The blame

FRIEND modified

Yesterday I wrote one line about FSBO sales. Don’t bother buying that way, I said. And the hate was on.

Why? Appears many people blame realtors for houses they can’t afford, as they rake off 5% of the purchase price in effortless commissions (or so it may seem). Hating real estate agents is just as easy as hating the Chinese (or the Iranians, or the Russians). Almost nobody blames their neighbour for selling at a crazy-high price, since that just makes your property worth more. And how about saving some venom for the feckless F, with his 0/40 policies which got the bubble puffed, or the Bank of Canada’s almost-free mortgages?

Nope, too hard. But the local Re/Max guy with his new Audi? Make my day.

As you may have heard, CREA is at it again. Home sales across the country last month dropped from October, but the average price has increased. Ottawa’s market-slagging measures which depressed things a year ago have apparently been forgotten, so compared to last November average prices have risen 9.8%. The typical Canadian house now costs the same as two of them in the United States.

Ultimately there’s nobody to blame but those who create the demand for over-valued assets. People keep buying houses regardless of the process, since they have an endless appetite for debt.  The only way they’ll justify this is if prices continue to rise, yielding capital gains which can make up for the huge cost of buying, owning and selling. My contention is that those days are ending. Not quietly.

A story in the New York Times a few days ago said this: “anyone in the market for property might want to avoid Toronto or Vancouver.” That came after the latest international study which found Canadian real estate is inflated by 60% based on the accepted practice of comparing prices to local incomes, or to what a house can be rented for. That conclusion means two things, of course. That people continue to buy homes they  can’t afford, and landlords heavily subsidize renters.

This is also an interesting comment:

“These data also underscore the dilemmas central banks face in various countries. Canada’s, for example, is grappling with a slowdown in its economy and a worrying stagnation in consumer prices that’s raising the risk of deflation. But sky-high house valuations make it difficult for the Bank of Canada to cut rates to spur aggregate demand.”

CHART

Hmm. Remember what we said here a few days ago, during Deflation Week on this pathetic blog?

Sure you do. The prices of everyday items – the cost of living, in other words – can relentlessly increase, as is now the case. But the economy – as measured by wages, industrial output, demand and employment – can deflate at the same time. It’s a grim scenario, especially if you happened to buy a house last year with just 7% down, and now your employer’s starting to wobble.

Since we’ve achieved another all-time debt record, with $1.2 trillion in outstanding homeowner mortgages (doubled within the last decade) and unprecedented line of credit and credit card balances, the central bank is handcuffed. If rates rise to chill house horniness and temper our piggish appetite for even more debt, it’ll push the economy into true deflation and ugly employment numbers.

But if CREA’s right, with house sales and prices even higher in 2014, things get even more dangerous with a worse ending. Which is why we should all expect more real estate thumping from Ottawa, early in 2014. Meanwhile, of course, we get closer to the US central bank announcing its intent to taper off stimulus spending – which will likely bring higher bond yields, and more costly fixed-rate mortgages. Some wags expect that announcement this week. Others bet it will come mid-March. But make no mistake, it will happen.

None of this is the fault of any realtor. Sure, CREA’s numbers are highly suspect (ex-real estate broker Ross Kay will be along tomorrow to tell you why), and agents routinely prey on the emotional weakness of buyers as well as the antisocial greed of vendors. But the market’s made of willing buyers and sellers, and those who think they’re immune from the laws of economics will learn otherwise.

Gosh. Who will we blame then?

169 comments ↓

#1 TurnerNation on 12.16.13 at 7:45 pm

Must be on Least Coast time.

#2 TurnerNation on 12.16.13 at 7:48 pm

Tulip time!

December 16, 2013 – GreenBank Capital Inc. (CNSX: GBC) (“GreenBank” or “the Company”) announces that it has launched two new subsidiaries to invest in Bitcoin and Bitcoin startups. GreenBank believes that it is the first public company to establish a presence in Bitcoin, which is a completely decentralized digital cryptocurrency. The two subsidiaries are Bitcoin Canada Investments Inc (“Bitcoin Canada”) which will invest exclusively in Bitcoin, and Bitcoin Angel Capital Inc (“Bitcoin Angel”) which will invest in early stage Bitcoin and other cryptocurrency focused companies. The management of GreenBank intends that a proportion of both Bitcoin Canada and Bitcoin Angel will in due course be spun off to GreenBank shareholders by way of a plan of arrangement, at which time they will make application for a public listing of their common shares on the CNSX

#3 ronh on 12.16.13 at 7:50 pm

Didn’t we have stagflation in the ’70s? History repeats!
Don’t blame someone else for your bad mistakes.

#4 Tri-Guy on 12.16.13 at 7:52 pm

Roscoe Kay tomorrow. Can’t wait

#5 Cory on 12.16.13 at 8:00 pm

As said here before, I am sure the fed’s are trying to get through the next election before making any real attempts to stop this train wreck.

Spineless politicians + stupid people + stupid realtors + greedy banks + (most important) CMHC!!= Canada. lol.

#6 World According to Garth on 12.16.13 at 8:02 pm

“And how about saving some venom for the feckless F, with his 0/40 policies which got the bubble puffed, or the Bank of Canada’s almost-free mortgages?”

Agreed. Blame the Govt.

then there are are also these guys:

http://armstrongeconomics.com/2013/12/16/when-they-hang-bankers-the-new-financial-terrorists/

Oh…….but we live in a civilized society now right? Iphones and lattes right? We are different now right? Tell that to all dead and dying in the ME and Africa.

#7 Eamon on 12.16.13 at 8:03 pm

Garth, what kind of investments are you putting your clients into? What are some safe longterm strategies?

#8 ILoveCharts on 12.16.13 at 8:03 pm

Many sales people are overpaid because they are “close to the money.”
Many licensed service professionals are overpaid because their associations do powerful lobbying.
Realtors are a mix of both. A double whammy.

Anyone engaging the services of a realtor should demand that they provide value.

We have the internet now. FSBO will increase over time. It is inevitable.

#9 Smoking Man on 12.16.13 at 8:17 pm

So prices are up, basement dwellers blaming Realtors.

You know who’s fault this is.

TORONTO STAR.

But again I’m always right, but there is light at the end of tunnel for dogs.

It’s name is Wynn, it’s chasing all the business out of the province, F said it’s dumb to spike pension contributions right now, and he’s right.

But no, the Wynn is going to do it anyway. She runs sets goals. Always archives them.

I guess all her tree hugging supports won’t be happy till she makes the car extinct.

#10 Suede on 12.16.13 at 8:20 pm

Off topic, as usual b/c of my attention skills…

John McCain on Ukraine joining the EU or Russia,

“We are here to support your just cause, the sovereign right of Ukraine to determine its own destiny freely and independently. And the destiny you seek lies in Europe.”

haha, so they should determine it freely and independently, but he’s just offering a nudge in his preferred direction.

#MERICA

#11 T.O. Bubble Boy on 12.16.13 at 8:31 pm

The typical Canadian house now costs the same as two of them in the United States.

Yah, but, we have all the rights and freedoms!

Oh, wait, those were just traded for a pipeline by Harper & co.:
http://www.huffingtonpost.ca/2013/12/16/tpp-canada-copyright_n_4454199.html?utm_hp_ref=canada

#12 Rick from orleans on 12.16.13 at 8:34 pm

Gartho
Metro Ottawa is high on white stuff – stable 4.6 % unemployment rate. LRT to nowhere is in the pipeline.
Should I flee suburbs for Condo inside donut or stay on fringes of cream icing , suffer the traffic of the OC (old canned tuna) Transpo?

Neigbourhood is crammed with cars and soon Starbucks coming to strip mall .

#13 Mike on 12.16.13 at 8:34 pm

Still no justification given for the
out and out bashing of FSBO.

It’s not about blaming realtors, it is simply
about having another option for sellers and buyers.
Yes, the FSBO model isn’t perfect, but the holes
in it are in fact largely due to the realtor’s
strangle hold on the transaction process and of course
public apathy.

You began your post with the topic of
FSBO and then raised a straw man (causes for
rising home prices) to strike down.

I’ve been reading for nearly a year and I’m a fan but your stance against FSBO is very incongruent.

Your readers should consider this while considering
to invest with you. This is disappointing.

Get over yourself. Most FSBOs are a quagmire – fine for sellers, potentially awful for buyers. I will explain this to you soon. In crayon. — Garth

#14 T.O. Bubble Boy on 12.16.13 at 8:37 pm

Ultimately there’s nobody to blame but those who create the demand for over-valued assets.

So, really it is all CMHC’s fault (creating demand by enabling giant mortgages for broke Canadians), and Parents (who instill house-obsessed value in their offspring over basic financial knowledge).

#15 totalinvestor.com on 12.16.13 at 8:38 pm

Gosh. Who will we blame then?

This is all Rob Ford’s fault.

#16 Freedom First on 12.16.13 at 8:40 pm

Great Title Garth!

Blame, I stay away from that, it is sick thinking and only leads to “Self Pity”, more sick thinking, leading to “Resentment”, more sick thinking, leading to “Anger”, which can lead to very very bad self-ruining outcomes, hurting no one I would blame, and only hurting myself and people in my life. Best scenario: I take full responsibility for all of my actions, realizing that is all I can control, is my actions, and no one elses, be it a person or Government, or any other organization. Awareness, Knowledge, and Wisdom are my defense. Garth’s blog, and all other wise guidance are extremely valuable. Ignorance is not bliss, it is very expensive. I do not just read Garth’s free blog, I “Study it”, “Investigate it”, and I learn from it, as I do other sources, and I can truthfully say, as a man who has read and studied much to do with everything Garth has written about, his information, wit, and genuine helpfulness, is 2nd to NONE. I manage my finances as I do all aspects of my life, it is very important. If I couldn’t manage my finances as I do, I would simply hire Garth. Keep it simple.

#17 Cici on 12.16.13 at 8:47 pm

Great blog Mr. Turner !

#18 ralph ramsey on 12.16.13 at 8:50 pm

Meanwhile, of course, we get closer to the US central bank announcing its intent to taper off stimulus spending – which will likely bring higher bond yields, and more costly fixed-rate mortgages. Some wags expect that announcement this week. Others bet it will come mid-March. But make no mistake, it will happen.
—————————————–
No, it will not.

Any potential tapering would be only temporary.

Forward rate guidance without QE does not exist, if rates are not suppressed the whole economy implodes in worse way than the big depression, There would be always sufficient QE as to support low interest rates. For the next 5-6 years at least.

Just watch the 10 years treasuries, up from 1.6 to almost 3 this year. With all the QE.

Reduction in QE will liberate the rates and would require higher QE at later a point. The whole thing disintegrates when Fed becomes the only bond buyer.

