Hard or soft?

“If I got massaged as much as the real estate board massages their stats, I wouldn’t have a sore back.”

Thus sayeth a veteran realtor who dares sneak onto this site under cover of darkness, after parking his Audi A7 in an alley behind realtor.ca. Yet even with all that massaging, it’s still ugly out there. Getting uglier. And now that the Fed has spoken, well, look out below. For a few months there’ll be no bottom.

As reported here yesterday, confirmed today, GTA sales rocketed lower 41% in May, accelerating the decline each week. (Sales tanked almost 30% from March to April alone.) “It certainly appears that the Bank of Canada is achieving its goal of slowing consumer spending as it fights high inflation,” deadpanned the local board boss, Kevin Crigger. “Negotiated mortgage rates rose sharply over the past four weeks, prompting some buyers to delay their purchase.”

Actually what’s happening is two-fold. Lots of newbies just don’t qualify to buy at 4.5% like they did at 2%. Plus a whack of first-time buyers have wisely backed off, knowing that any deposit of less than 20% now could see them in negative equity by Labour Day. Or sooner.

As also reported here. It’s the burbs and Bunnypatch being whacked the most. Detached sales in 905 cratered by 47%. Towns were down 44%. In 416, by contract, the SFH damage was ‘just’ 34%. But remember. This is for April. Traditionally one of the frothiest times of the year for residential sales. Year/year prices are still up, but that $2 million+ number we hit a couple of moneys ago is gone. If you bought ion March you paid $134,000 too much.

Not just the GTA, by the way. Sales have plopped in Vancouver, too. And look at the price correction taking place in K-W – where valuations rocketed by 40% in the crazy times.

Well, that didn’t take long. Down she goes.

Source: Bob de Pasquale, Peak Realty; Kitchener-Waterloo Association of Realtors

The writing’s on the wall. Central bankers have been as suggestive as Kim Kardashian’s MM dress. There’s nothing to hide. Up go rates. Down go houses.

Here is our realtor buddy’s take on what comes next:

We have just scratched the surface in the Bank’s battle to tame inflation. This will be painful for some who are heavily leveraged. The savers and long term diversified investors on the other hand will sleep just fine at night. The Trudeau government knew this which is why they have negotiated a virtual Majority in the House with the NDP until 2025. Fighting inflation is politically unpopular.

Further, in a rare lucid moment a month or two ago, I suggested that the market would quickly correct with a 10% drop followed by a plateau which would draw the dreamers and schemers back into the fray. But it will then dawn on all concerned that getting inflation under control can take years not months, and we will drift down further to a hard landing.

Indeed. Normalized mortgage rates (5%, 6%, 7%) mean real estate values go down. They have to. The universe of available buyers shrinks with each quarter-point increase. Sale prices are shedding thousands of dollars per day in major centres and (especially) the bloated hick cities in their commutershed. Even with inventory levels declining, we are rapidly approaching a buyer’s market. So imagine what happens in a few months when the MLS is swollen with owners trying to cash out and yet buyers still afraid of paying too much.

It’s classic. Many of us have seen this before. Most have not.

Meanwhile America’s on the move. For the first time in 20 years, the Fed has goosed rates a half point. Bond yields have jumped. Mr. Market is pricing in additional half-point surges in June and again in July. By the end of the year the CB rate there will be (likely) 3.25%. It was 0.5% on Wednesday morning, before the move. You can see where this is headed, and what lies ahead for Canada. After all, our central bank has followed the Fed 94% of the time.

The Fed’s also shrinking its massive balanced sheet (as our guys are doing) and launching the most aggressive tightening policy in decades. Treasury Secretary Janet Yellen says “a soft landing is possible.” In other words, inflation gets creamed but the economy does not.

We’ll see. This has only started.

Finally, a word to those who think if the price of a house in Kits or Etobicoke declines 15%, or 40%, the economy will collapse taking financial markets with it. You are flat wrong. Real estate can correct, yet the sector will carry on – construction, financing, leasing, buying and selling. Oil prices, bank stocks, bond yields, the TSX – none of it will be impacted if over-extended buyers slide into negative equity. Canadian residential real estate can easily shed a huge amount of equity, retreating to 2015 pricing (for example – minus 50%), and stock markets will be just fine. This is not the US in 2005 when mortgages were sold en masse by Wall Street firms in dodgy, mislabeled and risk-laden CDOs which later collapsed. Canadian lenders will be fine. It’s the borrowers who get Hoovered. And in Canada (well, almost all of it) there’s no jingle mail. Nobody in Ontario or BC, for example, walks away from a mortgage unscathed.

