Expert opinion

expert

So far this month, in the Kingdom of Ford (pop. 6,054,191) a total of 350 resale condos have sold. There are 7,453 currently for sale on MLS, and I hope you don’t own one of them. If this pace continues for the rest of October, we’ll have a 12% decline from the same period last year – and that month saw a painful 14% drop from the October before that.

Hmm.

In all of Nova Scotia yesterday there were 109 new listings. At the same time 100 other properties were reduced in price. Just 56 sold.

In Lethbridge, where total real estate sales last month were 21% higher than in September of 2012, but 10% lower than in 2011, Art snapped this picture. “I think you might like it,” he says.

Free Truck

In Montreal, the second-biggest real estate market in Canada, the average price increase for single-family homes last month was zero. The average condo declined 3%. Listings have ballooned to more than 30,000, and have been increasing now for 37 consecutive months. There’s a one-year supply of properties for sale.

Really?

On the hipster streets of DT Toronto, Cathy’s kept her eyes open. “I’m a regular reader of your blog and saw something that you might find interesting,” she says. “We rent in a loft-style condo building in the trendy area of West Queen West. For the last week or so, we’ve seen a table set up on the sidewalk with a representative from MorCan giving people free coffee, donuts, and mortgage information (see attached photo).

“Right away, this struck me as dubious. I mean, how much can you trust someone selling you something from a pop-up table? A mortgage! That’s hundreds of thousands of dollars. Yet I was surprised at how many people were stopping for information. On our way home tonight, we saw the table unattended and knew it was the perfect opportunity to take a picture and send to you.”

MorCan

Free trucks. Unloved condos. Bloated listings. Guys flogging sidewalk mortgages. Are you reading this, Phil Soper? Doesn’t sound like it. The boss at humungous real estate marketer Royal LePage has been working overtime lately trying to convince people the real estate correction is… over! Dig this, from the company’s current release:

Sales volumes surged in a number of regions, as Canadians re-entered the housing market after sitting on the sidelines for more than a year – marking the end of the most significant housing market correction  since the 2008-2009 global recession.

LePage, as you know, is a company that lives on hype, and does a great job of making astonishing numbers of people believe the improbable. (“Baby Boomers still Keen to Live in the Suburbs”). These days it’s on steroids, publishing a ‘survey’ (data supplied by local realtors) which doesn’t even pretend to be remotely scientific.

Our housing market turned a corner in the third quarter. Buyers returned to the streets in droves, resulting in a sharp increase in home sales.  In many cities, there simply weren’t enough properties on the market expect this positive momentum to continue through the all-important spring market of 2014…

See what I mean? It’s not a report. It’s a brochure. Good thing our eagle-eyed media saw fit to scrap it as a self-serving piece of corporate fiction. After all, the evidence surrounds us that housing is cooling, not boiling.

Oops. Wait a minute..

Strong house price gains in third quarter of 2013: CTV.
Was there a housing correction and no one noticed?: BNN News
Canada Emerges From “The Housing Market Correction No One Noticed.”: Toronto Star
City house prices continue upward movement: Star Phoenix
Balanced housing market conditions puts pressure on Regina sellers: Leader Post
Royal LePage records strong house price gains in third quarter: Winnipeg Free Press.

And then there are our friends at CREA, the official real estate cartel for Canada. This week the organization also pulled out the stops to ‘prove’ the housing market dip following F’s murdering of 35-year mortgages is now kaput. “The number of homes that sold last month was slightly above the 10-year average level of sales for the month of September,” reported the Globe, “indicating that the market has fully bounced back from the slump that ensued in the summer of 2012 after Finance Minister Jim Flaherty tightened the mortgage insurance rules.”

But is it so? And how does this square with the fact Toronto condo owners can’t get offers while mortgage brokers are selling pencils?

It doesn’t, at least to people who understand markets more than they do marketing. The number of sales to date across Canada is still running 2% below year-ago levels, and 2012 sucked compared with 2011. National Bank economist Marc Pinsonneault correctly points out any reported increases in sales now arises simply from the fact the market was cascading lower at this time a year ago. So much for Soper’s assertion that ‘buyers returned to the streets in droves.’

And the eggheads at Scotiabank’s economics department point out exactly what this pathetic blog has been saying (but with more verve): “Our view remains that sales are being brought forward at the expense of sales into next spring’s key market on mortgage interest rate concerns. As juicy mortgage rate commitments dating back to the early summer period face expiration, the options to purchase are being triggered before they expire and get reset higher.”

Buy a house if you really want one, can afford it, and your spouse will neuter you otherwise. But I sure wouldn’t call it an investment. Not with what’s coming.

129 comments ↓

#1 Devore on 10.15.13 at 9:02 pm

Phil should know better. Even the local REBs had September press releases with a decidedly subdued and cautious tone (given the apparently booming numbers), because they know August and September were actually hardly banner months, and more importantly, they know what’s coming in the rest of the year.

#2 T.O. Bubble Boy on 10.15.13 at 9:03 pm

In many cities, there simply weren’t enough properties on the market expect this positive momentum to continue through the all-important spring market of 2014…

hmmm… yes, listings tend to be down vs. prior years, but they aren’t counting the private listings!

any data related to days on market or listings is complete B.S.

#3 Sparky55 on 10.15.13 at 9:04 pm

“In all of Nova Scotia yesterday there were 109 new listings. At the same time 100 other properties were reduced in price. Just 56 sold”

Actually, 56 is a high number sold, most days it’s in the 20’s to 30’s.

#4 Kelowna Businessman on 10.15.13 at 9:13 pm

This is getting complicated. I keep watching for a solution to the debt ceiling problem and all I see are idiots. I keep seeing real estate prices in the GTA and Vancouver at insane levels. When is there going to be a correction? Will one ever come?

I sold most of my stocks about 10 days ago because the consequences of a ratings downgrade could be really bad – on the order of a 15% drop in the S&P, but if they solve the problem and re-open the government the upside might only be a couple of percent. I chose to go safe and sell. When they get it solved, I’ll jump back in, and hopefully while the market is still recovering.

If someone told you there was a 5% chance that your house was going to burn down in the next 10 days, would you do something about it? My advisers said, No, it will be Ok. Well… it’s not their money!

#5 Trader on 10.15.13 at 9:13 pm

What’s coming? You mean the crazies in DC who actually pull the trigger on the 45 cal stuck in the mouth of US Debt?
Unbelievable we are only hours away from a potential default.

#6 Mr. Reality on 10.15.13 at 9:19 pm

2013 was the suckers rally.

I cannot fathom how people have come to this point where they do not take money seriously anymore. I know a chick that just threw an extra 100k on her mortgage to buy a “better home” like it was adding sprinkles on a sundae.

WTF?

Mr. R.

#7 John on 10.15.13 at 9:19 pm

A guy who predicted housing bubble in US got Noble Nobel economics prize. Nobody listened to him before…

#8 visorman30 on 10.15.13 at 9:21 pm

Your last sentence is exactly the situation I’m facing. I’ve at least convinced her to wait it out for a few years but I told her that if she wants to buy then stop rationalizing it with “investment” arguments.

#9 chopper on 10.15.13 at 9:23 pm

I dreamt Garth last night, he came over to my home and I was telling him how the real estate cartel is the biggest liers around and the greater fools take every word the say as gospel truth without checking it out.

He was very polite and cultured and I kept thanking him for the blog and all the advice he gives for free.

It was nice meeting you in my dreams Garth, hope my dreams come through one day.
Cheers

You’re weirding me out. — Garth

#10 Smoking Man on 10.15.13 at 9:29 pm

Condos are insane expensive vs cost to build.

Just look at the foot print of a condo, then calculate the cost to build homes on that foot print say 10

now you can put 20 units x amount of floors.

600 sqt condo should not cost more than 100k tops with profit.

who in there right mind would ever buy one.

#11 Halifax Observer on 10.15.13 at 9:33 pm

I agree with #3 Sparky 55. Yesterday was an absolute Realtor dream in Nova Scotia. This has to be the worst year in a decade for housing in Nova Scotia. With the current economic fundamentals (non existent), I don’t expect things to get better anytime soon.

#12 drydock on 10.15.13 at 9:34 pm

http://www.theautomaticearth.com/Finance/nobel-winner-robert-shiller-demolishes-uks-help-to-buy-scheme.html

Robert Shiller explaining why home ownership not an investment.