There is no possible withdrawal of the stimulus as the very idea of Fed selling bonds with no buyers will crash the dollar and the rates will skyrocket. Eventually the excessive reserves will make it through the economy and a very high inflation would be fact.

The only hope is to lie about inflation, depress the rates and postpone the inevitable. US has 17 % o the world economy and the dollar is 65 % of all the reserves.

Yes there would be commodity boom and in it is Canada’s only hope. If things play as I see them we would see significant inflation but Canada would be OK due to commodity prices.

House over 1 mln. when coffee is 5 $ and a loaf of bread 10 $ is not a big deal. Just hand in there.

Inflating the debt is the only game in town. Default is not an option. Commodities will thrive.

#19 DR on 12.16.13 at 8:50 pm

Buyers make their offers. Realtors do not.

You mean to tell me if there are multiple offers a realtor will tell his buyer to bid 80000 over what they are willing to pay? Ya right.
Buyers put the price and the realtor makes the offer that’s it.

…..And there have been many in Toronto putting ridiculous amounts for a house.

I don’t see how people can just DO what their buying agent tells them to lol. That’s just not happening.
Maybe one realtor or two or three got away with it but not THAT MANY.

#20 Spiltbongwater on 12.16.13 at 8:51 pm

CREA’s numbers are highly suspect, but we should trust an agent in that association well enough to buy or sell a house? Makes sense. Seems about right.

Soldiers don’t run the war. — Garth

#21 Nomis Ralpmet on 12.16.13 at 8:52 pm

Is there a way to tell how much of the debt issues since 2009 has been consumer (mortgages, credit card) as opposed to business investment? I’m curious as to whether low interest rates have really been used by businesses to invest back in their business.

#22 Dean Mason on 12.16.13 at 8:56 pm

Get ready to pay for a monthly fee for using their Canada Post community boxes and walking to get your snail mail.

It is coming, Happy Holidays!

#23 Cici on 12.16.13 at 8:58 pm

#12 Mike

It goes something like this: for every knowledgeable do-it-yourselfer who is able to effectively gain from using FSBO, there are nine other idiots who don’t understand the market and the legalities of home buying and selling, and who will thus get creamed (whether they realize it or not).

This blog is for the masses, which is why Garth doesn’t give out advice on individual stocks and ETFs (the market changes too fast for a one-size-fits-all approach, which is why he urges people to use advisors if they haven’t got all of the basics down). It’s also why he doesn’t promote FSBO. Just what this country doesn’t need: a bunch of greedy pinpricks with no training, experience or knowledge about basic fundamentals trying to establish fair market prices. Give me a break, CREA is bad enough!

#24 ralph ramsey on 12.16.13 at 8:58 pm

As one of the long term rules is that things always revert to the mean and sometimes overshoot, imagine how 10 % market driven interest rates will look like in the current economy.

It would kill the economy. The other option is to kill the dollar. Which one will it be? Without doubt the second: kill the dollar.

So invest wisely/commodities only/ in long run.

#25 Ole Doberman on 12.16.13 at 8:59 pm

I still lose sleep at night thinking about the coming bail ins in Canada. Once the house of cards in RE gives be ready to give the bank support:

http://www.zerohedge.com/news/quantifying-big-five-canadian-banks-114-billion-bailout

Just sucks that Garth is given us great investment advice and now our earnings will be going back to the bank, I guess the house always wins.

#26 A Yank in BC on 12.16.13 at 9:05 pm

#10 Suede on 12.16.13 at 8:20 pm

The context in which these words were spoken is of paramount importance. McCain was speaking to protesters who clearly want nothing to do with Putin’s Russia. Perhaps you would deny them their right to an opinion?

Clearly, most Ukrainian’s want little to do with Putin’s Russia.

#27 omg on 12.16.13 at 9:09 pm

The whole FSBO thing.

crikey Garth, it must be hard to be so breathtakingly self-certain.

#28 Kilby on 12.16.13 at 9:18 pm

Get over yourself. Most FSBOs are a quagmire – fine for sellers, potentially awful for buyers. I will explain this to you soon. In crayon. — Garth

There is not a truer statement made. A lot of us have successfully bought and sold privately but anybody that is actually paying attention to the markets in the last 10 years knows of this quagmire….

As well, some of us have other jobs and obligations, having somebody else handle 3 or 4 (or more) months of expensive advertising, handling difficult clients, arranging financing for some is well worth the commission, I wouldn’t wish a lot of that work on anyone.

#29 Jody on 12.16.13 at 9:25 pm

The humanitarian in me sees the current situation and wonders how we can save everyone from what is coming. The capitalist in me sees a coming feast. Is it a damning blow to our humanity to urge a hit on the Canadian market? At the present moment it seems lots of people are betting against our economy, most of them are already filthy rich. Will our middle class be wiped out so a few hawks can score? Looks that way.

#30 my thoughts on 12.16.13 at 9:26 pm

This is an interesting time we live in. I am realizing more and more just how indebted people are. Today friends are talking about evicting a tenant who hasn’t paid rent in 3 months. This rent is under $1000 per month and includes everything… amazing that a 45 year old cannot make this payment… but anyways. Another interesting thing is that many many people own far more then the 1 investment property i thought people owned on average. Talk to people I realize that many have at least 3 in addition to the home they live in. They also cannot sell these properties because they already don’t carry them for rent, and the properties have not risen in value over the last 3 years. So technically not only are they subsidizing their tenants, but they feel like they cannot sell because they will lose even more money. I would say the game is coming to an end. Oh.. and last but not least.. how many speculator building projects are currently on hold due to lack of funding and or lack of permits. Seems like everything is more difficult. And when money is tight and all those people are commuting to work from their million dollar mcmansion in the middle of the boonies… those fuel bills will be quite high adding to their financial stress. Keeping up with the joneses is tough work my friends.

#31 retired Boomer - WI on 12.16.13 at 9:29 pm

Blame? Who?? Certainly not the seller who “owns” the properly be it with, or without a mortgage.

Blame ONLY the Buyers, juiced by the media, aggravated by stories of agent’s who say “Buy now, or never.”

Advertising works, right? “Melts in your mouth, not in your hand” 1954 M&M’s commercial…just an example.

We are all subject to the appeals to emotions, reason, fear, etc etc. This is WHY advertising works so dam well.
Don’t shoot the messenger, just count the appeals to “BUY, BUY, BUY!!!” on the Tube, print, radio, co-workers

Cars are on sale “Hurry on down to shit-box motors for your great Deal” Yeah, right.

Look in the mirror, indebted, worried, scared person you are surely not alone, just change your THINKING!!!

#32 Intuitive Missus on 12.16.13 at 9:32 pm

Oh cripes! What a haircut…

294 Chartwell Rd   Sold: $7,500,000  
Oakville, Ontario L6J3Z9  Halton    Old Oakville List: $11,000,000  
Orig Price: $11,000,000 Taxes: $133,847/2013 68 % List
SPIS: N  Old Oakville  477-28-T DOM: 194 Contract: 6/1/2013 Sold: 12/12/2013

#33 Garth ..since you asked who we blame the most ..let's find out on 12.16.13 at 9:34 pm

So ..below are the potential answers to the question:

“Who do you blame the most for the status of the RE market?”

This question requires an answer.
Who do you blame the most for the current state of the RE market?
Who do you blame the most for the current state of the RE market? The government for low interest rates
The government for long term mortgages (0 down/40 years)
The government for allowing CMHC to insure loans above 700K
The RE boards for misinformation in regards to sales and sale prices
The RE agents for unfair sales tactics and for talking people into buying/selling at unreasonable prices
The mortgage agents for qualifying borrowers who would not normally qualify
The investors and the speculators for adding an overhead to the entire price structure
The regular buyers who bought more than they could afford or paid more than the real value of the property
The banks for for qualifying borrowers who would not normally qualify and of low interest rates
Other (please specify)

Garth suggested that we should hate/blame F for the whole situation
Well…let’s see ..

Vote here: https://www.surveymonkey.com/s/KMK89PT

I suggested nothing of the sort. Buyers are to blame. — Garth

#34 Babblemaster on 12.16.13 at 9:40 pm

“The only way they’ll justify this is if prices continue to rise, yielding capital gains which can make up for the huge cost of buying, owning and selling. My contention is that those days are ending. Not quietly.” – Garth

—————————————————–

That’s been my contention for the last 5 years as well. Based on the fundamentals, these prices are insane, but they keep going higher. I’ve got to give you credit Garth. You’ve been wrong, but your sticking to the same mantra.

#35 not 1st on 12.16.13 at 9:41 pm

3D printing is soon going render former members of parliament who blog totally obsolete.

#36 heineken on 12.16.13 at 9:44 pm

#10 Suede on 12.16.13 at 8:20 pm
Off topic, as usual b/c of my attention skills…

John McCain on Ukraine joining the EU or Russia,

“We are here to support your just cause, the sovereign right of Ukraine to determine its own destiny freely and independently. And the destiny you seek lies in Europe.”

haha, so they should determine it freely and independently, but he’s just offering a nudge in his preferred direction.

#MERICA
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

The amerikans, with their war criminal -tyrant leader are pushing really hard for the Ukrainians to join the European community so they can get raped by the new world order. just take a look a Greece. Cyprus , spain , Portugal….presently all the protests are being funded and directed by the CIA.
wouldn’t the amerikans love to place there missiles in Ukraine aimed at Russia?

#37 heineken on 12.16.13 at 9:50 pm

Ukraine to determine its own destiny freely and independently.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Just like Egypt or Palestine or Libya or Iraq or Afghanistan or……..

#38 Canadian Watchdog on 12.16.13 at 9:52 pm

Like it or not, FSBOs are trending and will continue to grow over the years. I can easily see FSBO’s making up 50%of residential sales within the next five years. This is what happens when you commoditize housing and everybody and their mother owns a house. They know the routine already and don’t need an agent. And more so when detached commission are around average annual incomes.

Smart Realtors are focusing on international clients. That’s where demand is and will continue to grow.

#39 Marco Polo on 12.16.13 at 9:54 pm

I don’t know if anyone noticed, but Mexico has just passed a law allowing foreign investment in their oil. For 70 years, only their state run company has developed their oil. Professional oil companies should extract much more, creating even more oil in North America, a flood really.

With Iranian oil coming soon, now Mexican, who will need Keystone, or Alberta oilsands? The high housing prices here in Alberta have nowhere to go here but down, like they did in the 80s, in almost the same circumstance.

#40 Dan on 12.16.13 at 9:55 pm

Cont on FSBO rant :-). I don’t hate anybody by design, but think about it; every time you sell a house you slap on a 5-7% inflation on it. after you’ve bought 4-5 house in a 30-40yrs span how much does that end up compounded? Imagine if we did the same for any used item? When I’m done with my car, I sell it myself, ditho for the house. That’s me. Regards.

#41 T.O. Bubble Boy on 12.16.13 at 9:56 pm

Bitcoin down $100 since this morning!