In short, everything this pathetic blog tried to instill in readers was proffered for a reason.

This is it.

About the picture: “Writing in from Richmond, BC,” says Cory. “Naomi was our faithful and extremely mischievous golden/lab retriever mix. She followed us through our property journey from renting -> buying small townhouse -> buying large townhouse for many years before passing away just after our daughter was born. She was a very stubborn but very loving dog and we all miss her dearly! Often she would sit under our desk eating whatever leftovers she could get her paws on. Many thanks for your advice over the years! Rule of 90 and being diversified have kept our net worth growing safely while not being over leveraged here in the craziest housing market… perhaps ever!?

133 comments ↓

#1 Magnifico Giganticus on 05.04.22 at 3:14 pm

Fun Fact.

Realtor.ca is owned by Rupert Murdoch. The most dangerous and evil man alive today.

#2 Fran on 05.04.22 at 3:17 pm

Garth. What should I do. I want to buy a condo in downtown Toronto. Do you think prices will drop a little or maybe a lot. What do u suggest.

#3 Flop… on 05.04.22 at 3:17 pm

Inflation forced their hands, but it’s good to see the Central Banks around the world put some sort of value on money again.

They waffled more the last decade than The Waffle House…

M47BC

#4 Summertime on 05.04.22 at 3:18 pm

Lenders will be just fine.

Of course. CHMC and the government will bail them out if needed. Lenders not having a skin in the game is the problem in first place.

Think about it: What would happen with the lenders if the mortgages were not ‘insured’ and there were no central ‘banks’ so the rates have to track the real inflation, like 15 % at the moment?

#5 TurnerNation on 05.04.22 at 3:19 pm

Hard or Soft…eggs? Which did F prefer. By hand. :-o


Interest rates & Debt levels & Gas prices. The best type of Tax Farm Slave is one worried where from his next mortgage payment or gas fillup will be coming.
I maintain the past two years of ceaseless “Rules”, most pointless, have been training us.
Come on — roping off “Non essentials” in stores and hurting small business, is not science. It is a sh-t test. To see how much we will swallow. Our rulers got us kneeling down and kissing their ring. All while waiting in line, 6-6-6 feet apart.


— Which led us to a whole new layer of well-paid enforcers. 101 new rules and fines Comrade.
Everything old is new again.

https://en.wikipedia.org/wiki/Apparatchik
“An apparatchik (/ˌæpəˈrættʃɪk/; Russian: аппара́тчик [ɐpɐˈrat͡ɕːɪk]) was a full-time, professional functionary of the Communist Party of the Soviet Union or the Soviet government apparat (аппарат, apparatus), someone who held any position of bureaucratic or political responsibility, with the exception of the higher ranks of management called nomenklatura. James Billington describes an apparatchik as “a man not of grand plans, but of a hundred carefully executed details.”[1] “

#6 Classical Liberal Millennial on 05.04.22 at 3:23 pm

On this Star Wars Day, Darth Garth has been proven correct once again.

#7 Captain Uppa on 05.04.22 at 3:24 pm

Despite the rantings of all the amateur economists at my work, I plowed a chunk of available cash into my 70/30 TFSA.

“You’re gonna get crushed” said one Rosenberg wannabe.

And it made me feel even better. Garth is smiling down on me from his fancy high rise office.

#8 crowdedelevatorfartz on 05.04.22 at 3:25 pm

Down she goes and where it stops……nobody knows.

#9 calgary on 05.04.22 at 3:25 pm

When will we see mortgage rate @17%?

#10 Sam on 05.04.22 at 3:28 pm

As I’ve been stating on this blog – Looks like the Fed isn’t in a hurry to raise rates any further than the .50 today. Let the real estate market price escalation resume!

Ah, dude, the Fed is US. – Garth

#11 Summertime on 05.04.22 at 3:30 pm

Markets calling the Fed’s bluff.

Dow, Oil, Gold up. I give it ceiling of the rates of 2.5 % max.

#12 Jim on 05.04.22 at 3:32 pm

Question for Garth.

Will the CB back off its tightening if Canada experiences high inflation along with negative growth. I could be wrong but I think we’re headed for a downturn in the next 16 months.