#13 Bull Trap on 10.15.13 at 9:36 pm

I wonder if there is a cause of action against Royal LePage when the bubble pops and a buyer claims he was induced into the market by, as Garth aptly puts it, one of their brochures? Isn’t this negligent misrepresentation?

#14 Obvious Truth on 10.15.13 at 9:36 pm

#9

Think I heard Donny osmond sing that in Joseph. Was someone wearing a bakers cap?

#15 T.O. Bubble Boy on 10.15.13 at 9:39 pm

@ #8 visorman30 on 10.15.13 at 9:21 pm
Buy a house if you really want one, can afford it, and your spouse will neuter you otherwise. But I sure wouldn’t call it an investment. Not with what’s coming.
Your last sentence is exactly the situation I’m facing. I’ve at least convinced her to wait it out for a few years but I told her that if she wants to buy then stop rationalizing it with “investment” arguments.
———————————-
Same here – thankfully, my wife agrees that we’ll only buy a place in cash, and only if it is 50% or less of our net worth (we’re in our 30’s). In the meantime, our rental house in prime Toronto keeps looking better and better.

#16 AngryMan127 on 10.15.13 at 9:39 pm

Maybe the indicator was on 10/10/13: “I was wrong” where Canada’s most famous RE bear ‘capitulates’.

Hope you noticed what the capitulation was about. — Garth

#17 shane on 10.15.13 at 9:41 pm

Garth, what’s coming??

#18 BMO says...l on 10.15.13 at 9:43 pm

According to BMO (see http://www.bmonesbittburns.com/economics/econofacts/20131015a/econofacts.pdf):
“Cdn Housing Rebound Continues… The Bottom Line: Any worry about a hard landing in Canadian housing has quickly become a faint memory…”

#19 Obvious Truth on 10.15.13 at 9:48 pm

Housing story has been half written. Now it will be about those following it down trying to predict the bottom.

Can’t claim victory yet Garth as your realtor fans will keep saying we won’t take back 2 years of pricing.

I say straight line to 07 and we see from there. This with the lowest rates in history. Wow.

#20 Canadian Watchdog on 10.15.13 at 10:00 pm

CREA non-seasonally adjusted YTD sales as of September

By Province

3.1%__British Columbia
8.5%__Alberta
-4.4%__Saskatchewan
-3.0%__Manitoba
-1.1%__Ontario
-8.6%__Quebec
-1.8%__New Brunswick
-13.8%__Nova Scotia
-10.1%__Prince Edward Island
-9.9%__Newfoundland & Labrador
-0.9%__Northwest Territories
-10.6%__Yukon
-1.1%__Canada

By City

-6.4%__Fraser Valley
6.5%__Vancouver
0.1%__Victoria
11.5%__Calgary
9.1%__Edmonton
-9.5%__Regina
1.0%__Saskatoon
-1.4%__Winnipeg
1.0%__Hamilton-Burlington
3.7%__Kitchener-Waterloo
-3.6%__London and St Thomas
-3.5%__Ottawa
-2.7%__St. Catharines
-7.2%__Sudbury
-0.3%__Thunder Bay
-1.8%__Toronto
5.1%__Windsor-Essex
-8.9%__Trois Rivières
-10.4%__Montreal  
-8.7%__Gatineau  
-13.2%__Quebec  
-16.9%__Saguenay  
-7.0%__Sherbrooke  
-1.0%__Saint John
-19.0%__Halifax-Dartmouth
-9.9%__Newfoundland & Labrador

Mind you, this is the best the market can do with the lowest mortgage rates on record in H1. Watch for sales to fall off a cliff starting in November as CMHC MBS issuance for deadbeat borrowers is all dried up.

Real estate services are becoming part time jobs.

#21 FATHER on 10.15.13 at 10:03 pm

Garth if the us defaults on Thursday and reach a agreement next week would that still be bad?

#22 Ralph Cramdown on 10.15.13 at 10:05 pm

#12 Bull Trap — “I wonder if there is a cause of action against Royal LePage when the bubble pops and a buyer claims he was induced into the market by, as Garth aptly puts it, one of their brochures? Isn’t this negligent misrepresentation?”

I don’t think so. If the selling agent said it, then maybe. If the selling agent’s brokerage said it, then maybe. But a national master franchise which licenses the right to use its name to local brokerages? Too remote. It’s like Smith says (to nobody in particular) that all Dodge Neons are great cars, and you buy a Neon from Jones. Can you sue Smith? You won’t win.

Now Brad Lamb and his brochures promising triple digit returns are on much thinner ice, if you buy something from his brokerage.

#23 Freedom First on 10.15.13 at 10:10 pm

#9 chopper…..sad but true about the majority. Proven true through history, as well as in recent history world wide. The dream part…..you’re wierding everyone out:)

Nice post Garth!

If people are getting nervous with their financial affairs
right now, they are out of balance. I read somewhere before that “cash is trash,(except prior to the GFC)”. Warren Buffett saying: “cash is like oxygen, you always want plenty of it around”. For me, I like a nice cushion at ALL times. And, it comes in real handy when things are “On Sale”. Also worry is like a rocking chair, it will occupy your time, but it won’t get you anywhere. Out of balance, and leveraged to the hilt? Nothing, and I mean nothing, is worth it. But, peace of mind? Priceless.

Reading Garth’s blog, I can see he is worried for the average Canadian family. And he showed that when he was in Gov’t too. However, another thing I notice is that Garth is not stressed out about his own personal finances. We are in the eye of the hurricane right now, the same hurricane that hit the rest of the world already. Bubbles always expand, and right until they burst, few can even see the prick coming. No exception. Never be vulnerable. Freedom First.

#24 Ralph Cramdown on 10.15.13 at 10:17 pm

#4 Kelowna Businessman — “This is getting complicated. I keep watching for a solution to the debt ceiling problem and all I see are idiots.”

There’s no shortage of idiots, but an analysis requires game theory. The executive can’t say that it will ignore congress and pay all debts, otherwise congress would just collapse into (even more) acrimonious outrage. But I think one way or another, those debts will be paid. My fantasy involves the executive ordering the arrest of the Speaker of the House and the Tea Party rump and holding a vote with the remainder, but there’s several other options.

#25 economictsunami on 10.15.13 at 10:19 pm

Google Nobel Prize for Economics; it doesn’t exist.

It is not associated with the Nobel Foundation but issued by the central bank of Sweden.

Not that the MSM does fact checking any longer…

#26 Freedom First on 10.15.13 at 10:23 pm

#10 Smoking Man

Yes. Who in their right mind would buy one? However, condos are excellent, and the more that are built the better, for the fact that they supply renters with the subsidized affordable housing needed to enjoy life while increasing their net worth. Of course, that being said, the wealthy renters right now will only buy a place if it fits their lifestyle, and it is cheaper than renting. There is a reason that the wealthy are the minority. Being good with #’s is a good start.

#27 45north on 10.15.13 at 10:29 pm

So far this month, in the Kingdom of Ford (pop. 6,054,191) a total of 350 resale condos have sold. There are 7,453 currently for sale on MLS, and I hope you don’t own one of them.

so at that rate it will take 21 months to clear. A balanced market is 6 months. Royal LePage may say everything’s okay but the Royal Bank knows its not. Definitely not.

Mr. Reality: I know a chick that just threw an extra 100k on her mortgage to buy a “better home” like it was adding sprinkles on a sundae.

you mean she increased her mortgage by 100k.

well I’m having a moment like Garth:

Surely most people would understand cheap interest rates were a tool for paying off debt, not gorging on it. Surely they’d know putting all of their wealth in a single asset at one address on one street was a danger. Surely the Boomers would realize what they need for the rest of their lives is income, not a mortgage or a media room. And surely the young would cherish mobility and freedom, over condo fees and chains.

#28 Don on 10.15.13 at 10:30 pm

Garth.

You were the target in the comments section of cbc and the globe and mail and I am sure the other two Vancouver wannabe NEWS papers.

If people were so positive in there false outlooks they wouldn’t have a reason to spend time slagging you. Must be tough for them to see people walking by their windows with no one biting on real estate. People are starting to sober up, you can see it in their eyes.

Things are slOW in retirement ville on Vancouver Island and the retirees are the ones with cash. People starting to stress out as the once promise of ever lasting yoy gains are coming to an end.

But for some good news:

My younger friends who just moved out to Red Deer, Alberta just informed me that they wouldn’t be buying a house out there, they will sit and wait to buy in their final destination. They saw the benefit of mobility in the short term. I have been preaching and brother they finally saw the light. Two more souls saved from the slimy Cartel.