$705 at the moment:
http://bitcointicker.co/

#42 Yuus bin Haad on 12.16.13 at 10:01 pm

Phew! Here’s hoping F stays healthy so’s he can guide us through all this mess.

#43 Soma on 12.16.13 at 10:04 pm

but…but…why your rants about fsbo yesterday ?

#44 Nemesis on 12.16.13 at 10:04 pm

Well, ya could Blame it on TheBordeaux, SaltyDogz/AuldPol… or… no, NeverMind [JustKidding – that stuff really MakesNemDizzy].

Oh… right. Tonight IS actually about, “Blame”…

yIkes! That’s a DarnHard RowToHoe, YouDoggies.

Just Kiddin’. That’s FarEasier than you could imagine.

FirstUp is for Our AuldPol – RE: tonight’s LeaderIllustration. So, if you’re GonnaDoThat to us!… A semiotic retort is mandatory.

From Eugene Smith’s WayBackMachine [Eugene passed TheTorch to Donald… who subsequently passed it to… ???]:

ParadiseGarden:

http://iconicphotos.files.wordpress.com/2011/10/eugene1.jpg

AndNow… ToTheGermane: SeeminglyOffTopic [ButNot, Actually]…

So, the VeryChampions of ‘FreeEnterprise’… you know, SaltyDogz – the SameOnez who are ‘so’ concerned about their, “neighbours’ children” – while otherwise preoccupied GorgingOnPrimeRib @ LobbyistFunded KegFeasts – are, as it happens, not entirely as predisposed towards Entrepreneurialism, as they would like you to think:

[Tyee] – The War on BC’s Small Pot Farmer

…”It was like they were in a movie,” he says. “They came right up to me, pointing their guns at my head, yelling, ‘Lie down! Get on the ground!'” He dropped his hose and stood with his arms open as the men approached him. “You can shoot me,” he told the officers. “But I’m not getting on the ground.” The men kept yelling and waving their guns at him. The water from the hose trickled over the clear cut where fireweed bloomed pink and blue.

De Maria was arrested on charges of production for the purpose of trafficking. The anti-drug blitz has hit the whole region hard, not just growers. Business owners say that times are tough. Statistics put out by the Kootenay Real Estate Board have shown stagnant sales and reduced prices over the past five years.”….

http://www.thetyee.ca/News/2013/12/16/BC-Pot-Farmer/

How selfish!…

Damn!, one might AlmostBeTempted ToSay…

No! Make that, “Sing” – & AllTogetherNow, you SaltyDogz [JustFollowTheImaginaryBouncingBall]…

http://youtu.be/EvGJvzwKqg0

[NoteToGT: TisTheSeason. No PoliticalEconomy until 2014… CPCPoliticoGaffes & HyperLocal Thematically Relevant DevelopingNews Excepted]

#45 Dan on 12.16.13 at 10:09 pm

Garth can you explain something for us homeboys in Qc?
1)Why is my house sitting about 15 minutes from downtown in a very nice neighborhood worth about $600k and the same house in Toronto or Raincouver worth 3-4x that (try to leave the political out of it unless you have some good lymerics) is it that people here see lodging in a different way?(someone is going to bash me for this one…)
2)If prices do go south as you are hinting in your blogs, then basically the price of the house will become lower than the costs of building. ( I have family in Nevada and California and saw it happen there.) For someone in Qc where the market is already slow and prices historically much lower anyways, what is there to do for someone who’s already has over 80% paid off the mortgage? hold (it’s a “cheap” pad for the family to crash out in)? Still have 10 years before I hit 60.

#46 recharts on 12.16.13 at 10:11 pm

The survey is open again. By mistake I set a limit of 3 respondents instead of 3 choices.
Now it is back

Vote here: https://www.surveymonkey.com/s/KMK89PT

#47 heineken on 12.16.13 at 10:17 pm

what a joke.

in the last few days, someone has posted all the new rules and regulations, and BULLSHIT that realtors and their perspective sellers can now discuss-agree when discussing COMMISSION fees over a nice venti cinnamon flavoured latte at starbucks. how nice.

this is now part of the consumer protection act of 2013.

again more evidence of the modern day George Orwell
way of living.
Bad is good. Freedom is slavery. white is black.

Repeat these words out loud. CONSUMER PROTECTION ACT.

im sure the regulatory agencies constructed the new rules; of course with help from the banks and realtors. this is the nation we have become. anything goes and nothing matters. buyer beware.

#48 Daisy Mae on 12.16.13 at 10:18 pm

“But the market’s made of willing buyers and sellers, and those who think they’re immune from the laws of economics will learn otherwise. Gosh. Who will we blame then?”

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

All the old cliches are true — again and always. “There’s a sucker born every minute” and “survival of the fittest”. There are others. We’re our own worst enemy. We’re damn fools. But most are very YOUNG fools….got alot to learn, clearly being taken advantage of. I don’t like or trust realtors. They leave a real bad taste in my mouth. They’re just not worth the rates they charge. That’s got to change. And, it is.

#49 heineken on 12.16.13 at 10:21 pm

#41 T.O. Bubble Boy on 12.16.13 at 9:56 pm
Bitcoin down $100 since this morning!

$705 at the moment:
http://bitcointicker.co/
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Remove ‘B’ and put in ‘Sh’

#50 A coutuire on 12.16.13 at 10:22 pm

#26:

Ukraine is divided. Some, mostly in western Ukraine, want closer ties with the EU while others, mostly in eastern Ukraine want closer ties with Russia. They have been divided over this since the end of the Soviet Union.

What annoys many observers is that John McCain is always sticking his nose in other countries’ business, be it in syria, Iran, Israel, etc… And not in any sort of objective manner, but always on the side of conservo-hawk American interests.

In this case, even though he is preaching to a like-minded group of people (in that they want closer ties to the EU), many people are annoyed that he is even there in the first place, knowing that his interests are not so much in the favor of the Ukrainian people as they are in simply taking a stance against Russia, a country which McCain has regularly railed against at every opportunity. He’s a Cold War relic, something which he and Putin have in common.

#51 FTP - First Time Poster on 12.16.13 at 10:34 pm

I never said anything bout blame Garth, I was wondering what you hate on is regarding FSBO. I’ve had a good experience and this time around the market is definitely slower, so we’re having more legwork, but we’ll also save.

Do I blame CREA for false stats, Realtors for expecting an obscene amount of money for taking a 5 day course along with pressure tactics and slimy ethics? Yes I do, however, I also blame Joe Q Consumer for being a raging dumbass, developers for building sh*t properties, the government for inflating this gasbag and on and on. The only person I don’t blame is you!

Keep up the free public service!

#52 FTP - First Time Poster on 12.16.13 at 10:36 pm

On a side note Garth, having seen your presentation 5 years ago in Edmonton, have you ever considered giving educational presentations on finance, credit, debt, etc to Jr High and High Schools?

Your presentations are entertaining and you should be working on the next generation, not those who have already wasted their life savings.

#53 bigtown on 12.16.13 at 10:38 pm

When you look at the rental stock in Toronto…and the burbs you get those Soviet like blocks put up 40 or 50 years ago where the landlord did not lift a finger so the original décor is next to falling apart. The rents are high for what you get. Usually you cannot control the heat in winter and there is no air conditioning. The cupboards in the kitchen as I said are 40 or 50 years old. the bathroom is in a state of third world decline similar to Cuba so again I state the rents are high for what you get. The rental market in Ontario is morose due to the fact that there were no rentals built for 4o years due to rent control. Only now in Hamilton and the Niagara belt where there are a lot of vacancies do you see landlords actually making repairs and updates motivated by too many vacancies. In Canada the Scottish philosophy of squeezing out every penny worked for the landlord in most Ontario towns but now the rust belt is having to pick up the slack….the Scottish tendency may be obliterated after several generations of adherence.

#54 Ret on 12.16.13 at 10:39 pm

Me worry? Meh. This RE pony is unstoppable.

It would be a great time to privatize that CMHC book to some of those Golden Slacks guys! They can sprinkle pixie dust on crap and unload it when others can’t. Tranche away!

Maybe they could take on the Canada Student Loan program and Canada Post too. We could give them the full meal deal combo offer!

Problemo solved. That was easy.

#55 Shawn on 12.16.13 at 10:45 pm

What Blame?

Lots of discussion about who to blame for high real estate prices.

How about instead we ask who should take credit for a buoyant real estate market?

For low interest rates we can credit central banks. But also perhaps we can credit the fact that the world is apparently awash in savings available to be loaned out.

We can credit the free market, thank you Adam Smith.

We can credit willing buyers and willing sellers.

We can credit a job market which apparently is strong enough to allow actual buyers to make actual mortgage payments.

We can credit the mortgage industry.

We can credit the real estate industry.

We can credit all those who are optimistic enough to buy a home and think it is not a disaster to do so.

Thank you everyone for contributing to our buoyant economy and low interest rates that allows for such a strong real estate market.

#56 juno on 12.16.13 at 10:47 pm

http://www.huffingtonpost.ca/2013/12/16/canadian-dollar-loonie_n_4453787.html?utm_hp_ref=canada-business

Yep keep those interest rates low low low… Its making me tons on $$$..

Its like coiling up the spring. once you release the Demon, Bam!.

By keeping the Cansuck buck interest rates low. No-one will want the canadian dollar. Especially when you competition for $$ is the US which has been in the toilet for so long and now starting to rebound.

I think the world see the Canadian Real estate bubble forming and its a very safe bet the it will implode. When “don’t know” but I say with 4 years. If Europe, US and all the other country start to stablize. We will see just how wobbly the Canadian ecomony really is. Since our only industry is exports of raw material and real estate.

#57 dan on 12.16.13 at 10:49 pm

What the …. do Ukraine politics have to do with RE in Canada?

#58 meslippery on 12.16.13 at 10:49 pm

Get over yourself. Most FSBOs are a quagmire – fine for sellers, potentially awful for buyers. I will explain this to you soon. In crayon. — Garth

Maybe but 5% for a weeks work when the house sold its
self??? If you have the time to do your home work a
$600 000.00 home @ 5% $30 000.00 for a week or 4 work?? Please give me strength.

#59 X on 12.16.13 at 10:58 pm

Soldiers don’t run the war. — Garth

Well put.

I think I am the only one looking forward to tapering of the fed. Good to see the US economy slowly moving along. And as for the hissy fit that the markets will have over this, great buying opportunity.

Also looking forward to something from F in regards to cooling the RE market well before the spring market begins in a few more weeks. Prices are crazy, nobody disputes that, but they keep going up, the debt orgy needs to be slowed down.

#60 HDJ on 12.16.13 at 10:59 pm

“Get over yourself. Most FSBOs are a quagmire – fine for sellers, potentially awful for buyers. I will explain this to you soon. In crayon.” — Garth

So much for Christmas cheer. Many of your recent comments, like the one above, have been arrogant and mean-spirited. What’s going on?