Why? – Garth

#13 Dave on 05.04.22 at 3:32 pm

Russia will be declaring War on Ukraine within weeks. This enables Russia to open up the War Chest full of War tools.

Shortly after EU will put an Embargo on Russian oil to counter Putin and reduce his profits.

This will put Oil at $175ish levels. Inflation will be unbelievable. Will the central banks have the courage to increase rates by .75%????

#14 Sail Away on 05.04.22 at 3:37 pm

“In short, everything this pathetic blog tried to instill in readers was proffered for a reason.”

———

That’s cool. Thanks Garth. We do like RE… but the remote and undeveloped kind, not houses, except the house we live in, which is perfect.

Morel mushroom season approacheth. This year, we’ll be starting somewhere around the area previously known as Lytton and will progress from there based on rumours, vague hunches, and the whisperings of fairies. Our morel-sniffing dogs can’t wait. Heck, I can’t wait for camp meals of fresh trout accompanied by wild asparagus and morels in a garlicky white sauce and peat-ey Scotch telling lies around the campfire. Oh boy.

#15 Søren Angst on 05.04.22 at 3:43 pm

BAD HAIR DAY for the Hermit Kingdom of Russia:

1. EU oil embargo (yeah oil, Grazie Ursula) + a lot more *
https://twitter.com/vonderleyen/status/1521785907745021953

2. PUTIN CANCER operation.
https://www.aftonbladet.se/nyheter/a/z7K5br/enligt-ryska-uppgifter-ska-putin-opereras-for-cancer

3. Bank of Russia: deindustrialization of Russia brief out today, 10 year rollback.

4. Numerous military defeats in the past 24 hr. incl. some Snake Island payback.
https://youtube.com/watch?v=nGj2UymNcQg
https://youtube.com/watch?v=uo8foiQK8yI
https://youtube.com/watch?v=kr5woG5CTXg
https://youtube.com/watch?v=kdM5F51nqB4
…there are many, many more for the past 12 hr alone.

*
-No oil imports within 6 mo.
-No refined liquids with 12 mo.
-Blockade of 3 largest broadcasters from EU airwaves, Internet, etc.
-Restoration money for Ukraine once war over, continued funding for war.
-3 largest banks out of Swift incl. Sberbank their largest, 37% of all deposits.
-Sanction War Crime soldiers “We know who you are and you won’t get away with this.”
-Sanctions on Patriarch Kirill, “Putin’s altar boy” per Corriere della Sera.

Energy exports to EU represent 45%, FORTY FIVE PERCENT, of the Russian Gov budget per France 24 today.

EU energy imports from Russia in $ terms, 2021 data (UK embargoes already):

https://www.statista.com/statistics/1281752/eu-energy-import-value-from-russia/

Again, 2/3 gas usage gone end of year, oil gone in 6 months, coal already embargoed, gas diesel (refined liquids) gone in 12 months.

Total lost out of USD $147.8 billion:

97.6 billion in 6 months time
133.3 billion in 12 months time

————————

Viva L’Unione Europea. Slava Ukraini.

PS:

Italia (Draghi) ** wants to accelerate EU expansion + Ukraine.
https://www.rainews.it/articoli/2022/05/draghi-a-strasburgo-9d421b67-2084-41c4-93ff-7000dd2daf62.html

** THE Architect of freezing Russian Gov Assets Worldwide “Whatever it takes” Mario.

#16 jack on 05.04.22 at 3:47 pm

I’m FED up with free money and high house prices….inflation or not, this is overdue.

#17 Søren Angst on 05.04.22 at 3:52 pm

WHAT a day for Mr. Market and my Threadbare Portfolio:

May 4, 3:48:38 PM UTC-4

yeah oil ETF/ETN +2.36%, +2.39% (again, Grazie Ursula)

yeah Maple ETF +3.75%

Dow Jones Industrial Average +2.89%, +956.87 pts

All this ’cause Fed went +0.5% rate hike, alleviates fears of future +0.75% rake hikes.

—————

yeah Mr. Market & Ursula.

#18 Steven on 05.04.22 at 3:53 pm

#13 Dave on 05.04.22 at 3:32 pm
Russia will be declaring War on Ukraine within weeks. This enables Russia to open up the War Chest full of War tools.

Shortly after EU will put an Embargo on Russian oil to counter Putin and reduce his profits.

