in PMs and leave ownership of all the income producing and rent generating assets to them.”

Hahaha … true … and you will eventually be able to add housing to that also, when it finally becomes hip to rent and move to where Corporate Canada needs you.

The 1%, they’re always a couple of steps ahead.

#210 Westcdn on 09.22.13 at 12:45 pm

My missive today,
The issue of the world debt bubble is a favourite hobby horse of mine at the present time. I am convinced it is the reason for overvaluation of housing and other assets. I expect a deleveraging cycle but I don’t know when it will start. I thought Ray Dalio’s video on the credit cycle was useful to understand the need for a “beautiful deleveraging” per the last few minutes. I admit it is a childish presentation but has a good message. http://www.economicprinciples.org/
I think my best bet is to go after high quality income assets provided by corporations and hedge with some North American government bonds. Commodities such as housing and metals should suffer under deleverage so I will treat them as poison. Being nimble regarding financial assets is going to be more important than buy and hold. But it is speculation on my part and I will be paying close attention to what is happening in the present since my retirement depends on getting more things right than wrong. I would love to be the beneficiary of defined benefit pension plan and leave the worries behind me. Or do I?
If there was no inflation and I saved 10% of my gross income for 40 years in cash, then I could retire for 4 years if my retirement spending didn’t change. Does anyone see a problem? Well, it is apparent stuffing cash in a mattress is a bad idea. Obviously I want to earn a return on my savings, at least 2% over inflation which in my scenario of zero inflation would roughly double the value of my savings in 40 years (using the rule of 72 as rough guide). Now I have 8 years of retirement at normal spending habits before I have to sell my real estate and hopefully end up with equity to spend. But under my scenario, why would a 40 year old home be worth more than I paid but there are good reasons.
Anyway, I am seeing problems with financing even a 15 year retirement. So if I want a 30 year retirement in relative comfort, I am going to need some else to pay for it or be real good at saving and investing 20% of gross income – rich parents would really be helpful. That is the beauty of a sponsored pension plan. Someone else is contributing to your retirement. However, this is not free or guaranteed money. This is why government employees are underpaid (cough, snort). They give up current earning earnings so they don’t have to save 20% and have a guaranteed pension for life. Mind you, current public employees contribute about 10% of earnings to the pension plan – I will ignore the gravy train of prior years. In the case of corporate pension plans, most are underfunded and will have to address benefit and contribution issues.
Under a deleverage scenario, I see pension plans being under pressure to maintain benefits. I suspect that most future pensioners will get less than promised. There are many boomers working past 65 today and, more, past their prime will stay on and drive down productivity. As a historical note, corporations began pension plans as a way to get old employees to leave so younger ones could be hired. However, I remember a quote – “Age and treachery will trump youth and exuberance”.
I think saving (living under your means) and putting these funds to work will be the order of the day in the near future. The speculative money trees are dying and it is time to look closely at over consumption. I hope I am wrong about debts but I don’t see another peaceful way out, yet.

#211 Old Man on 09.22.13 at 12:46 pm

#209 Daisy Mae – you need to brush up on the many definitions of player, such as being an active participant in academic excellence that was admired by the women in class. Women are all part of any class peer group, as well as the men. It pains my heart that your limited knowledge involves a slang definition – checkmate!

#212 young & foolish on 09.22.13 at 12:48 pm

“Desperate kando developers in Toronto.”

Hahaha, sucker, you’ve no idea how much loot they’ve pulled in over the last decade ….

#213 broadway skytrain on 09.22.13 at 12:50 pm

#203 Randy Macho Man Savage on 09.22.13 at 11:23 am
——————-

I think I may have vomited a little in my mouth with that post. How about some ambition on your part? ————-
……………………………………..
– been there done that – worked an an engineer around the world in my 20’s , ran successful business, made plenty, thanks. realized that time is the office/plant never beats time dirtbiking in the mtns, going to the kids ball games, building a cottage, renovating the house, skiing on EVERY big powder day , etc.
………………………………

– I would feel totally emasculated if I were in your position…

————————-
– then clearly you have a lack of confidence in your own manliness (your name is a tip off too) , once you are ok with yourself, your skills and your physical condition and abilities , your job/slavery will not be needed to make you feel worthwhile or manly.
also ,having the gals/moms in the ‘hood come by to flirt every day while i’m out chopping wood or working on the car/bike or just walking the dog is kinda nice too.