#61 economictsunami on 12.16.13 at 11:00 pm

I seldom directly blame people.

Quite often the culprit tends to be a FUBAR process…

#62 piazzi on 12.16.13 at 11:06 pm

Garth says: “Then you are a fool. Most FSBO listings are to achieve one goal: being cheap. That usually mean you end up buying an over-valued property without any guarantee of adequate disclosure, no valid mechanism for redress in the future should issues crop up and the potential for serious legal issues in the event of a poorly-worded conditional or mishandled offer. FSBO has obvious advantages for sellers. The disadvantages for buyers are legion. Hence, my advice never to buy FSBO. — Garth”

Thank you for elaborating. It is generous of you that despite all sorts of blah-blah-never-ending-blah comments, you still take the effort to explain the point to those of us who just wonder and want to learn — thanks!

#63 piazzi on 12.16.13 at 11:08 pm

based on the table you posted, I guess it makes sense to buy a flat or two in Germany and rent them out, right?

#64 Andrew Woburn on 12.16.13 at 11:14 pm

#25 Ole Doberman on 12.16.13 at 8:59 pm
I still lose sleep at night thinking about the coming bail ins in Canada. Once the house of cards in RE gives be ready to give the bank support:

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

I can see why the Zerohedge article bothered you but the way I read it, the 5 Banks exchanged MBS for cash. There was a huge liquidity crunch after Lehman as banks were afraid to deal with each other so when our banks needed cash in the normal course of business they couldn’t get it from the usual sources. This is not the same as having no capital. It is true that many major banks were under-capitalized but the Basel III round of international banking rule changes is working to fix that.

Nobody seriously expects Canadian depositors to be bailed in but as I mentioned the other day, if you are really worried about it, make sure your cash is CDIC insured. If we ever encountered a catastrophe big enough that federal insurance fails, we’ve got a lot more to worry about than fiscal haircuts. I read Zerohedge too but with great caution.

#65 Knosty Knockerbickers on 12.16.13 at 11:15 pm

#10 Suede on 12.16.13 at 8:20 pm — “John McCain on Ukraine joining the EU or Russia,”
— plus —
“Soldiers don’t run the war. — Garth”
— and —
#50 A coutuire on 12.16.13 at 10:22 pm — “What annoys many observers is that John McCain is always sticking his nose in other countries’ business, be it in syria, Iran, Israel, etc.”

Methinx that RE, FSBO etc. won’t matter one bit when all is said and done.

Nostradamus Jr. (Dad) was bang on the money when he foretold a couple of years ago, that America was going to bankrupt the world by starting all these fake wars, then appearing out of nowhere to play the role of peacemaker.

Well, that’s a joke in itself. This outer, lowest physical level was designed to be a warring, violent world, and it always will be. The world itself is in pretty good shape, it’s most of the politicos / lobbyists (inhabitants) who are nutbars, and driven by other interests.

For example — China, Ukraine, Russia and America (with the Rothschilds, NATO, the CFR) and others’ backing is taking all of us along to be unwilling participants in WW3.

#66 Harboursnug on 12.16.13 at 11:16 pm

!!!!!!!!!! NEWS FLASH !!!!!!!!!!

You’ll be dead before it changes.

#67 Infused with Opiates on 12.16.13 at 11:19 pm

21 Simon Templar – I have CC debt and a truck loan. All
business related and run completely thru rhe biz, though
they will both show up on my personal credit record. I
know others that do this, though I am not sure how
representative we are.

#68 Jeremy on 12.16.13 at 11:25 pm

I think the housing mania is already over. It takes longer to sell a home now than in the last twenty years.

#69 US recovery continues on 12.16.13 at 11:34 pm

http://tinyurl.com/nyhyxuc

The 30 companies listed on the Dow Jones industrial average have authorized $211 billion in buybacks in 2013, according to data from ­Birinyi Associates, helping to lift the benchmark stock index to heights not seen since the tech boom of the late 1990s. By comparison, the amount is nearly three times what the group spent on research and development last year, according to data from S&P Capital IQ.

Why spend so much on stock repurchasing? When the number of shares outstanding falls, the value of each one goes up, instantly rewarding shareholders.

The repurchase also lifts earnings per share, an important number closely watched by investors — and by corporate boards in determining executive pay. Of the 30 companies making up the Dow index, all but four list earnings per share in their public documents as a metric used to determine executive pay.

#70 Suede on 12.16.13 at 11:37 pm

#55 Shawn

you forgot to credit/blame our wives! Or maybe further up the ladder it’s TLC, H&GTV

Why buy a Louis Vuitton when LVMH pays a dividend yield of over 2%.

Now that’s sexy.

#26 Yank in BC

Everyone has a right to their opinion and has the opportunity to get the facts if they so chose to make an informed opinion. WTF is an American Senator doing in Ukraine to further some hidden agenda?

http://www.businessinsider.com/john-mccain-meets-oleh-tyahnybok-in-ukraine-2013-12

That’s like Smoking Man coming to give a guest speech at my employee Christmas Party. Some things are just a bad idea! lol

Anyways, back to Real Estate…

FSBO or 1%, i agree bad idea. Pay for good advice/service. Unless you subscribe to gold newsletters right now.

#71 Canadian Watchdog on 12.16.13 at 11:38 pm

#64 Andrew Woburn

It is true that many major banks were under-capitalized but the Basel III round of international banking rule changes is working to fix that.

Basel III isn't going to fix $20.4 trillion dollars of derivatives held by Canadian banks. This is where counter-party risk is hidden, so they look solvant.

#72 Tony on 12.16.13 at 11:38 pm

Since America is insolvent the most likely scenario would be QE to infinity and for the FED to increase bond purchases.

#73 World According To Garth on 12.16.13 at 11:40 pm

http://www.news.com.au/technology/environment/snow-falling-in-australia-in-summer-that-is-all/story-e6frflp0-1226775945701

No comment

#74 FTP - First Time Poster on 12.16.13 at 11:41 pm

Garth says: “Then you are a fool. Most FSBO listings are to achieve one goal: being cheap. That usually mean you end up buying an over-valued property without any guarantee of adequate disclosure, no valid mechanism for redress in the future should issues crop up and the potential for serious legal issues in the event of a poorly-worded conditional or mishandled offer. FSBO has obvious advantages for sellers. The disadvantages for buyers are legion. Hence, my advice never to buy FSBO. — Garth”

What a load – any potential buyer should be putting “subject to lawyer approval” , “subject to inspection” and “subject to financing”. There’s nothing a realtor with a 5 day education can provide that my lawyer cant except a higher dollar per hour bill at the end.

#75 Suede on 12.16.13 at 11:41 pm

#49 Heineken

If pharmaceutical dealers and those types are accepting BitCoin, i wonder how long until we see newspaper headlines that they are seeking retribution and killing people that bought their products with inflated bitcoins and now they’re worth much less. OH THE HUMANITY

Shells were once considered money

Heck, my Eric Lindros rookie card once had value.

#76 Basil Fawlty on 12.16.13 at 11:41 pm

Buyers are to blame. — Garth

What about the $400B increase in CMHC loans? Buyers did not institute this policy.
How about Mark Carney’s below market interest rates? Buyers did not initiate these rates.
Buyers were inticed by these government policies designed specifically to stimulate the real estate market and economy.

“Those who forget history are doomed to repeat it”

#77 Tony on 12.16.13 at 11:49 pm

Re: #55 Shawn on 12.16.13 at 10:45 pm

In America the bankers got the blame. The same thing will occur here yet truthfully the root cause was the bankers making credit too free.

#78 US recovery continues on 12.16.13 at 11:50 pm

Hey Garth, the people do blame the government for the current RE situation
Vote here: https://www.surveymonkey.com/s/KMK89PT

Appears many people blame realtors for houses they can’t afford, as they rake off 5% of the purchase price in effortless commissions (or so it may seem). Hating real estate agents is just as easy as hating the Chinese (or the Iranians, or the Russians). Almost nobody blames their neighbour for selling at a crazy-high price, since that just makes your property worth more. And how about saving some venom for the feckless F, with his 0/40 policies which got the bubble puffed, or the Bank of Canada’s almost-free mortgages?

We do have at least 5 realtors around here.

One was stupid enough to put “buyers” in the Others field. Another one blames you for all these ☺☺☺☺

#79 Tony on 12.17.13 at 12:01 am

#39 Marco Polo on 12.16.13 at 9:54 pm

Also the shale plays in America will vastly increase oil production in the future.

#80 Dean Mason on 12.17.13 at 12:03 am

#25 Ole Doberman

I guess you don’t have silver and gold, copper etc. in some form.

These so called alternative guys are just as bad as any speculation, real estate, precious metals, commodities, stocks, bonds, managed futures, principal protected notes, mutual funds, ETF’s, gold stocks, mining stocks etc.

Silver was $50.00 in 1981 and reached that price, April-2011 and now it is $19.94 an ounce U.S dollars.

Gold was $1,910 an ounce U.S. dollars in August 2011 and now is $1,242.05 an ounce U.S. dollars.

This is without any commission of the lowest 5% to 10% on gold and silver when buying it physically.

I have seen some commissions or markups as high as 11% for gold and 20% for silver.

Silver is down 60% from more than 2.5 years ago and gold is down 35% from 2.33 years ago.

This is not including their markups which means some people have lost as much as 45% to 70% or more from gold and silver coins, bars etc.

Similar ETF’s are not doing any better and look at all those that said buy copper because China was going to buy it all.

I can go on and on, but these websites you go to have no clue just as much as everyone else.

#81 Sideline Sitter on 12.17.13 at 12:05 am

meanwhile, people can’t figure out how to retire…

we should be providing better financial education in high schools, but that might help people wake up so I doubt it’ll happen.

#82 Tony on 12.17.13 at 12:12 am

Re: #18 ralph ramsey on 12.16.13 at 8:50 pm

There would be a commodity boom until America loses its world reserve currency status.

#83 45north on 12.17.13 at 12:21 am

over/under evaluation of home prices
Canada 60%
US – 6%

The typical Canadian house now costs the same as two of them in the United States.

maintaining the price of Canadian houses would be about the last priority of the US Fed or the US gov for that matter

my thoughts: talking about landlords: So technically not only are they subsidizing their tenants, but they feel like they cannot sell because they will lose even more money. I would say the game is coming to an end.

me too

#84 Dean Mason on 12.17.13 at 12:24 am

#18 Ralph Ramsey

The 10 year U.S. bond was 4.00% before QE and operation twist started.

The 30 year U.S. bond was 4.80% before QE and operation twist started.

The U.S. 10 year bond is now 2.87% and it reached as low as 1.42% in Summer 2012.