Real estate is a lot like fishing, the fish can be swimming by your hook but not bite and that’s the case the fisherman

#29 Don on 10.15.13 at 10:32 pm

fisherman…goes home hungry and sad.

#30 Notta Sheeple on 10.15.13 at 10:34 pm

“….Good thing our eagle-eyed media saw fit to scrap it as a self-serving piece of corporate fiction….”
=========================

Maybe the prostituted media are finally shedding their arm-twisting REALTURD® pimps, realizing that publishing the truth for a change just might sell newspapers:

http://m.theglobeandmail.com/globe-investor/personal-finance/mortgages/preet-banerjee-sold-his-house-and-rents-why-he-couldnt-be-happier/article14740574/?service=mobile

http://m.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-buying/why-preet-banerjee-is-choosing-renting-over-buying/article11260888/?service=mobile

#31 recharts on 10.15.13 at 10:38 pm

http://www.greaterfool.ca/2013/10/14/what-to-really-worry-about/#comment-266309
Garth, you probably quoted this in your article , but your numbers don’t add.
The below are for Toronto condo sales:
MTD OCT2013 : 350
Estimated sales for OCT 2013: 850
OCT 2012: 1141

850/1141=0.74 (26% down)

What am I missing?

#32 James Bond in Goldfinger on 10.15.13 at 10:38 pm

If there is no doom and gloom for the economy and that’s why gold is suffering, why would real estate be any worse. So long as people have jobs and making mortgage payments all is good. The fact they have no savings and will not for retirement is just their problem.
I don’t see another housing pull back until 2016, by that time prices could rise another 30%, seems surreal but in these crazy times anything is possible.

#33 Inglorious Investor on 10.15.13 at 10:39 pm

What drives Canada’s housing market today?

Supply and demented.

#34 Snowboid on 10.15.13 at 10:40 pm

In the meantime, Kelownas’ favourite dynamic duo are reporting all is rosy from the sunny Okanagan in British Columbia, Canada:

http://wolfhomes.com/blog/

Update from the land of sun, sand, and scorpions:

Based on some comparable sales near us, the neighbourhood values for homes like ours are up 45% since 2010 – bubblicious?

I hear the US economy is tanking, but no sign of it on our trip down or in Phoenix. Hotels were full, restaurants are packed, and the lineups at the local dept. stores are long – malls are crazy.

This despite many snowboids still stuck up north.

It was tough filling up the car (only saved $ 41 from Kelowna), the 750 ml Smirnoff almost blew our budget at $ 7.49 – and a gallon of milk is still an outrageous $ 1.89.

Only downer is the recent daily highs are a bit below normal at 28-30C.

We love our winter retreat, and again must thank the Revered Professor for making this all possible.

#35 live within your means on 10.15.13 at 10:44 pm

#9 chopper on 10.15.13 at 9:23 pm
I dreamt Garth last night, he came over to my home and I was telling him how the real estate cartel is the biggest liers around and the greater fools take every word the say as gospel truth without checking it out.

He was very polite and cultured and I kept thanking him for the blog and all the advice he gives for free.

It was nice meeting you in my dreams Garth, hope my dreams come through one day.
Cheers

You’re weirding me out. — Garth
…………………………..
I needed a good laugh.

#36 Inglorious Investor on 10.15.13 at 10:44 pm

#28 Don on 10.15.13 at 10:30 pm
Garth.

“They saw the benefit of mobility in the short term.”

Mobility will be a key factor in the years ahead. Home ownership is anathema to mobility. As is a huge mortgage. The young will figure this out. The old? Lots of reverse mortgages.

The banks taketh, and the banks taketh some more.

#37 Tony on 10.15.13 at 10:48 pm

Re: #4 Kelowna Businessman on 10.15.13 at 9:13 pm

Jump back in 40 years from now when stock valuations finally reach present day valuations. There was the 29 to 54 era the 68 to 82 era and the 2013 to 2053 era.

#38 deaner on 10.15.13 at 10:54 pm

Re: Schiller Nobel prize

Yeah, someone should do a Canadian version of his beautiful chart of RE prices from 1800s to today that disproves several correlations at once… assuming we could get reliable data.

#39 4 AM Sunrise on 10.15.13 at 11:03 pm

MSM reported today that the construction industry is scrambling to recruit qualified tradespeople. But if real estate is in decline, what on earth are these much-needed tradespeople building?

Condos sold three years ago. — Garth

#40 Smoking Man on 10.15.13 at 11:08 pm

#26 Freedom First on 10.15.13 at 10:23 pm

I don’t know any wealthy renters. Depends how you define it. I almost bought a huge house on the Niagara river on grand Island NY. 400k in maskoka it would go for 2 million, and a 3 hour drive. IT had enough dock to have 10 boats.

I snapped out of it, my cottage, centre suite is free, comes with maid service, free booze, and can smoke anywhere on the property I like. Entertainment, shows all free.

My Seneca cottage can’t be beat. Next summer got a slip for 500 bucks. At boomers little marina.

Why take out 400k out of play.

Logical to me. Mind you, I bet good. Universal Conciseness Consolidator.

Pnl up two years in a row, at the house of the rising sun.

#41 [email protected] on 10.15.13 at 11:21 pm

Ok so there will be no us default. Part of the agreement will be austerity measures except no one will call it that.

Things to go.
-Social Security
-Food Stamps
-health care
-Military Spending since middle east is in a happy place
-recovery back into recession

is this how it will unfold?

#42 Ralph Cramdown on 10.15.13 at 11:26 pm

#40 Smoking Man — “I don’t know any wealthy renters.”

Is that because you don’t ask obviously wealthy people whether they rent, or because you don’t ask obvious renters whether they’re wealthy?

#43 Smoking Man on 10.15.13 at 11:33 pm

My FX buddies, all over MSM Canadian dollar only worth 88 cents vs USA.

UCC is telling me Sell USDCAD.

It’s in play.

I SHOULD CHANGE MY NAME TO SANTA

#44 ripped on 10.15.13 at 11:41 pm

My post on Bob’s blog…

How come my posts don’t make it to print? I know I’m not bashing Garth which is a free ticket to print but come on? I asked a simple question to Mikey the realtor… Should I take the plunge now?

#45 ValleyBoy on 10.15.13 at 11:55 pm

I hope I find everyone in good spirits.
Here is a video explaining this scam of a monetary system that we are all in. Helps explain allot about why we actually are getting poorer, and the debt ceiling bs.

http://www.hiddensecretsofmoney.com/videos/episode-4

This is why I believe most gold bugs also can’t understand Garth. He tries to inform the public about finances and protect the the average Joe from a major correction in housing. But participates in a system which is a unfair to the majority of people and protects the ultra wealthy. Nothing against Garth or anyone else we all need to awaken and change the system sooner than latter.

Take care

#46 sheane wallace on 10.16.13 at 12:11 am

If the experiments with the currency creation in certain western democracies continue god knows what is going to happen.

With manipulated commodities, stock and bond markets the house prices can keep going for a while specially in countries like UK and Ca where Real estate is the primary engine for the economy.

Most likely outcome in such cases historically has been total collapse of the markets along with the currencies but god knows what is going to happen in short to mid term.

I would not be surprised if kicking the can down the road continues for a while and the real estate prices actually keep going up.

These are not normal markets and not normal days, when the day of reckoning comes it could be epic.

Watch the bond market, the 10 years treasuries yield.

#47 Son of Ponzi on 10.16.13 at 12:16 am

#40 Smoking Man “I don’t know any wealthy renters”.
Hugh Hefner rents his Playboy Mansion for $100 a year.

#48 sheane wallace on 10.16.13 at 12:18 am

The capital miss allocation that comes with the manipulated markets could kill the long term viability of the economy, once we burn all the capital that fuels the economy than watch out.

Currently economy is driven by consumption fueled by negative interest rates, this results in consumption of capital. Once it is gone…
What remains is stocks, real estate, gold (it did very well today)

#49 juno on 10.16.13 at 12:18 am

Was listening to CKNW today. Cameron was on saying sales up 12% are up better than ever and prices up 9%

By my account that should mean we should now be close to 85% to 95% ownership by his figures. Go figure. This is preditory lending by CREA. Who’s worst bernie Maddolf or Cameron.