#214 young & foolish on 09.22.13 at 12:54 pm

REITs … they’re patiently waiting to buy your condo, at a discount.

#215 walltiger on 09.22.13 at 1:01 pm

i knew long ago that old man is full of shit.
keep your stories to yourself.

#216 roses are red on 09.22.13 at 1:07 pm

Fed is EARNING $90 billion/year on the bonds it holds.
_______________________________

yeah. it prints that 90$ billion too. what a great game

The Fed does not print money. — Garth

#217 Marlene on 09.22.13 at 1:26 pm

I live in Victoria BC, and I cannot, for the life of me, understand who can afford to buy “cheap” houses here. “Cheap” is $500,000. A $500,000 house will need much upgrading, by the way. The average house is more like 600K, and up. Victoria real estate prices are insane. I was lucky, I bought in 2001 – before the boom. I could not afford my home if I were wanting to buy it, today.

#218 Pulp Faction on 09.22.13 at 1:43 pm

“I’m not raising my kids in an apartment Garth. That ain’t no fetish.”

No, it’s just a purely emotional decision, fostered by mistaken beliefs that it will make any difference, but without merit or proof…..versus a financial decision that is factual, accurate, spelled right out for you , and it is all backed up with provable fact.

So, if you screw yourself up financially for the rest of your life, we could read all the words I just wrote here…..or we could just call it “fetish” for short.

Whether it works for you or not, it works for us. Fetish.

#219 willworkforpickles on 09.22.13 at 1:54 pm

Level – I Common Symptoms of Mold Exposure

The most commonly reported symptoms of short term Mold exposure:

Sneezing
Itching Skin
Redness and skin irritation
Watery Eyes
Itching Eyes
Headache

Level – II Advanced Symptoms of Mold Exposure

The following symptoms of Mold exposure have been reported generally as a result from persons being in a Mold contaminate environment on and off for an extended period of time. Symptoms are reported to have become more severe and longer lasting directly in proportion to the length of exposure time. Their reported symptoms are as follows:

Constant Headaches
Nose Bleeds
Feelings of Constant Fatigue
Breathing Disorders
Coughing up Blood or Black looking Debris
Nausea
Diarrhea
Vomiting
Loss of Appetite
Weight Loss
Hair loss
Skin Rashes
Open Sores on the Skin
Memory Loss “Short Term”
Neurological & Nervous Disorders
Sexual Dysfunction
Swollen Glands in the Neck Area and under the Armpit
Sudden Asthma Attacks or Breathing Disorders
Ear Infections and Pain
Chronic Sinus Infections
Chronic Bronchitis
Pain in the Joints and Muscles

While it seems Mold can cause many symptoms one must remember that there are thousands of species of Mold. Different species of Mold can have a wide variety of reactions within different people.

Level – III Late Stage Symptoms of Mold Exposure

The following Mold exposure symptoms are the most severe and are attributed to high levels of exposure:

Blindness
Brain Damage
Memory Loss “Long term”
Bleeding Lungs
Cancer
Death

#220 Smoking Man on 09.22.13 at 2:10 pm

For would be entrepreneurs, come join the dark side.

Valuable workshops, sending in number 3

http://www1.toronto.ca/wps/portal/contentonly?vgnextoid=159acf2cdbbac310VgnVCM10000071d60f89RCRD&vgnextchannel=08e032d0b6d1e310VgnVCM10000071d60f89RCRD

#221 Victor V on 09.22.13 at 2:16 pm

Alberta home purchase a big financial regret

http://www.thestar.com/business/personal_finance/2013/09/22/alberta_home_purchase_a_big_financial_regret.html

My biggest home buying regrets were:

•Borrowing the maximum I was approved for by the bank

•Depleting my savings on closing costs and furnishings

•Not having a proper monthly budget

•Underestimating how much I’d rely on renting out a room for income

•Overestimating my own income and opportunity for promotion

I was extremely fortunate to get a promotion and have my home rise in value at the right time when I needed help. But if the economy worsens and the real estate bubble finally pops, then it won’t end as well for home buyers who get in over their heads this time.

#222 espressobob on 09.22.13 at 2:39 pm

#90 Devore

I only wish a few individuals I know would read this blog along with your comment. Some people actually do store gold/silver bars in their basements. Gotta wonder?