The U.S. 30 year bond reached as low as 2.32% to 2.35% 2 times at least in the last 5 years.

The 30 year U.S. bond is now 3.89%. See a pattern, they went up but are still much lower.

The U.S. 10 year bond yield is still 28.12% lower and the U.S. 30 year bond yield is still 18.95% lower from around 3.5 to almost 4 years ago.

They might reach these yields again and down again they go!!!!!!!!

#85 AB Boxster on 12.17.13 at 12:28 am

Plenty of blame to go around for the mess.
No one wants to admit to it though.
Buyers, sellers, realtors, governments, etc.

I really hope that house valuations drop in half.
Maybe some day my kids, or their kids, might actually be able to afford a home if they want. I had that opportunity. I don’t think its healthy for our society to deny this to other generations.
High house prices are good for me personally, but I don’t think its good for society in general.

Its like taking the perspective that its really ok for university tuition to be rising far faster than inflation so that most graduates have massive debts. I don’t care , right, I got my education when it was cheap. Tough luck suckers.

Or hey, I love shopping at WalMart, buying all that uber-cheap shite. Tough luck to all those folks that once manufactured that stuff in North America. They can all retrain for what the new economy needs-more WalMart greeters. As long as I can get more ‘stuff’ for less, why should I care?

So now, governments cannot raise rates, as the risk of a housing crash is high. And rates stay low, savers are punished, boomers keep working because they can’t retire, youth are unemployed, governments are broke, pensions are failing, yada, yada, yada.

Lets see what eliminating QE II brings.

#86 Smoking Man on 12.17.13 at 12:28 am

Holly crap, sky net is forming right before our eyes, Google just bought Boston dynamics.

Will the real John Conner please stand up.

#87 bentoverand paying taxes on 12.17.13 at 12:32 am

Vancouver…a zombie city..as described in the Vancouver Sun

“Since Metro Vancouver is also being referred to as a hyper-expensive “zombie” city because of offshore speculators buying up properties and often leaving them empty, will Hong Kong’s moves inspire the governments of B.C. or Canada to bring in similar tax restrictions on speculators, foreign and otherwise?”

A very unpopular fact shunned by the fart catchers of the politically correct left. Why have foreign interests become more important than citizens? Why is it so politically toxic to say in Canada what the Chinese government itself recognizes.

http://blogs.vancouversun.com/2013/12/16/hong-kong-puts-15-per-cent-tax-on-foreign-buyers-will-b-c-follow-suit/

And seriously….FSBO’s a ‘quagmire”? Give your head a shake. Are you telling me you can’t pick up the phone when a buyer calls you…..put an ad in the local paper or Craigslist? Is it too much effort to save 30 to 50 grand having a lawyer review an offer? It beggars common sense that any seller would hand over that kind of money to a ill educated boob with a two week old real estate license. What do you think a realtor actually does that is so complicated? Selling your own home or buying a property FSBO is a no brainer. Have you evr purchased car or insurance? Buying real estate is less complicated and you’ll experiance far fewer a-holes or sleaze.

#88 wallflower on 12.17.13 at 12:53 am

Can’t blame realtor/agents for heated housing prices.
Little or nothing to do with their behaviour. Anyway they are too stupid for blame OR credit in regards to market moves.

I despise realtors not for commissions but for the zilch they do. I see them as people who have keys/passwords to lock boxes. That’s it.
? “Does this address get school bus service?” Realtor: Oh yes.
Three months later, parents go to register their children in the school and learn no bus service to that address.
? “Can you please obtain a copy of the rules of conduct for this condominium (e.g., pool hours, ages, etc.) before I put in an offer?”
Realtor: blank stare; never produces the doc.
? “This house has three bedrooms. I told you four minimum.” Realtor: but look, you can put an addition on over here.
Could go on for paragraphs… Actual experiences. Never have I met a listing or selling agent who could answer reasonable questions or follow simple directions.

And then, there is all the nonsense they speak in the actual bid/offer/close process. Unmentionably stupid stuff and some of it misleading. If Garth is going to say, “you did not have a good agent…” my response to that is, well, after having dealt with about 6 agents in my time, that’s 0 for 6. What are the percentages we are looking for? How many does one go through and how much time does one invest in this process to find the ‘good’ ones? And, why do the good ones earn the same commission as the bad ones?

And if we are to get back to the money/commissions, my goodness, how about their collective inability to spell? Shouldn’t they at least describe their listing with correct spelling, and use their adjectives appropriately for the wage they earn?
3 stories [storeys]
unspoiled basement [this unfinished basement descriptive is utterly inane, yeah, so the $80,000 basement reno is by definition a spoiled affair ?]
again, we could go on and on… with this long list of travesties. Realtor-speak in listings reminds me of Ontario public school end of semester student reports where teachers pick and check pre-determined comments that pump out in the comments boxes. There is zero creativity and we’ve seen all those descriptions many times before.

So there you have it. Realtors are automatonic, uninformed and persons with keys/passwords for lock boxes.
Overpaid.
But, I’d be happy to pay those commissions if I could see or feel the value.

#89 MEANWHILE IN FRANCE on 12.17.13 at 1:11 am

I keep looking at that list showing France as being over valued by a third. Scary. What if you’d take out Paris the picture might look different. (The same may be the case for Canada without Toronto and Van?)
Village houses as shown below, before renovations, are very likely available at 50.00 to 75.00/sqft, and after renos you are in it for 125.00, 140.00 tops.

Not all is rosy in France, but in the sum of all things……..

http://theceliachusband.blogspot.fr/2012/09/for-sale.html

http://theceliachusband.blogspot.fr/2012/03/la-maison.html

#90 Nemesis on 12.17.13 at 1:48 am

BedTimeStories for Historiographers & OtherNaughtyDogz…

After ParadiseGarden…

Eugene returned to SeriousWork. Many would argue that this is his last… poignant… Best [Tomoko Uemura in Her Bath]:

http://tinyurl.com/kjnn6fa

&After EugeneCouldn’t TakeItAnyMore?…

It was Don’s turn…

http://www.newyorker.com/online/blogs/photobooth/120917_war0009_p102.jpg

‘NB’: That was actually shot prior to Eugene’s Tomoko, but was NeverTheLess a ‘EugeneLegacy’Work – DeeplyEmbedded within the OrallyTransmittedTradition of BushidoGlassManShip]… see following.

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

Bonus McCullin [NotVeryZen]:

[UK Independent] – ‘Forget foreign conflicts, chronicle Britain’ says war photographer Don McCullin

“There’s a lot of snobbery about pictures taken on phones but a vision is a vision, I don’t care how you acquire it. You don’t think an artist is governed by the paintbrush or the pencil. An artist will find any means to create a work of art.” – Donald McCullin

http://www.independent.co.uk/arts-entertainment/art/news/forget-foreign-conflicts-chronicle-britain-says-war-photographer-don-mccullin-8947692.html

#91 Deflation or Inflation of Everyday Prices? on 12.17.13 at 3:11 am

Garth,

You quote the paper in a supportive manner when it says: “Canada’s, for example, is grappling with a slowdown in its economy and a worrying stagnation in consumer prices that’s raising the risk of deflation.” (i.e. lower prices for everyday items)

But then you claim: “The prices of everyday items – the cost of living, in other words – can relentlessly increase, as is now the case.

These two statements are contradictory.

#92 Freedom First on 12.17.13 at 3:46 am

#55 Shawn

Every once and awhile I give an award for one of “The Dumbest Posts Ever”. You have come close with other posts of yours, but tonight “You are a winner”.

#93 Frustrated Kiwi on 12.17.13 at 3:46 am

The issue I have with charts like the one above (which is similar to the one done by the Economist) is that they are “relative to historic averages” but I’m not sure the data series are long enough. Japan looks like it’s severely undervalued but it had its bubble in the late 80s, which is going to completely skew “historic averages”. How do Japan’s prices to rent or prices to income look now? Are they still high in absolute terms? If so, they could easily have more deflating to do. Similarly, it could be argued that NZ has had a structural bubble for a long time (not sure about Canada) – so actually our price to income ratios make us more overvalued than what is shown. I assume if one doesn’t use the historic averages it becomes very different to compare countries but it would also be good to report that ranking I think. My 2c.

#94 Buy? Curious? on 12.17.13 at 4:41 am

Wait! Did you say Ross Kay is making an appearance?

“(ex-real estate broker Ross Kay will be along tomorrow to tell you why)”

It will be like a facial hair Tag Team fighting Gary Klump and Brad Lamb for the Real Estate Predictions Belt!

http://www.youtube.com/watch?v=36OHZ51o2qo

Let’s open a can of whoop ass!

Oh, Dan @45, I can explain why the price difference is so great between Toronto and Montreal, Quebec. It’s like trying to date a stripper. She looked hot on stage, said the sweetest things but all she wants is your money, and will spend the rest of your time together playing mind games about leaving you and/or blackmailing you. Strip clubs, a nice place to visit but not the place to find potential Mrs Buy? Curious?

#95 Bob Rice on 12.17.13 at 4:53 am

okay don’t make agents extinct but please don;t tell me they deserve 2.5% of sale for what they do

#96 Eighty-Eighth on 12.17.13 at 5:21 am

88th!!!!

#97 Peter on 12.17.13 at 5:40 am

@#55 shawn

Well said, too many posters are here are just whiners, immaturity level in the first world is terrible, hoping everyone has a safe and happy holiday.

#98 Buy? Curious? on 12.17.13 at 6:29 am

Vancouver sucks! It always has sucked! It’s where misfits go to hide from their past mistakes.

http://www.theglobeandmail.com/sports/hockey/lucic-done-trying-to-defend-vancouver-after-altercation-in-his-hometown/article15986445/

#99 Ed L on 12.17.13 at 8:11 am

Hi Garth,

Thought you and the readers might find this interesting..

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices

Another take on Canada from a global perspective! Ouch!

#100 World Traveller on 12.17.13 at 8:22 am

Even some “HAM’s” are not happy about VCR situation.

http://www.scmp.com/comment/blogs/article/1372813/born-china-joy-mo-blames-rich-mainlanders-vancouvers-housing-woes

#101 T.O. Bubble Boy on 12.17.13 at 9:13 am

Oh goody – pre-housing crash HELOCs with 10 years of interest-only payments are now coming due:
http://www.cnbc.com/id/101268460

Hmmm, mortgages with low rates resetting can cause problems? But what about virtually every mortgage in Canada? Somehow our 5-year reset mortgages are “safe”, but these U.S. HELOCs are/were risky?

This will not end well.