When the sh%t hits the fan I hope Cameron gets place in a Siberian prison camp

#50 dienekes on 10.16.13 at 12:21 am

Number of homes for sale in Saskatoon jump 27percent yoy in September. I thought there was a shortage?
Everybody and there dog is a builder in Saskatoon.
Many of the dogs are also realtors, looking at the realtor photos.
Question: In the realtor photos beside their featured houses, why does the realtors assume a pose that makes them look like they are taking a Crap?? Just go on point2 and search Saskatoon listings. They either pose like they are taking a crap ( back half thankfully out of camera shot) or they stand with there arms crossed self satisfied that they completed their crap.

#51 VanPerfecto on 10.16.13 at 12:40 am

Looks like money is pouring into Vancouver. Sales Up. Prices Up. The last safe haven?
http://www.theglobeandmail.com/news/british-columbia/bc-housing-market-makes-big-recovery-from-2012-slump/article14883231/

#52 Blog Dog formerly known as Carney on 10.16.13 at 12:46 am

“Surely most people would understand cheap interest
rates were a tool for paying off debt, not gorging on it. ”

And just WTF was I saying???

#53 Carpe Diem on 10.16.13 at 1:02 am

We have been renting for 3 years.

The first rental was a learning experience. Close to mega-farms … not cool. The amount of chems they pour on the land is scary! And all that to feed the cows who produce milk … be afraid …

We then moved/rented a Tudor Manor on 3 acres. It was good. Good neighbors. But crazy price to heat.

A busy, rural street away we found out next rental. Price was $600 less per month. That equates to our 3 kids’ RESP per year.

What a deal!

Plus … this place is smaller but much better to live in.
Nicer street, forest as a yard, and the neighbors seem to be more fun!

I think, after this rent, we will buy in this area. I hope for less than the boomers are asking.

If not, maybe I will keep renting.

#54 hurtin albertan on 10.16.13 at 1:22 am

Gettin down on the mountain…

Alberta roots musician Corb Lund selling his Edmonton house:”@CorbLund: wanna buy my house? gotta move south for family. AWESOME garage!! wrote most of my last album here. sad to go. http://t.co/KIExCtU2QW

#55 IB on 10.16.13 at 4:27 am

http://ca.finance.yahoo.com/news/condo-buyers-struggle-adjust-borrowing-rule-changes-001722612.html

“Condo buyers struggle to adjust to borrowing rule changes”

Recent changes to mortgage rules in Canada have left some condo buyers unable to afford their purchases, say professionals who are watching some clients struggle to hang on to their future homes.
For years, buyers have been pre-approved for mortgages for units in Toronto buildings before shovels are even in the ground. But new federal rules on borrowing means new realities for people who thought they got the green light.
“In the past four years, the amortization [period] has gone down from 40 to 25 years,” mortgage broker Jake Abramowicz told CBC News in a recent interview.
“As a result, suddenly that pre-approval [buyers] had in 2009 is no longer valid. They will either need to have more income or more down payment.”
If buyers are unable to make the necessary adjustments, they could face losing their deposit.

“If the market conditions are not the best and the builder has to put the property on sale again and if the purchase price is lower than the price that you purchased, then the builder has the right to sue for the difference,” she said.
Industry professionals say they don’t believe that defaulting on pre-approved mortgages is a widespread problem. But with thousands of units reaching completion in the coming year, there is potential for the problem to grow.

#56 Buy? Curious? on 10.16.13 at 5:39 am

You know what the sad thing about these numbers? It only takes a few morons to be convinved into buying a place and it makes housesprices prices inch up. And thank any make-believe deity in the sky for that! I mean, if someone is stupid enough to buy over asking for a place on our street, right on! “Hey! We’re having party at Pavindeer’s place next Saturday. Why don’t you invite your wife to come along.” It only sets the historical price trend for the street that will make it harder for people to buy in to. Look at Canadian Watchdog’s numbers in his (or hers) post today. Ontario and Toronto are only down 1.8% and 1.7% repectively. Well ladeeda! What a disaster. *yawn* I can’t wait until these condos start crumbling in the next 10 years and condo boards are going to have lay down Special Assestments on the owners. You’ll see a mad rush for SFH’s and that coincides with my retirement plans.

Sometimes I’m amazed at how lucky I am to given brains.

http://www.youtube.com/watch?v=0iyeUcFKRv4

#57 ripped on 10.16.13 at 6:35 am

Singapore Shows Asia How To Crack Down on Housing Bubble – Oct 16, 2013

Singapore, the city-state that banned chewing gum to curb litter, is showing the rest of Asia how to cool a housing bubble.

The government this year ramped up efforts to bring down property prices that surged to a record, adopting some of its strictest measures, including a cap on debt at 60 percent of a borrower’s income, higher stamp duties on home purchases and an increase in real-estate taxes. Mortgage payments were capped at 30 percent of gross monthly incomes. The combination and timing of the curbs is the most comprehensive among governments battling housing bubbles, according to Vishnu Varathan, an economist at Mizuho Bank Ltd.

Home prices in Singapore have gained 33 percent since 2009

#58 Ralph Cramdown on 10.16.13 at 7:11 am

#45 ValleyBoy
#46 sheane wallace

Gee, two goldbugs whose command of written English is painful to see.

Maybe your talk about everyone getting poorer would be better aimed at a workingman’s club or some such? People here are trying to get richer and some are succeeding.

Getting poorer? When I was a lad, cars lasted about five years or 100,000 miles, after which they turned into big smudges of rust. They consumed a lot of fuel and weren’t very safe. A ‘mobile phone’ was one with a 20′ extension cord, allowing the user freedom to roam up to 20′ from the wall jack, and we all made our long distance calls before 8AM or after 6PM to save coin. A could go on and on, but suffice to say that “we are all getting poorer” only works on addlepates.

If you really believe there’s a conspiracy against the masses, consider that it may be in selling them gold, that the rich may buy up the stock of the car companies and the telephone companies for less. 10,000 goldbug sites, all exhorting you to put all the money you can into the shiny metal? Who’s being played? I don’t think you’re rich enough to start coasting and worrying only about protecting your pile from the ravages of inflation. Get those dollars out on the street working for you.

#59 recharts on 10.16.13 at 7:36 am

#58 Ralph Calmdown

What is happening here:

Gee, two goldbugs whose command of written English is painful to see.

Maybe your talk about everyone getting poorer would be better aimed at a workingman’s club or some such? People here are trying to get richer and some are succeeding.

How it is actually done

and we all made our long distance calls before 8AM or after 6PM to save coin.

#60 Apocalypse 2013 on 10.16.13 at 7:59 am

The Apocalypse starts today. We are all doomed.

U.S. government downgraded and in default by midnight.

In spite of what many would see as common sense, the Tea Partiers will find ways to obstruct and delay. Then events and unforeseen consequences will take over, spiralling out of control while commentators comment.

Countries not fond of the U.S. will shortly see their openings, and take advantage.

Expect at least two major (and useful) international distractions for the U.S. government, possibly war with Iran and Syria, by early 2014.

Nuclear threats and likely at least one detonation.

Russia will get involved. This won’t be good.

Catastrophic layoffs by December in the U.S. and by February in Canada. Growth gone and all sectors, real estate and gold too, in rapid decline.

Homegrown terrorism will shock us all by March.

And our fearless leader, Mr. Harper?

He’ll be focussed on letting you pair The Food Channel and The History Channel on your cable bill, so you can watch our demise in real time and learn which canned beans to stock up on in your cellar.

A world historical moment is upon us. We are all powerless to stop it.

Mature viewing only.

#61 Ferrari321 on 10.16.13 at 8:17 am

@#27 – those are mid-month numbers – so you would have to double those numbers to get your Inventory/Sales ratio.

#62 jaguar on 10.16.13 at 8:17 am

Ross Kay being quoted on the real estate frankennumbers on the CBC radio this morning here in Calgary. Doubt it will wake people up in the city of excess where most are in the real estate market with both feet. Here we are in mid October and no decision on the Keystone XL. When that decision comes down it might send a chill through the city.

#63 Julia on 10.16.13 at 8:21 am

I live in a non-luxury apartment building in a really nice part of down town TO. Yesterday the building management decided to replace our bathtub, tiles, pipes (including sink drain pipe), faucet, the whole nine yards. We didn’t even ask for it! As a former house owner and landlord myself, I know how expensive this work was even if the tiles, hardware and tub were not the highest end materials. The plumber worked for nine hours straight. Today i have a new bathroom. They had already replaced the sink and toilet a few years back. All new, no stress, no cost.
Renting is not too shabby!