#223 Donald Trump on 09.22.13 at 2:43 pm

#208 Daisy Mae on 09.22.13 at 11:48 am

….and I mean YOU, Old Man.

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

Oh dear…

Another Old Man groupie.

They must be very desperate East of the Rockies.

#224 Old Man on 09.22.13 at 3:25 pm

#210 – Turner Nation: just another rumour as have heard nothing about this at all, but they taxi to the bars together as will not drink and drive anymore. I do have my connections with Western University, and the parties on campus are wild, and totally out of control. Now at UofT the wild parties were always held at the Frat and Sorority houses, as went to them all. It is too bad in my sordid opinion that Daisy Mae has led a sheltered life, as she protests too much, and so be it as will not judge her motives in the least.

#225 Musty Basement Dweller on 09.22.13 at 3:29 pm

#222 willworkforpickles on 09.22.13 at 1:54 pm
Level – I Common Symptoms of Mold Exposure
===================================
Awesome. Thanks for the mold illness information. I’m sure a lot of us clammy, paleskinned, westcoast basement dwellers (and happy ones at that) on this pathetic blog can benefit from this.

I’ll print that out and keep it on my partially rusty, mildewy fridge door for handy reference.

#226 jess on 09.22.13 at 4:35 pm

40 AK re: apple
… Xiaomi

======
‘beds in sheds’

Rents rise close to record high as Taxman warns rogue landlords to come forward early in clampdown on £500m unpaid tax
Rise of the ‘ghost resident’: 3.3m people in rented properties are living illegally in sub-let rooms to dodge rising rents

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2425502/More-3m-people-living-rented-properties-listed-tenancy.
http://www.thisismoney.co.uk/money/mortgageshome/article-2424376/Pending-EU-mortgage-directive-stop-buy-let.html
=

Outside it, on the grass, lay a crate full of empty beer cans. On the roof was a Sky dish, and a gas flue had been knocked through the wall to carry away fumes from a cooker inside. The cramped outbuilding is home to eight Indians, including a woman, who pay hundreds of pounds a month to a rogue landlord who owns a thriving grocery shop a few miles away.
These impoverished immigrants — who were not in ‘residence’ but had gone out for the day — are just a few of the countless thousands now living in so-called ‘beds in sheds’ in back gardens across London’s suburbs and the Home Counties.

Read more: http://www.thisismoney.co.uk/news/article-2362393/Inside-migrant-Shed-City-Immigrants-living-cramped-illegally-built-garden-sheds.

#227 MacDaddy on 09.22.13 at 4:48 pm

Bob Rice: “My wife and I (extremely happily married) are renting b/c I too feel a correction is looming. We sold and couldn’t find what we wanted for the price we wanted, so we figured we’d rent for now.”

Bob you are pounding the ‘we will live in the same house forever’ drum but your own story proves this is difficult for even those that want it. You have lived in 2 places recently and expect to move again after the inevitable correction. That is 3 different homes in a relatively short period of time. You just proved Garth’s point that few families live in one house forever.

With divorce rates where they are and forever jobs long gone, so is the forever house for most. Just another advantage to renting when you factor in the additional transaction costs and hassles of moving when you own.

#228 Basil Fawlty on 09.22.13 at 5:16 pm

“The Fed does not print money. — Garth”

Bernanke was recently asked if the Fed was printing money and his answer was “Not literally”.

So, one can technically say that the Fed is not printing money, since they are actually digitally creating money out of thin air. If I am wrong on this could someone please tell us where the $85B per month is coming from?

#229 Musty Basement Dweller on 09.22.13 at 5:30 pm

#231 Basil Fawlty on 09.22.13 at 5:16 pmThe Fed does not print money. — Garth”

Bernanke was recently asked if the Fed was printing money and his answer was “Not literally”.

So, one can technically say that the Fed is not printing money, since they are actually digitally creating money out of thin air. If I am wrong on this could someone please tell us where the $85B per month is coming from?
——————————–
I really don’t know but aren’t the feds buying bonds up or something like that? That seems different than “printing money”.. Electronically or otherwise

#230 Daisy Mae on 09.22.13 at 7:52 pm

#214 Old Man: #209 Daisy Mae – you need to brush up on the many definitions of player…”

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

Well, okaaay. We’ll call it ‘libel’ – a written statement…”