#102 Paul on 12.17.13 at 9:55 am

#95 Bob Rice on 12.17.13 at 4:53 am

okay don’t make agents extinct but please don;t tell me they deserve 2.5% of sale for what they do.
————————————————————
maybe you are right if you what most agents do but seeing as you are on the outside looking in don’t tell me what anyone “deserves” in your opinion.
I am sure you must me over paid as well! Oh sorry I don’t know what you do for a living. If you feel the need to make something of your self go and get your real-estate license and make some undeserved money.
Maybe we could work together say from 8 a.m finish an offer by midnight.oh wait you will be home with your wife and kids.Well there is always Saturday and Sunday open houses. Wait again Son’s got hockey and daughters got soccer.Oh well guess we will leave it to the undeserved!!

#103 Paul on 12.17.13 at 10:08 am

88 wallflower on 12.17.13 at 12:53 am
How many does one go through and how much time does one invest in this process to find the ‘good’ ones? And, why do the good ones earn the same commission as the bad ones?
————————————————————20% of agents make 80% of the total commissions.
need to look a little harder .

#104 Shawn on 12.17.13 at 10:10 am

INCOME REDISTRIBUTION DONE RIGHT

Suede at 70 asks:

Why buy a Louis Vuitton when LVMH pays a dividend yield of over 2%.

******************************************
Good point. Rich people buying luxury goods is a a highly effective means of income redistribution.

$5000 which could be used to “claim” all manner of very useful goods and services in society is instead effectively wasted on a handbag that in reality should sell for under $200. Others,many of whom are less fortunate end up with the $4800 excess that is paid. Some of the money reaches shareholders of much more modest means.

The point is money is a claim check on goods and services and when rich people waste money, it does get recycled to others. Unfortunately the store clerk may not get much of it, but it does provide a job.

The free market actually does allow for a good amount of income distribution, especially when obscene luxury items are purchased.

The Income tax system steps in and does more redistribution and that is appropriate.

Charity is also income redistribution. People decry the wealth of Warren Buffett but fail to understand that 100% of his Berkshire Wealth (100%!) has been publicly pledged to charity. (He scrapes by on the less than $one billion that he has outside of Berkshire, and he is likely to donate much of that as well).

#105 Incubus on 12.17.13 at 10:26 am

“The prices of everyday items – the cost of living, in other words – can relentlessly increase, as is now the case. But the economy – as measured by wages, industrial output, demand and employment – can deflate at the same time.”

This called biflation: http://en.wikipedia.org/wiki/Biflation

#106 heinekein on 12.17.13 at 10:33 am

#75 Suede on 12.16.13 at 11:41 pm

#49 Heineken

If pharmaceutical dealers and those types are accepting BitCoin, i wonder how long until we see newspaper headlines that they are seeking retribution and killing people that bought their products with inflated bitcoins and now they’re worth much less. OH THE HUMANITY

Shells were once considered money

Heck, my Eric Lindros rookie card once had value.
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Suede, bitcoin is already on the surgeon’s table (that is, its being put to death). The BOYZ don’t like competition.

#107 AMAZON GIRL on 12.17.13 at 10:47 am

Garth ,Love the picture my heart this melt…

#108 Stickler on 12.17.13 at 10:49 am

@ #18 ralph ramsey on 12.16.13 at 8:50 pm

” House over 1 mln. when coffee is 5 $ and a loaf of bread 10 $ is not a big deal. Just hand in there. ”

—————————-
-> coffee is not $5 due to the price of coffee…just the gouging of trend following fools & the high cost of doing business in developed countries.

Coffee prices (for the actual coffee) are massively low right now…near 5 year lows, actually

#109 Stickler on 12.17.13 at 10:53 am

@ #39 Marco Polo on 12.16.13 at 9:54 pm

I don’t know if anyone noticed, but Mexico has just passed a law allowing foreign investment in their oil. For 70 years, only their state run company has developed their oil. Professional oil companies should extract much more, creating even more oil in North America, a flood really.

With Iranian oil coming soon, now Mexican, who will need Keystone, or Alberta oilsands? The high housing prices here in Alberta have nowhere to go here but down, like they did in the 80s, in almost the same circumstance.

——————————–
I was thinking the same thing.

#110 Daisy Mae on 12.17.13 at 10:59 am

#14 TO: “So, really it is all CMHC’s fault (creating demand by enabling giant mortgages for broke Canadians), and Parents (who instill house-obsessed value in their offspring over basic financial knowledge).”

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

….and the present federal government, first and foremost, for making it all sooooo easy.

#111 Daisy Mae on 12.17.13 at 11:07 am

#22 Dean Mason: “….and walking to get your snail mail.”

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

I’ve been doing that for the past 30 years. Anyway, with $1 postage stamps, Canada Post may well drive themselves out of business sooner rather than later.

#112 Land of Milk and Honey on 12.17.13 at 11:11 am

Things are changing here, in what used to be the “land of milk and honey,” (Alberta). Know of oil-patch companies with recent layoffs, and many with hiring freezes in place. Hope they don’t decide to pack up and go back to the States where labour is a whole lot cheaper. This has happened before, and could again. Workers told to drive the trucks to the border and hand over the keys. My daughter works for a small company that advertised for a receptionist; they received over 700 resumes. I know of graduates from a business college whom are still looking for work many months later.

#113 Curtis on 12.17.13 at 11:33 am

If the government can’t lower interest rates for fear of further bloating real estate, why don’t they pair up a rate reduction with a simultaneous scaling back of CMHC. Once bankers can’t write off large blocks of loans on the backs of taxpayers, the risk profile changes and rates will increase for residential borrowing. But low central bank rates will improve the cost of borrowing for businesses who will actually grow the economy.

#114 Shawn on 12.17.13 at 11:44 am

Thank You

Freedom First at 92 said:

#55 Shawn

Every once and awhile I give an award for one of “The Dumbest Posts Ever”. You have come close with other posts of yours, but tonight “You are a winner”.

*****************************************
Dude, you have no idea how true your conclusion is.

#115 Daisy Mae on 12.17.13 at 11:49 am

#58 meslippery: “…$600 000.00 home @ 5% $30 000.00 for a week or 4 work??”

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

But, hey! “We realtors have to live, too!” (This is an actual realtors quote)

#116 rosie "moving forward" in the knowledge that, "this won't end well" on 12.17.13 at 11:53 am

Words to live by.

http://demotivators.despair.com/demotivational/blamedemotivator.jpg

#117 frank le skank on 12.17.13 at 12:05 pm

There is no one to blame except the buyers because we have all the power. Its like the fools who went to Best Buy on Black Friday and bought 720P TV’s. Good job over paying for old HD technology that you could have got cheaper today. Marketing is a tool that takes advantage of peoples lazyness and impulsive nature. There’s no excuse for consumers in the days of the internet.

#118 Daisy Mae on 12.17.13 at 12:10 pm

#81 Sideline: “…we should be providing better financial education in high schools, but that might help people wake up so I doubt it’ll happen.”

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

Agree. But guess what? Finally…the kids are being taught another excellent skill in physical ed — CPR. That was a long time coming so there is hope. Duh!

#119 world view on 12.17.13 at 12:15 pm

Hi,

I am not sure if I could call what you have described as deflation. In a purely deflationary scenario, the price of goods and services decrease. You could call this asset deflation and simultaneous commodity inflation.

In a pure deflationary scenario, I think the debt held by companies become risky. If you are recommending people to buy corporate bonds/preferred shares for a higher yield, it also means that the risk is higher. Because the companies will find it harder to pay the interest back as the output/growth is falling while face value and interest/coupon on bonds staying the same. Yields are important but yield spreads are perhaps a better indicator of risk.

Ideally the companies/bonds that are low risk are those with inelastic demand for its products while the input costs are deflationary. Mobile and data network providers?

#120 Penny Henny on 12.17.13 at 12:26 pm

Garth says: “Then you are a fool. Most FSBO listings are to achieve one goal: being cheap.
—————————————————–
It’s not about being cheap so much as many of the FSBO crowd do not see the value in paying such an absurdly high commission.
Let’s say you have a $800,000 house in Toronto, in a desirable neighbourhood. Do you really see $40,000 of value in a realtor when a sale might happen in a matter of a week or two?
I’m not suggesting those with no RE experience jump in head first without seeing how deep the water is but for those with previous experience then why not?
Garth maybe from where you sit it is a matter of being cheap. Who knows, for you maybe $40,000 is just one weeks pay? But for many others it may equate to one year of work, another four letter word yuch!
If it was just about being cheap then I guess you could say that anyone who does not have a home cleaning service is also cheap.
I bet that would be 60% + or your readers.
Penny Henny
Shovel your own snow-cheap
Tims instead of Starbucks-cheap
Cook your own food-cheap

#121 happity on 12.17.13 at 12:45 pm

The taper won’t happen, the USA is more insolvent now than when it was in 2008.

The Chinese, Japanese and mid east are no longer buying USA debt and have established monetary exchanges ex USA dollar. The us $ is a dead man walking.

2014 will be the year the us$ is dethroned and devalued.

Digital wealth taxation and confiscation will follow. That will be the moment when those who sold all their tangibles for an entry on a computer screen will be wailing.

#122 Steven on 12.17.13 at 12:47 pm

I don’t think realtors should be let off the hook because they are only part of the problem. There is plenty of blame to spread around. Banks ,governments and home buyers who support real estate price inflation and existing prices are also to blame. They are all part of the problem and they are proud of themselves for what they have achieved. They are shamelessly proud of their sky high house prices. Sky high house prices are their financial god that they worship above all other things.

Thomas Jeffersons warning to Americans would also be valid for Canadians.
“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation,
the banks and corporations that will
grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered

Why would they be homeless? Low pay and real estate price inflation. A nation that does this to its people has had the biscuit.

#123 Pete on 12.17.13 at 12:51 pm

Believe it or not there are good, hardworking realtors out there. We recently sold our house, and we literally had one of the realtors in there on her hands and knees helping us scrub floors. They then worked hard to stage the house, bringing in their own furniture where needed. Our house sold in 4 days. They were then back in there on closing day, helping us clean and do things such as patch up holes in the walls. Who could begrudge them their commission?

The problem is however that these property bubbles also seem to help spawn a number of lazy, entitled realtors. For example we went to an open house recently, sale price in the $1.4M range. The owners were at the cottage, and the house was dirty, with peeling paint and an overgrown lawn. Maybe you could blame the sellers, but really if the agent was in line for a $35,000 commission, I feel she could at least have had the house cleaned and the grass cut!

#124 We the people... on 12.17.13 at 1:03 pm

To say that we as a nation have lost our way and spit on our forefather’s vision for this country is such a malapropism of the situation in Canada today, that words fail.

One only has to observe the glitterati of Canuckistan slowly dying by figuratively choking on their own crap, to realize just how far this has gone.

Usually these sociopaths can subvert the truth adinfinitum, but as any real doctor can tell you, a lot of illness is psychologically based.

We are a sick bunch Canada. We need help. We need better leadership than we are getting.

What we really need is low cost social housing for all of the poor people that live in Canada today and the millions more that will be considered to be poor in the near future.