#64 David W on 10.16.13 at 8:27 am

Garth,

This question has been asked time and time again, when will this correction happen, by how much, and when will be okay to buy again. If you don’t know, gather up some bright economists (if such a thing exists) and figure it out.

#65 economictsunami on 10.16.13 at 8:34 am

The story of the non Nobel Prize…

The Nobel Prize in Economics? There Is No Nobel Prize in Economics:

http://exiledonline.com/the-nobel-prize-in-economics-there-is-no-nobel-prize-in-economics/

An oft told lie ‘appears’ to become the truth…

#66 Ralph Cramdown on 10.16.13 at 8:55 am

#59 recharts — “[…] get richer […] save coin […]”

Saving coin is necessary, but generally not sufficient. It’s the obvious way to get a grubstake if you start with none. True wealth is made using the exponential power of compound growth.

#67 mike m on 10.16.13 at 9:09 am

Yesterday I was browsing the Property Guys site and was shocked at how many little blue dots were scattered on the map. MLS is sneaky, they always say ‘too many record, narrow your search’. I can never get a real sense of how many houses are on sale in my area.

Speaking of ‘my area’, I’m in Kitchener and the 2 bedroom 2 bathroom apartment I’m renting is ‘on-sale’ for $249,000, and has been since spring. The whole area is under development and I guess the owners hope to sell these asap before their buyers choose a brand new condo instead. This area is exploding with construction. Across the street from me, town houses which are $263,000 were all sold out before they were finished.

#68 Stoopid Idiot on 10.16.13 at 9:15 am

Apocalypse 2013
Today… tonight, when ever as it may happen. This will only be the thirty third consecutive increase to the debt ceiling…. This can go on forever. Debt, like modern art is priced in modern money…. Ralph, remember when a million dollars was actually a lot of money? You could buy ten homes (or one and nine houses). Your inability or frustration with failing to appreciate the hidden tax of inflation should not be taken out on us Gold bugs… My gold is only part of my risk matrix and content of what I deem diversification to a balanced portfolio. If you need help I would recommend you read Ellen Brown’s book “Web of Debt” I would be more than happy to buy it for you if you’ll read it.

http://www.amazon.ca/Web-Debt-Shocking-Truth-System/dp/0979560888/ref=sr_1_1?ie=UTF8&qid=1381929079&sr=8-1&keywords=web+of+debt

#69 Holy Crap Wheres The Tylenol on 10.16.13 at 9:35 am

#40 Smoking Man on 10.15.13 at 11:08 pm
#26 Freedom First on 10.15.13 at 10:23 pm
I don’t know any wealthy renters. Depends how you define it. I almost bought a huge house on the Niagara river on grand Island NY. 400k in maskoka it would go for 2 million, and a 3 hour drive. IT had enough dock to have 10 boats.
I snapped out of it, my cottage, centre suite is free, comes with maid service, free booze, and can smoke anywhere on the property I like. Entertainment, shows all free.
My Seneca cottage can’t be beat. Next summer got a slip for 500 bucks. At boomers little marina.
Why take out 400k out of play.
Logical to me. Mind you, I bet good. Universal Conciseness Consolidator.
Pnl up two years in a row, at the house of the rising sun.

………………………………………………………………………

Smoking Man I have an American friend who lives on Grand Island, we are friends through business. When I read you are at Boomers Marina It has to be Chute Marine off of Buffalo Ave. My boating buddy parked his boat there for a few years. We meet up once a year on Lake Ontario and then the next year on Lake Erie. The wives have become quite friendly as well. One word of caution Smoking Man you are precariously close to the edge of the falls on the Niagara River. Do not try anything foolish on this section of the river if you ever boat it. I have to say Lake Erie is actually much nicer than my section of Lake Ontario here in Oakville. They have great long sandy beaches, you would swear you were in Florida. By the way Chutes Marina is right beside the Love Canal. Don’t drink the water.

#70 Obvious Truth on 10.16.13 at 9:38 am

Apocalypse 123

Isn’t this whole apocalypse stuff science fiction. Isn’t there a movie we could watch.

How clear is it that the extreme right is enjoying the publicity. On cnn all day long. That’s their win. And of course the will go past Thursday. Again they can do their raw raw thing for reelection. Look at us. We beat the president.

Politics is too predictable. Again market is looking for more spending. Real republicans know this. They have to be elected too. If they don’t spent democrats will win the house. Tea party could care less about that.

Volatility by futures traders yes. Political drama yes. Great cnn ratings yes. Sci fi no. Go for a walk and see the colours. Watch the geese. Maybe put a canoe in one of our great bodies of water. They’ll be there tomorrow just as sure as the politicians will.

I’m beginning to think that nobody played board games like monopoly, clue, guess who or cards when they were young. Even trouble teaches you to manage risk. Come on. Where are the young people on this blog.

Ask questions. Read good authors. Our host. Play board games.

Investing is fun. There are no secrets. Even warren buffet plays with an open hand. He’s not worried. When you do your reading and homework nobody can scare you.

#71 Ralph Cramdown on 10.16.13 at 9:53 am

#65 economictsunami — “The Nobel Prize in Economics? There Is No Nobel Prize in Economics”

Well ET, every day I try to learn something. So today, I read your link, even though I already knew that the economics prize wasn’t one of the originally established Nobel Prizes. I did some research.

The gist of it is a man who accumulated a large fortune by inventing, manufacturing and selling new and improved ways for man to kill his fellow man en masse decided, near the end of his life in 1896, to establish a fund to award prizes annually for achievements in Physics, Chemistry, Literature, Peace and Medicine. 94% of his estate went into the fund, and the trustees he appointed weren’t family members.

“The Prize in Economics, as it is referred to by the Nobel Foundation, was established and endowed by Sweden’s central bank Sveriges Riksbank, in 1968 on the occasion of the bank’s 300th anniversary, in memory of Alfred Nobel.”

So your thesis is that we should respect to the letter the original intentions of an arms merchant who’s been dead 117 years, or perhaps the will of his descendants, whom he blessed with 6% of his fortune and no involvement in the administration of the Prize fund? Curious. Ah yes, it’s some vast conspiracy to give economics the patina of scientific legitimacy that comes
with sharing the stage with an award for literature.

N.B. Rather than worry about what old Alf would or wouldn’t have wanted, best to expand your mind by reading the output of this year’s “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” winners, Eugene Fama, Lars Peter Hansen and Robert J. Shiller. I admit to not having read Hansen, but I was amused to discover that I was reading one of Shiller’s works, and likely one that the prize award was based on, the evening before the awards were announced. Too bad I’m not more well-rounded — maybe I’d have been reading Alice Munro.

#72 live within your means on 10.16.13 at 10:39 am

#63 Julia on 10.16.13 at 8:21 am
I live in a non-luxury apartment building in a really nice part of down town TO. Yesterday the building management decided to replace our bathtub, tiles, pipes (including sink drain pipe), faucet, the whole nine yards. We didn’t even ask for it! As a former house owner and landlord myself, I know how expensive this work was even if the tiles, hardware and tub were not the highest end materials. The plumber worked for nine hours straight. Today i have a new bathroom. They had already replaced the sink and toilet a few years back. All new, no stress, no cost.
Renting is not too shabby!
……………….

I’m fortunate that my DH is extremely capable in carpentry, electrical, plumbing, mechanics, IT, etc. He does a better job than most specialists. We opened up several areas of our main living area. I designed parts of it using an old program & he used AutoCAD for the final version. He was an expert in it years ago.

The way our house was built we can remove any wall on the main level. Hubby built all cabinets in the dining & kitchen area, held on by a V shaped piece of wood on the walls which he made. He made all kinds of drawers for me to hold pots & pans, etc. I designed one wall in the living room – fireplace with shelves on either side. Her did it & installed the granite around fireplace plus hearth & oak around it to match our oak floors.

Two summers ago, while I was away he put down wood floors in the rest of the house. A few yrs ago he totally redid 2 bathrooms in the house. It took me almost 2 yrs to find what I wanted for the best price. I do regret a couple of purchases – The 3/6 litre Caroma toilets I bought.

#73 recharts on 10.16.13 at 11:13 am

#59 recharts — “[…] get richer […] save coin […]“

Saving coin is necessary, but generally not sufficient. It’s the obvious way to get a grubstake if you start with none. True wealth is made using the exponential power of compound growth.

let’s get less particular on grammar and language and let’s look at what matters.
To give you an example, all those senators with arguable expenses should be in jail and they speak perfect English. And they are at the top of the hierarchy. And they play with words as you did above.

I hope that you realize that speaking a worse English condemns most of us to real productive work with palpable results as opposite to some locals who talk you into buying real estate or write about it in newspapers… in perfect English though !

#74 recharts on 10.16.13 at 11:24 am

Use your brain. Restrict the search by using different categories of dwellings, by using price ranges and by using user defined areas for searching. top-Left side of the menu. Add the numbers at the end

On top of that if you look at the top right side of an MLS search it is going to tell you the actual number of properties returned by the search even if you get a message saying “your search returned too many results”

Yesterday I was browsing the Property Guys site and was shocked at how many little blue dots were scattered on the map. MLS is sneaky, they always say ‘too many record, narrow your search’. I can never get a real sense of how many houses are on sale in my area.

Speaking of ‘my area’, I’m in Kitchener and the 2 bedroom 2 bathroom apartment I’m renting is ‘on-sale’ for $249,000, and has been since spring. The whole area is under development and I guess the owners hope to sell these asap before their buyers choose a brand new condo instead. This area is exploding with construction. Across the street from me, town houses which are $263,000 were all sold out before they were finished.

#75 happity on 10.16.13 at 11:34 am

The USA debt ceiling actors guild will soon be over with USA stocks blowing higher and garth declaring the USA economic renaissance is back in full swing despite the punking by the fed taper.

Interest rates will not rise despite the grey hair earned by the interest rate prophets, and Canadian real estate will not tank, but solace will be taken by bashing gold.

However, the general population will always know sum tin sum tin in the financial system just don’t add up and into 2014 things will continue to progress negatively for them bit by bit day by day.

#76 AndrewAB on 10.16.13 at 11:40 am

#44 Ripped

FirstplaceBob’s blog is the purgatory for those banned from this blog.

DO NOT take that blog seriously.

Better yet ignore it completely, like everyone else does.

#77 Glen on 10.16.13 at 11:42 am

The average selling price for October mid-month transactions was $536,301 – up 7.3 per cent compared to the first 14 days of October 2012.

Insanity keeps going on. Unreal

#78 Ralph Cramdown on 10.16.13 at 11:50 am

#68 Stoopid Idiot — “Your inability or frustration with failing to appreciate the hidden tax of inflation should not be taken out on us Gold bugs…”

Look, inflation is only a “hidden tax” to those who don’t read beyond the sports pages in their daily newspapers. The central banks have been VERY clear about their inflation targets and their willingness to achieve them, and monthly inflation numbers are widely reported in the popular press. I have to reinvest five figures a year just to stay even in the family portfolios, so I don’t need a lecture. Inflation is the current which I must swim against, every day.

My frustration is that gold bugs cite inflation as a reason to hold gold, which nominal price has declined 33% in the last two years. It doesn’t matter whether you think recent inflation has been a) moderate, b) low or c) very low, the plain fact of the matter is that gold has only held its value against flat screen TVs and the Venezuelan Bolivar.

Don’t get me wrong; I think gold can sometimes be a good investment. When everyone’s sick at the thought of owning the stuff, and your time horizon is a decade or two, it can be a buy. We aren’t there yet; there’s no sign of capitulation from the goldbugs, and the “We Buy Gold” storefronts haven’t even gone out of business yet.

If you need help I would recommend you read Ellen Brown’s book “Web of Debt”

Nope, sorry. Any book with a blurb saying “Then it explores a workable alternative, one that was tested in colonial America and is grounded in the best of American economic thought, including the writings of Benjamin Franklin, Thomas Jefferson and Abraham Lincoln” is a book for boneheads, by boneheads. When I want advice on 18th century statesmanship or 19th century warfare, I’ll turn to those three. For 21st century economic advice, I won’t unless you can resurrect them and put them through a top ranked school of economics. They were all three of them great thinkers, but the peculiar American habit of assuming that because a man was great in his time, his advice is timeless IS AN AFFLICTION.

#79 Who let the pigg out ? on 10.16.13 at 12:08 pm

http://www.thestar.com/business/real_estate/2013/10/16/hot_housing_market_expected_to_cool_through_winter.html

Sales had slumped so badly by last fall that transactions in September of 2012 dropped to the lowest levels seen in a decade, noted CREA economist Greg Klump. That’s making this year’s sales look even better by comparison.

The average price of homes sold last month in Canada was $385,906, up 8.8 per cent from the same month in 2012. But, that number was also driven up by an unexpected increase in interest rates, starting last May, that contributed to a significant spike in sales in major markets such as Toronto, Vancouver and Calgary.

Those cities saw a surge in buyers, armed with 90- and 120-day commitments for mortgages as low as 2.89 per cent, frantically trying to jump into the market before their low rates ran out and they were forced to renegotiate at rates that, today, are almost a full percentage point higher.

I am not sure about whether this fall is going to be better than last fall.
At least for condos in Toronto it is going to be a free fall not a better fall.

#80 Victor V on 10.16.13 at 12:13 pm

Canada’s housing market begins to apply the brakes

http://business.financialpost.com/2013/10/15/canada-housing-sales/

Almost everybody agrees the real test for housing will come in October, as the sector now adjusted to tougher mortgage rules, deals with the fact rates have climbed. The prime lending rate remains at 3% but five-year closed fixed rate mortgages are as high as 3.89% at banks on a discounted basis after dropping below 3% earlier in the year.

“We are starting to see some deceleration but the numbers are already inflated because [of pre-approved mortgages. I would not put too much weight on the [September] numbers,” said Benjamin Tal, deputy chief economist with CIBC World Markets.

He notes the markets has corrected in terms of sales activity but the larger question is why haven’t prices followed sales down. “The market is still a bit too strong,” said Mr. Tal, who believes it makes more sense for prices to drop.

#81 Ups! on 10.16.13 at 12:14 pm

http://www.thestar.com/news/canada/2013/10/16/pmo_evacuated_because_suspicious_package_person.html

#82 Penny Henny on 10.16.13 at 12:17 pm

ooh faster, faster

http://business.financialpost.com/2013/10/16/toronto-housing-market-shows-no-signs-of-slowing-down-as-early-october-sales-spike/

#83 bob on 10.16.13 at 12:20 pm

Hi Garth,

In light of the “I am wrong” post — would you mind a follow-up post to state (more clearly) what your new thinking is? It sounded like you are saying housing prices are not stable, but it will continue until it doesn’t.

Well, duh, that’s a pretty cheapo way out if that’s what you’re saying.

#84 Ralph Cramdown on 10.16.13 at 12:26 pm

This is great. I just turned on CNN, and there’s a tight shot of Harry Reid yakking in front of mostly empty chairs, with a Dow ticker updated every second. Every time he splits an infinitive, the Dow drops 5, but it gradually creeps up as long as his grammar’s correct. Oops… Ted Cruz… FALLING, cut away! Mitch McConnell… NOT RECOVERING…

I couldn’t give a crap. Yesterday was the 15th, and the dividends and distributions did roll in on schedule, as they will next month.

#85 robert james on 10.16.13 at 12:38 pm

I would love to see the Tea Party goofs charged with terrorism ,,the economic verson,,loaded up on a cargo plane and shipped to Quantanamo and forgotten about..

#86 Canadian Watchdog on 10.16.13 at 12:41 pm

*SENATE DEAL WOULD LIFT DEBT CEILING UNTIL FEB.7, REOPEN GOVERNMENT THROUGH JAN.

So we’ll be back to square one in February.

#87 ponerology on 10.16.13 at 12:43 pm

…not to mention that placing a sign and setting up a booth like that in Toronto is actually a municipal code violation. I know.. totally irrelevant here. Just felt like sharing.

#88 HogtownIndebted on 10.16.13 at 12:53 pm

This part from David Madani stands out from today’s paper:

“Home sales are getting pulled forward at the expense of later this year and next, as potential homebuyers jump into the market before mortgage rates rise any further. Accordingly, we expect home sales to flop in the not-so-distant future, which will once again apply downward pressure on house prices.”

http://www.thestar.com/business/real_estate/2013/10/16/hot_housing_market_expected_to_cool_through_winter.html

#89 Nuts on 10.16.13 at 12:54 pm

Friend just sold his tiny Toronto townhouse for $730,000, $20,000 over asking, within 2 days of listing.

#90 economictsunami on 10.16.13 at 1:02 pm

RC:

The point I was making was the MSM gives undeserved credence to the economics prize and the coattail riding timing of the announcement is an ongoing fraud.