The political party that can conceive of and produce cheap housing for the have nots, will change the face of politics and the economy in Canada.

A new economy is coming our way, and it won’t be about 5000 sq ft houses. If you went all in on a house or houses, then you are going to be very unhappy. To bad, so sad. It’s nothing personal, it’s just business.

As more people become have nots, the less that granite and stainless steel will matter. In fact conspicuous consumption may become a dangerous hobby.

As the old mechanic says, “you can pay me now, or you can pay me later”, we are already in the later part of this scenario.

We the people, deserve better.

#125 not 1st on 12.17.13 at 1:09 pm

Garth, you know why you got such a vicious response on your FSBO comment?

Thats because sites like that is where the hardcore property flippers live. You know the guys who put $500 of paint in a house and then try to relist it $10,000 higher a few weeks later or try to catch some nesting mom to be with some faux granite and Moen taps.

You would have thought that these flipper types would be retreating fast with the ever expanding housing bubble but nope, they are still lurking out there. Risk on baby.

#126 bentoverpayingtaxes on 12.17.13 at 1:11 pm

The slide in preferred shares has been ongoing and not just a recent phenom…..since 2012 the ZPR ETF has lost 13% in capital ……yields 4.5%….returns have been negative….worse they have lost ground both against inflation and opportunity cost. With rate sensitive issues under the gun now that rate increases are being priced in…..is it not time to abandon balanced investing philosophy and become a better stock picker? Won’t that part of the portfolio just serve to anchor a lower exposure to equities? Just asking.

Balanced portfolio return: this year 9.5%, last year 11%, last three years 8%, last nine years 7%. What’s wrong with that? — Garth

#127 Arse on 12.17.13 at 1:26 pm

2014 could be one heck of a year.
I expect markets to continue higher, including real estate.

#128 Bottoms_Up on 12.17.13 at 1:29 pm

Interesting article in The Economist on Blackrock. Talks of how it was started due to the (lack of) understanding of risk / systemic risk in investments. A nice parallel is drawn with today’s Canadian housing market, do buyers really know the extent of the risk that they are taking on?

#129 IM in C on 12.17.13 at 1:35 pm

Psst.. the Canadian housing market will not collapse. As Garth said, no Canadian government will bring in the economic policies that will delibertly crash it. As we have seen with previous downturns, the Canadian market will bite the bullet and do what they have to do to pay off their mortgages.

#130 John Prine on 12.17.13 at 2:12 pm

5 Daisy Mae on 12.17.13 at 11:49 am
#58 meslippery: “…$600 000.00 home @ 5% $30 000.00 for a week or 4 work??”

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

But, hey! “We realtors have to live, too!” (This is an actual realtors quote)
********************************************
Often it is 8 months of work on a $450,000 house with advertising costing hundreds a month and 100’s of hours spent on showings, realtor tours and open houses. Only a few markets where listings are 1 to 4 weeks. Our home took nearly a year to sell despite being aggressively priced…We didn’t begrudge the realtor commission at all.

#131 espressobob on 12.17.13 at 2:14 pm

Preferred shares in the crapper? Sounds like a buy to me! After all, what the hell to do with all that ridiculous profit from US & International markets that was taken. Even those REIT’s are getting sweeter if ya know what I mean.

One of the toughest things investors face ironically, is a bargain. Go figure?

#132 Canadian Watchdog on 12.17.13 at 2:25 pm

#125 not 1st

Actually it’s quite the opposite according to one study conducted by Northwestern University (Hendel 2009). The study found that FSBO sellers are more patient and earn a higher selling price (mainly from savings on commissions) then listing with a realtor and paying a commission fee; whereas sellers intending to sell a property quickly are more likely to list with an agent on MLS and pay a commission fee. After netting commissions, MLS sellers end up earning less, but sell their property within a shorter period.

Think of FSBO, MLS and presales as exchanges or platforms that offer different levels of service, risk and liquidity for investors. That’s the way I see it.

#133 Mark on 12.17.13 at 2:43 pm

“Psst.. the Canadian housing market will not collapse. As Garth said, no Canadian government will bring in the economic policies that will delibertly crash it. As we have seen with previous downturns, the Canadian market will bite the bullet and do what they have to do to pay off their mortgages.”

You really think the government has control over these things?

Once you’ve managed to disabuse yourself of that notion, then come back and talk.

#134 Old Man on 12.17.13 at 2:52 pm

Who to blame is a loaded question with an array of manifestations to ponder, but when all is said and done we must take personal responsibility, or is it all about the globalization? The corporations of today are farming everything out via the telephone system, as one never knows who they are talking to anymore to get the facts. It becomes a three ring circus, as they don’t know what I am talking about, and cannot explain Canada to them at all. Got a call from Bell again, and did this dance with her about a problem, so said where are you, and she said the Philippines.

I said so you really don’t understand the problem, and she said have no clue as we are all running separate systems, so we laughed about this all, and chatted about the weather, as she was working the night shift at 2:30 AM. Nobody with untold calls was ever able to bring up my order from Bell, but she could for December 14th, and said what does it say? She said the Internet and the TV were both to be done on the 14th. I said exactly, and such was changed so not my problem anymore.

#135 recharts on 12.17.13 at 2:55 pm

#129 IM in C on 12.17.13 at 1:35 pm
Psst.. the Canadian housing market will not collapse. As Garth said, no Canadian government will bring in the economic policies that will delibertly crash it. As we have seen with previous downturns, the Canadian market will bite the bullet and do what they have to do to pay off their mortgages.

Hey idiot!
Tell the above to the thousands of employees laid off recently from Blackberry,Heinz,BMO etc etc
Only stupidity like yours can create a bubble like this

Another intemperate post like this or your subsequent one, and you will be banned from this site. — Garth

#136 recharts on 12.17.13 at 3:04 pm

#123 Pete on 12.17.13 at 12:51 pm
Believe it or not there are good, hardworking realtors out there. We recently sold our house, and we literally had one of the realtors in there on her hands and knees helping us scrub floors. They then worked hard to stage the house, bringing in their own furniture where needed. Our house sold in 4 days. They were then back in there on closing day, helping us clean and do things such as patch up holes in the walls. Who could begrudge them their commission?

I think I am going to die by a heart attack reading stupidities like the above.
Buddy that was the most expensive house cleaner you ever hired ☺☺☺
No kidding, are they that desperate?
Did she bring the family pictures too ?

I think that you are not telling us the whole story. She is either your daughter or your (ex)wife

Your last warning. — Garth

#137 Raginnn on 12.17.13 at 3:09 pm

#129
“…..the Canadian market will bite the bullet and do what they have to do to pay off their mortgages.”

And what exactly will they do when they lose their jobs and their ability to pay their mortgages? Jobs are being shed every week and as we know, a lot of people mortgaged themselves to the hilt.

#138 recharts on 12.17.13 at 3:10 pm

The partial results of our poll
https://www.surveymonkey.com/s/KMK89PT

Keep voting in the next election and change the government because apparently they are the main reason for all this mess☺

The government for low interest rates
29.59%

The government for long term mortgages (0 down/40 years)
38.78%

The government for allowing CMHC to insure loans above 700K
35.71%

The RE boards for misinformation in regards to sales and sale prices
9.18%

The RE agents for unfair sales tactics and for talking people into buying/selling at unreasonable prices
5.10%

The mortgage agents for qualifying borrowers who would not normally qualify
9.18%

The investors and the speculators for adding an overhead to the entire price structure
5.10%

The regular buyers who bought more than they could afford or paid more than the real value of the property
34.69%

The banks for for qualifying borrowers who would not normally qualify and of low interest rates
18.37%

Responses
Other (please specify)

18.37%
18

#139 pbrasseur on 12.17.13 at 3:13 pm

In about 15 years from now, given demographics, health care will take about 70% of the Quebec provincial budget (it’s about 40% now), this is utterly unsustainable.
Yet the province is already drowning in debt, its infrastructures are crumbling, services are rationned, taxes and tariffs have already been hiked to the hilt (over which they kill growth and fiscal revenues) and are still rising.

The Maritimes and Ontario are heading down the same road, fast and we all know BC is a basket case with its negative saving rate, what do you expect when households need over 80% of their gross income just to service their property.

As for the “resources rich” prairies we are entering a slower commodity cycle that will last a long time, oil & (cheap) gas production is rising in places like the US and Australia, even Mexico will now get into the dance by exiting its state oil monopoly thus ramp up production.

What all that should tell you is this: The future wealth this real estate driven debt binge was based upon will not materialize. That’s just not possible and that can only mean one thing: we are poorer that we think, by quite a bit and no matter what form it will take we will know it in years to come.

#140 45north on 12.17.13 at 3:15 pm

Andrew Coyne does a good piece on Rob Ford:

I really don’t think, in short, that this is about cutting taxes and “watching every dime,” however much it suits both the right and the left to pretend it is. It’s about class. It’s about identity.

http://www.canada.com/Ford+emblematic+dark+place+where+politics+headed/9293594/story.html

speaking about the left, I got a signed Christmas card from Kathleen Wynne:

Best wishes for the holidays
Joyeuses Fêtes

Merry Christmas Kathleen

#141 Porsche on 12.17.13 at 3:16 pm

When the strongest economy in the world has an endless appetite for debt why should little you be concerned.

#142 Mister Obvious on 12.17.13 at 3:26 pm

#123 Pete

“…but really if the agent was in line for a $35,000 commission, I feel she could at least have had the house cleaned and the grass cut!”
——————————————–

Hilarious!

Granted, there are good hard-working realtors out there but even I don’t believe that sprucing up the property is part of their mandate.

If they volunteer that’s great (some would even say miraculous) but its rare agent indeed willing to soil their hands on basic yard work.

A few days ago, a commenter on this blog was chiding Garth for not correcting a link in one of his comments or something like that. Does that seem like a valid complaint to your way of thinking?

Several years back when I still owned a property I watched the completion of a sale directly across the street. The buyer’s agent showed up in her Lexus. She was dressed as if she had just come off the red carpet at the Academy Awards. She went into the trunk and got out her personal “sold” sign and a small hammer. She walked in high heels to the edge of the property and tapped it in. That must have been most physical effort she had expended on the job in months.

#143 skybluepink on 12.17.13 at 3:44 pm

One word of caution with FSBO’s (at least in regards to selling). Be very careful who you let in your house. Putting a sign on your lawn or an ad on the MLS etc is no guarantee that only people who are interested in your home will contact you. The one safety of listing it with an agent is they don’t give out the info to anyone, even if it’s another agent the access code is given to their office so there is a record of who is going in there and whether or not they are who they say.

I honestly don’t think enough people give value to safety aspect of it. I won’t even sell stuff online because I don’t want some random stranger coming to my door never mind coming into my house.

Just my 2 cents!