An example of the ultimate irony of this ongoing fraud:

“For instance, in 1997 two economists won an award for their derivative risk models that minimized risk, just before derivatives would explode in the 2000s real estate-bubble.

The award was shared by economists Robert Merton and Myron Scholes for their work in figuring out how to value derivatives so as to minimize risk. The two economists used their Nobel-worthy economic models to run “the world’s biggest hedge fund,” which was called Long Term Capital Management (LTCM). And the fund really lived up to its name. Nine months after winning the Swedish Central Bank Prize in Economics, LTCM went belly-up, racking up over $1 billion in losses over a period of just two days. It was of course bailed out by then-Federal Reserve Chairman Alan Greenspan, who considered LTCM “too big to fail.”

As many found out recently with Reinhart & Rogoff, economists that publish theoretical papers are not obliged to share their accumulated work for others to apply rigorous empirical testing of their conclusions.

Without this, many theories are merely suppositions and is exactly why economics is referred to as”The Dismal Science”…

#91 T.O. Bubble Boy on 10.16.13 at 1:22 pm

@ #77 Glen on 10.16.13 at 11:42 am
The average selling price for October mid-month transactions was $536,301 – up 7.3 per cent compared to the first 14 days of October 2012.

Insanity keeps going on. Unreal
——————————

Basically flat with September… same month-to-month trend as every year.

#92 truthseeker on 10.16.13 at 1:23 pm

Garth – stop the presses!

“For the first 14 days of October, Toronto Real Estate Board said there were 3,460 sales through the multiple listing service, up 21% from a year ago. The mid-month numbers are also 13% above the 10-year average.”

“Prices also continue to climb with the average home selling for $536,301 during that 14-day period, a 7.3% increase from the same period a year earlier.”

As long as interest rates remain at these historic low levels there is no chance of any significant decline in
this sector. Owners rejoice.

#93 aprilNewwest on 10.16.13 at 1:23 pm

According to BNN Sept 2013 issue, Vancouver has “15.000 to 20.000 more empty units proportionally than Calgary and Toronto Metropolitan regions”.
I’ve heard the economist Cameron, who is often a guest on the real estate pumping radio station CKNW, referred to as a “spin doc”……………..

#94 Dear Galina aka Penny Henny on 10.16.13 at 1:25 pm

#82 Penny Henny on 10.16.13 at 12:17 pm
ooh faster, faster

http://business.financialpost.com/2013/10/16/toronto-housing-market-shows-no-signs-of-slowing-down-as-early-october-sales-spike/

The housing market is actually in deep trouble
Condos will be a bloodbath in Toronto this month and in the coming months

To your delight here are a two graphs

All sales included
http://img59.imageshack.us/img59/2122/hbxq.png
Sales above 1M filtered out
http://img594.imageshack.us/img594/7889/0ygj.png

I don’t see the “no slowing down” there ..on the contrary

#95 Canadian Watchdog on 10.16.13 at 1:36 pm

Check out the exponential curve on this chart. I suspect these borrowers are mainly using short-term personal loans to consolidate debt and to fund down payments on mortgages. All while OSFI sleeps at the wheel…

#96 AndrewAb on 10.16.13 at 1:50 pm

#80

Did you notice the headline directly opposite on the left:

“Toronto housing market shows no signs of slowing down as early October sales spike.”

Remember, all real estate is local, except when you want to send a mixed message and cancel out any other reports that say otherwise.

#97 Behavioral Finance on 10.16.13 at 1:58 pm

Robert Shiller is funny saying that a home is not an investment. Well back in the day when land was cheap and construction costs were low, maybe that was the case. Today people pay high multiple of what they earn for real estate and the slightest correction in the markets can wipe out their net worth, if most of their cash it tied up in real estate. As this is the case for most people.

#98 100%taxationis inevitable on 10.16.13 at 1:59 pm

30% of the Cdn economy relies on real estate. There are no international head offices…no major industries…miners are digging elsewhere due to high tax and regulation. Taxation to support a civil service for the second 30% plank in the economy……welfare is the third tranche of the economy…..with private enterprise barely signifigant…..pray tell…..if a state of perpetual recession is to be avoided then hope the real estate industry recovers….there is nothing to take it’s place to pay the salaries of the civil serpents…..and snakes…as we know…eat children when they get hungry.

#99 jess on 10.16.13 at 2:01 pm

‘Best’ investment lists as ads –
probed by watchdogs as growing numbers of savers use DIY services
Many firms have lists on websites and in their marketing material of the ‘best’ investments to buy, but there are fears naive savers could be lured into unsuitable funds. uk

#100 jess on 10.16.13 at 2:08 pm

Canadian Watchdog

those officials don’t want to disturb the consumers holiday buying season e.g. Cyber Monday ,Black Friday deals.

#101 Ralph Cramdown on 10.16.13 at 2:09 pm

#90 economictsunami on 10.16.13 at 1:02 pm
RC:

“The point I was making was the MSM gives undeserved credence to the economics prize and the coattail riding timing of the announcement is an ongoing fraud.”

But that’s incorrect. It isn’t the “MSM” that announces the econ prize around the same time as the original prizes, it is the NOBEL PRIZE COMMITTEE ITSELF. You are trying for an appeal to authority, viz Ol’ Alf Nobel, except that he wasn’t even considered an authority on prizewinning research in these fields in his lifetime. So you’re really trying an appeal to old, rich, dead benefactor. So his fortune funded the original prizes, and a different source funds the econ prize. YOUR POINT?

[blah blah Black-Scholes, have you any prize?]

It is no secret in the finance community that Black-Scholes is bogus, because it relies on the assumption that prices fluctuate in a “normal” (i.e. “Bell Curve”) manner, and they don’t. We’ve known this for a LONG TIME. See Mandelbrot etc. for details. Nonetheless, Black-Scholes was better than what preceded it (i.e. wild-assed guesses), its widespread dissemination greatly expanded option markets, and it is still being used today for all its warts. If you can come up with a better model that’s easily tractable on an HP business calculator, i’D STRONGLY URGE YOU TO PUBLISH.

“As many found out recently with Reinhart & Rogoff, economists that publish theoretical papers are not obliged to share their accumulated work for others to apply rigorous empirical testing of their conclusions.”

If you’ve been following the whole R&R circus (and I have</b), you'd know that the grad students who were their tormentors got their data from them when they asked for it… as is usual. Science (even the dismal one) doesn't advance too far on "here's a conclusion based on private data and secret methodology."

#102 Form Man on 10.16.13 at 2:24 pm

#98

ok, let me see if I understand your comment. 60% of the Canadian economy is comprised of government expenditures, 30% is real estate related, 10% is everything else ?

please provide your source for this data

#103 jess on 10.16.13 at 2:34 pm

The chained CPI: A zombie benefit cut still walks
http://www.latimes.com/business/hiltzik/la-fi-mh-chained-20131004,0,4565719.story
new book, The Physics of Wall Street by James Weatherall, tells that story: In 1996, five economists, known as the Boskin Commission, were tasked with saving the government $1 trillion. They observed that if the CPI were lowered by 1.1 percent, then a $1 trillion could indeed be saved over the coming decade. So what did they do? They proposed a way to alter the formula that would lower the CPI by exactly that amount!]

http://www.slate.com/articles/technology/technology/2013/02/should_algebra_be_in_curriculum_why_math_protects_us_from_the_unscrupulous.html

#104 Ellen Brown is not a bonehead on 10.16.13 at 2:41 pm

@Ralph Cramdown
Ellen Brown and her readers are boneheads???
‘Experts’ form top ranked economic schools will only lie to you, it’s been going on for a while. The system is broken, worse.. its fraudulent, worse .. it’s privately owned. Just because you can buy shares in it doesn’t mean it’s legit.

#105 Devore on 10.16.13 at 2:46 pm

#95 Canadian Watchdog

I love hockey stick graphs. They inspire so much confidence.

#106 Ferrari321 on 10.16.13 at 2:46 pm

Wow brad lamb said the condo market was far too hot and we had to cool it off – I think I just saw a pig fly

http://www.torontocondobubble.com/2013/10/condo-buyers-struggle-to-adjust-to.html

#107 straight 6 on 10.16.13 at 2:53 pm

Don’t despair! The 48sf urban loft has arrived.

sleeps 2.. includes internet bar w gas cooktop, small sink and a convertible bed/lounge w/ storage under.

Total outlay.. around 4K.
Required.. a little carpentry and the ability to do what war-shington wouldn’t do.. compromise!

Price includes van.
and being debt free! psych counselling not necessary.

#108 heineken on 10.16.13 at 3:09 pm

my good friend just sold his toronto semi, are you ready, for a hot $820,000.00. he has been living in it approximatley 6 yrs. 1200 sq ft, mutual drive, 10 minute walk to subway. galvanized plumbing , 60 amp fuse service, 3/8″ worn out wood floors, lead line coming into the house.
IM ssoooooo JEALOUS.
he put >325k into his pocket. never did a thing to the home.

Which is why this market is Nortel, circa 2000. — Garth

#109 broadway skytrain on 10.16.13 at 3:15 pm

Which is why this market is Nortel, circa 2000
————————————–
nortel never came with a piece of land.

the house is worth 0 – the land is worth what the next guy will pay. inner urban land is likely to stay in favor.

Nortel came with cash flow. — Garth

#110 Mister Obvious on 10.16.13 at 3:22 pm

#83 bob

Re: “I Was Wrong” post.

Originally, Garth felt the current RE market was 99% irrational in it’s reluctance to face up to even a shred of economic reality.

He had to finally concede that this figure was wrong and that the market is in fact fully 100% irrational.

It takes real guts to own up to such a thing.

#111 Son of Ponzi on 10.16.13 at 3:31 pm

And the musical chairs continues in Washington.
Gutless Executive.
Where is a Winston Churchill?

#112 Son of Ponzi on 10.16.13 at 3:33 pm

Better an end with terror, than a terror without an end.
Charles Ponzi

#113 Suede on 10.16.13 at 3:42 pm

uh-oh, capital controls!

JP Morgan Chase Bank in the USA is implementing a ban starting Nov 17 on international wire transfers. BUY GOLD!! lol

Developing on the DrudgeReport…

#114 father on 10.16.13 at 3:43 pm

I thought nortel crashed and housing will only correct by 15 percent

#115 Ralph Cramdown on 10.16.13 at 4:18 pm

#104 Ellen Brown is a bonehead — ‘Experts’ form top ranked economic schools will only lie to you, it’s been going on for a while. The system is broken, worse.. its fraudulent, worse .. it’s privately owned. Just because you can buy shares in it doesn’t mean it’s legit.”

Look, I didn’t say I needed the opinion of ‘experts’ from top econ schools. What I said was that *if* I needed top econ advice, I’d rather have it from them than from amateurs whose forwarding address has been a marble orchard for the last 150 years.

I don’t own a single share in ‘the system.’ I own shares in companies which are profitable, with businesses I understand, and which send me my share of the profits on a regular basis. You can spend your time proving that ‘the system’ is a fraud or that a bumblebee can’t fly. I don’t care, as long as you pay your utility bills every month.

#116 Stoopid Idiot on 10.16.13 at 4:28 pm

Economist John Williams says the U.S. budget and debt ceiling circus is not the real problem. Williams contends, “The issue here, very simply, is the long term solvency of the United States of America. . .

http://www.youtube.com/watch?v=wF3kS0yx-dI#t=35

#117 Mixed Bag on 10.16.13 at 4:55 pm

Nortel came with cash flow. — Garth
—————————————–

Where’s that cash flow now? The principal? I get everything you say about carrying real estate vs. paper investments. But at least the land value, barring some crazy event, has an extremely low likelihood of going down to zero.

You could also sell it in 2 minutes. — Garth

#118 Ralph Cramdown on 10.16.13 at 5:06 pm

Congressional Republican leaders conceded defeat Wednesday in their budget fight with President Obama over the new health care law, agreeing to support a reopening of the government and a lifting of the nation’s borrowing authority in exchange for future budget negotiations.

Man, it’s like the Leafs. “We’re trading a fencepost and three draft picks for future considerations.”

#119 George Stallion on 10.16.13 at 5:06 pm

I really love it when the real estate developers and corrupt politicians use anonymity to post “SUPPLY AND DEMAND” jargon to people.

The only people who could afford these million dollar homes are unionized workers, corporate CEOs and anyone earning over 100k a year.

Do teenage youth from Jane & Finch have a chance to get a mortgage to purchase million dollars homes in Toronto when they reach 25 ? What about part-time workers and minimum wage workers?

Toronto has a widening of the rich vs.poor gap and it is very discriminatory. A $10,000 increase in house prices wouldn’t affect a Principal of the TDSB in buying a home, but a $1000 a year increase in rent will affect a minimum wage worker in Toronto.

And importing 300,000 immigrants a year isn’t going to help anything!

#120 Snake on 10.16.13 at 5:07 pm

IMF report points to deepening recessionary trends in global economy

http://lehmanbrothers.frenchrope.com/2013/10/10/IMF-report-points-to-deepening-recessionary-trends-in-global-economy/

Gold Digger (vancouver chicks)

http://www.youtube.com/watch?v=0iyeUcFKRv4

#121 maxx on 10.16.13 at 5:34 pm

#30 Notta Sheeple on 10.15.13 at 10:34 pm

” ……finally shedding their arm-twisting REALTURD®”

®….cute one!! My guffaw of the day.

#122 Canadian Watchdog on 10.16.13 at 6:05 pm

Canada Says It Will Introduce Balanced Budget Law

Canadian Prime Minister Stephen Harper pledged to legislate balanced budgets outside of periods of economic crisis to secure the country’s status as one of the world’s most creditworthy nations. Harper, in a mid-term update of his agenda released today, said he will introduce statutory fiscal rules that require balanced budgets in “normal economic times, and concrete timelines for returning to balance in the event of an economic crisis.” Harper reiterated his pledged to balance the budget by 2015 and lower the nation’s debt-to-gross domestic product ratio to 25 percent by 2021.

The last time we seen this level of confidence to pay down the budget, Canada increased its immigration quota, which could also explain why the Governor General and Commander-in-Chief (Canada's dictator) just departed on his trip to Asia in order to find more immigrants and foreign students to flood the country with.

The gates are open. All aboard Canada.

#123 worried realtors on 10.16.13 at 6:32 pm

Worried realtors continue to post here since the market is doing well? It’s just the opposite as many hungry for money and haven’t made a sale in over a year realtors are here posting in a panic. Many realtors who used to sell many properties over the last few years don’t even have a single listing today. The truth hurts doesn’t it? The house of cards will crumble and when it does will the public take their anger out on the scum of the earth realtors?

#124 Mike T. on 10.16.13 at 6:38 pm

‘Canada Emerges From “The Housing Market Correction No One Noticed.”: Toronto Star’

I know a guy in Kelowna that lost ‘north of a hundred’ grand selling his house in the trendy Wilden neighbourhood of Kelowna.

He noticed :(

multiply over and over
rinse repeat

the cycles repeat themselves for a reason folks, you did not learn the lesson the first time!

#125 Smoking Man on 10.16.13 at 7:45 pm

#123 worried realtors on 10.16.13 at 6:32 pm
Worried realtors continue to post here since the market is doing well? It’s just the opposite as many hungry for money and haven’t made a sale in over a year realtors are here posting in a panic. Many realtors who used to sell many properties over the last few years don’t even have a single listing today. The truth hurts doesn’t it? The house of cards will crumble and when it does will the public take their anger out on the scum of the earth realtors?
………………………………….

Ha LaughingCon is back, in the fall as predicted by me.

How is it going bro……did you buy a place.

Whazz up says Hi

#126 eddy on 10.16.13 at 7:50 pm

#119 George Stallion wrote-
Do teenage youth from Jane & Finch have a chance to get a mortgage to purchase million dollars homes in Toronto when they reach 25 ?

^^^^^
That’s unattainable for most first time buyers. I know a woman who did supply teaching at Jane and Finch, after a few sessions she requested no more return engagements. She said she could not take attendance- the students were so disruptive it simply could not be done.

#127 Observer on 10.16.13 at 8:11 pm

Chase Bank Limits Cash Withdrawals, Bans International Wire Transfers

http://www.infowars.com/chase-bank-limits-cash-withdrawals-bans-international-wire-transfers/

That’s a credible source. — Garth

#128 Holy Crap Wheres The Tylenol on 10.16.13 at 8:19 pm

DELETED

#129 Nemesis on 10.16.13 at 8:36 pm

@Ralph/#101

You had me at, “Mandelbrot”…

Although personally, I’ve got a lot of time for WildAssedGuesses, too… [depending on who’s guessing]

One day – perhaps – the HeterdoxEconomists will finally get their QuantumFractal/k-MinkowskiSpacetime models to work… and then we’ll really have something to talk about.