#144 recharts on 12.17.13 at 4:11 pm

Catch of the day

10 Gamble Ave. sold 231% of asking.

December 2014 is going to be the best December ever since A.D. 1 when they sold the stable!

And you say we should love the retards.

#145 Pete on 12.17.13 at 4:15 pm

#123 Pete

“…but really if the agent was in line for a $35,000 commission, I feel she could at least have had the house cleaned and the grass cut!”
——————————————–

Hilarious!

Granted, there are good hard-working realtors out there but even I don’t believe that sprucing up the property is part of their mandate.

If they volunteer that’s great (some would even say miraculous) but its rare agent indeed willing to soil their hands on basic yard work.

A few days ago, a commenter on this blog was chiding Garth for not correcting a link in one of his comments or something like that. Does that seem like a valid complaint to your way of thinking?

Several years back when I still owned a property I watched the completion of a sale directly across the street. The buyer’s agent showed up in her Lexus. She was dressed as if she had just come off the red carpet at the Academy Awards. She went into the trunk and got out her personal “sold” sign and a small hammer. She walked in high heels to the edge of the property and tapped it in. That must have been most physical effort she had expended on the job in months.
——————

I think I am going to die by a heart attack reading stupidities like the above.
Buddy that was the most expensive house cleaner you ever hired ☺☺☺
No kidding, are they that desperate?
Did she bring the family pictures too ?

I think that you are not telling us the whole story. She is either your daughter or your (ex)wife
———————

Why do you find it funny (or desparate) that somebody is actually prepared to do some hard, dirty work – even a realtor? Are you some kind of a snob?

In any case, I am suggesting that in the second instance I mentioned, the relator could have hired the kid down the road to mow the lawn for 25 bucks – did not have to do it herself.

#146 recharts on 12.17.13 at 4:19 pm

Your last warning. — Garth

Garth, sure, by all means, do it. I need more time for my things and it seems that this is addictive.

As you like to say, it is a free country ☺ ..as in free lunch.

#147 Rational Optimist on 12.17.13 at 4:24 pm

#124: You lost me at “glitterati,” I’m afraid…

#148 45north on 12.17.13 at 4:26 pm

We the people: To say that we as a nation have lost our way and spit on our forefather’s vision for this country is such a malapropism of the situation in Canada today, that words fail.

you mistakenly assign American ideals to Canada. The phrase “we the people” is associated most closely to the American constitution.
http://en.wikipedia.org/wiki/American_Constitution#Preamble:_Authority_and_purpose

the phrase “we as a nation” is very close to “we the people”

The word forefathers also is closely associated with the founding of the United States:
http://www.loc.gov/loc/lcib/9805/religion.html

you mistakenly assign us American ideals and then accuse us of betraying them.

guilty as charged

#149 Pr on 12.17.13 at 4:29 pm

…expect more real estate thumping from Ottawa, early in 2014.

hey have to press on the break, much harder and faster!

#150 economictsunami on 12.17.13 at 4:46 pm

The BOJ is experimenting with QQE (both qualitative & quantitative easing) to attain a stated 2% inflation rate but double that will become the accepted norm in many western economies…

Wolf @FT: Why Abenomics will disappoint

http://tinyurl.com/kgu2qh5

#151 Rational Optimist on 12.17.13 at 4:47 pm

139 pbrasseur on 12.17.13 at 3:13 pm

Your commodity cycle (you’re right about it) means that the Canadian dollar will lose value at a quickening pace. We’ll get some good inflation going as all of our imports go up in price. That means that a lot of us won’t be able to afford the things we like, but it will mean manufacturing and other export sectors in Ontario and Quebec will seem more competitive. The U.S. is about to take off for real, and as always we’d have to really try in order to blow the opportunity.

It’s going to be great: we’ll be 20 or 30 percent poorer (how low can the Canadian dollar go? A long way, it was below 80 cents just four years ago), but it’s okay, we’ll hardly notice. For the spendthrift provincial governments, this will be perfect. They’ll have had no direct part in wages going down, and most people won’t believe that they have, and the flow of manufacturing jobs will slow and even reverse.

It’ll be fine.

#152 Steven on 12.17.13 at 4:56 pm

What does freedom require? Answer freedom requires fiscal and moral rectitude and the rule of a few good well thought out laws plus the willingness to kick the butts of those that go too far and commit crimes even when they are the government. Rot at the top of society has to be purged every now and then or you wind up with a wicked society and slave state.
Elections don’t purge rot, they safe guard it.
Here is an educational cartoon that gets the point across.

The American Dream

http://www.youtube.com/watch?feature=player_embedded&v=mII9NZ8MMVM

Why are you anti-American? There’s enough crap to fix here. — Garth

#153 Smoking Man on 12.17.13 at 5:16 pm

From the National Post

Rob Ford offered an attempt at an apology to the Toronto Star’s Daniel Dale Tuesday but the reporter said “no dad or teacher would accept that apology as sufficient” and is proceeding with his defamation lawsuit against the mayor.

Note:

Notice how Danny boy used the Word teacher.
Who needs a god to pray too when you have a teacher to worship.

The whole sale dumbing down of this generation of 30ish has taken hold. Now these 30ish are teaching.

Home schooling is all I’m saying.

#154 Canadian Watchdog on 12.17.13 at 5:18 pm

#150 economictsunami

Japan has tried everything. Buying bonds, mortgages, ETFs…you name it. There's nothing they can do other then keep doubling down on bonds until pension funds sell everything. Once that happens and 10yr yields rise to 2-2.5%, Japan's interest payments will be or exceed 100% of revenue. And that's the Keynesian endpoint. Chart

#155 Devore on 12.17.13 at 5:21 pm

#132 Canadian Watchdog

The study found that FSBO sellers are more patient and earn a higher selling price (mainly from savings on commissions) then listing with a realtor and paying a commission fee;

Except where the seller is the realtor. Realtors’ own houses fetch consistently higher sale prices than comparable sales. Though you could say they are in essence FSBO.

#156 -=jwk=- on 12.17.13 at 5:35 pm

And seriously….FSBO’s a ‘quagmire”? Give your head a shake. Are you telling me you can’t pick up the phone when a buyer calls you…..put an ad in the local paper or Craigslist? Is it too much effort to save 30 to 50 grand having a lawyer review an offer? It beggars common sense that any seller would hand over that kind of money to a ill educated boob with a two week old real estate license. What do you think a realtor actually does that is so complicated? Selling your own home or buying a property FSBO is a no brainer. Have you evr purchased car or insurance? Buying real estate is less complicated and you’ll experiance far fewer a-holes or sleaze.

You have inadvertently proved garth’s point. Every single advantage you outlined is for the seller. A buyer has NO reason to but from an FSBO, and many, many reasons to not buy from one (overpriced crazy people is just the first). You’d have to also be a little crazy to throw 800k at a seller (won wont accept conditional offers, btw, because their place is like super rare and amazing!) without the protection of a brokerage.

#157 Smoking Man on 12.17.13 at 5:48 pm

Continued from 153

And you guys are all scratching your heads why condos keep selling Toronto.

The 30 ish buyers have all been super schooled.

#158 Spiltbongwater on 12.17.13 at 6:02 pm

Gosh. Who will we blame then?

I think most of this mess is squarely on Obama.

#159 Shawn on 12.17.13 at 6:10 pm

A CANADIAN DOLLAR IS ALWAYS WORTH A DOLLAR IN CANDADA

Rational Optimist just above said:

It’s going to be great: we’ll be 20 or 30 percent poorer (how low can the Canadian dollar go? A long way, it was below 80 cents just four years ago), but it’s okay, we’ll hardly notice.

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We’ll hardly notice because it’s not true. Just like most peolple were not noticeably richer when our dollar rose dramtically, only those who spend much outside of Canada.

#160 Shawn on 12.17.13 at 6:47 pm

Japan

Canadian Watchdog said:

Once that happens and 10yr yields rise to 2-2.5%, Japan’s interest payments will be or exceed 100% of revenue. And that’s the Keynesian endpoint.

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I believe Japan borrows in its own currency and therefore can print to pay if needed. Greece situation, for example was far different as they borrowed in harder currency that they could not print.

#161 Mister Obvious on 12.17.13 at 6:52 pm

“…the relator could have hired the kid down the road to mow the lawn for 25 bucks – did not have to do it herself.”
—————————-

The owners themselves could have done the same thing. Evidently, they didn’t care enough or they believed the house is simply greater fool bait with no pre sale care required.

If I take my car in for servicing and they decide to give it a free wash, that’s nice. I’ll probably even remember that.

But I certainly don’t expect it.

#162 espressobob on 12.17.13 at 7:03 pm

#159 Shawn

A declining ‘CAD’ will be a bitch for us importers who simply pass the cost on to our customers. How much can they bear? The more the better I hope? Won’t hold my breath? But where can they go?

As an investor on the other end, USD rocks.

#163 Zeeman1 on 12.17.13 at 8:23 pm

#124 we the people.

Nice rant, chum.

Um, like, who pays for all that affordable housing?

Are there magical free lunches in your world?

#164 Daisy Mae on 12.17.13 at 8:46 pm

But, hey! “We realtors have to live, too!” (This is an actual realtors quote)

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#130 John Prine: “Often it is 8 months of work on a $450,000 house with advertising costing hundreds a month and 100′s of hours spent on showings, realtor tours and open houses. Only a few markets where listings are 1 to 4 weeks. Our home took nearly a year to sell despite being aggressively priced…We didn’t begrudge the realtor commission at all.”

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That’s not a common scenario. Houses in my community are selling without a realtor.

However, with a realtor sales can happen overnight. A few years ago a realtor had a buyer waiting in the wings for creek property. He expended no effort at all. But collected full commission. This realtor has a rep no one would want….

#165 Daisy Mae on 12.17.13 at 8:47 pm

#130 John Prine….

Open houses only benefit the realtor.

#166 Daisy Mae on 12.17.13 at 9:07 pm

#143 Sky: “I honestly don’t think enough people give value to safety aspect of it. I won’t even sell stuff online because I don’t want some random stranger coming to my door never mind coming into my house.”

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That is a very good point. An agent in the Victoria area was murdered by clients she was scheduled to see at a listed house a few years ago….they’ve never found the killers.

#167 Ray Skunk on 12.18.13 at 11:02 am

Bitcoin lols this morning…

http://www.bbc.co.uk/news/technology-25428866

#168 live within your means on 12.18.13 at 6:21 pm

Rec’d an Xmas card from a sis in Mtl. On the back was a sticker from Canada Post – Mail item found damaged, torn or opened & officially repaired – w/a signature & date on it. There was no obvious damage, etc. Wonder how many others rec’d the same? More prop from Harpie.

#169 Ogopogo on 12.18.13 at 9:02 pm

#55 Shawn

And to think I used to respect your opinions…