This will put Oil at $175ish levels. Inflation will be unbelievable. Will the central banks have the courage to increase rates by .75%????

——————————————————————

Dave: Special mission is the new and WOKE word to replace the word WAR….easier for the masses to stomach. Much like Gaming vs. Gambling, Convenient lies vs. Truth…you get the picture.

Yes Dave Bombing and killing, displacing millions kinda comes with WAR that is what the west is in now vs. Putin. Also makes a nice distraction for the media to take the focus off the reaming the masses are taking from the banks money moves over the past 11 years that are now finally here…Plus Joe and co. make a few million here and there actually producing something to send over to Ukraine to fight the war. They have to earn their keep somehow don’t they?

1.75% rates? Not in our lifetime…..

#19 Old Boot on 05.04.22 at 3:54 pm

#172 the jaguar on 05.04.22 at 3:23 pm
@154 Stop hitting on me, lol

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

Fat chance AGP. I don’t cook with eggplant.

#20 THE DANDADA on 05.04.22 at 3:56 pm

Time to raise wages and resume the bullmarket.

LET’S GOOOOOO!!!!

#21 Caffeine Monkey on 05.04.22 at 3:57 pm

Fake news! Realtors and mortgage brokers tell me that the BoC will NEVER allow rates to rise!

#22 Søren Angst on 05.04.22 at 3:59 pm

It’s classic. Many of us * have seen this before. -Garth

* Us Paleos. Like a quasi-fine wine + “shimmering abs” (mine in hiding underneath a Pandemic Paunch)

It’s ‘gonna be a ROUGH RIDE for the Speculators. Greed. Avarice. Time to Pay the Piper.

Great news for the KIDS as Cdn RE will become more affordable for them later this year.

#23 Overheardyou on 05.04.22 at 4:01 pm

If there is no jingle mail, what happens if someone can’t afford their renewed mortgage payments? Does the bank just tack on interest charges and extend the loan?

#24 jimmy zhao on 05.04.22 at 4:02 pm

@ #15 Søren Angst on 05.04.22 at 3:43 pm

Have you considered that Putin himself is the cancer ?

#25 Omicron Kenobi on 05.04.22 at 4:02 pm

MAY THE 4TH BE WITH YOU.

Never forget, Garth, I and my offspring variants are still in charge, and we have many more surprises ahead for you.

A real estate plunge is trivial compared to the devastation we will bring in the 7th, 8th and 9th waves.

MAY THE 4TH BE WITH YOU.

And the Pfizer. You’ll need them both.

#26 millmech on 05.04.22 at 4:03 pm

My bank has a five year fixed closed posted rate of 5.39%, stress tested at 7.39%, 10% stress test by the end of the year is quite possible now.
A 700k mortgage stress tested at 4%-$3694, 7%-$4950, 10%-$6370, so roughly in a year the mortgage stress test dollar amount could have doubled.

#27 IHCTD9 on 05.04.22 at 4:08 pm

I think the doctrine of doom being preached by the BoC and FED is winning converts. Can’t wait frankly. I spend time I’d normally use to check out the B+D on looking at the MLS instead. I bet PEC is in the blast zone right now – far from the GTA and not quite so sunny as it was back in the days were a 5’er could be had for 1.5%.

Hopefully I can find some numbers with an honest sore back.

#28 Sail Away on 05.04.22 at 4:12 pm

Hey Ponz, I hope you bought when I told you this morning and joined me in catching today’s 3% gain.

If not, you have only yourself to blame. Just call me the ‘Good Deed Dude’.

#29 Søren Angst on 05.04.22 at 4:13 pm

#13 Dave

I know you are Cdn MSM informed, which equals Zilch on what’s happening in the EU, but oil embargo starts tomorrow (read my Comments) and as for War/Immobilization Russia…

That will take months, let alone training them (if they do at all, affectionately called “Cannon Meat” by the Ukraine Army as of late).

Russia Gov offers many rubles to soldiers that sign up.

By then, the BRIBERY Larder will be EMPTY.

Forgot, they are in DEFAULT of Sovereign Debt Bond payments in $US of about $600M.

Russia:

3rd World Hermit Kingdom.

GOOD.

#30 DON on 05.04.22 at 4:14 pm

#13 Dave on 05.04.22 at 3:32 pm
Russia will be declaring War on Ukraine within weeks. This enables Russia to open up the War Chest full of War tools.

Shortly after EU will put an Embargo on Russian oil to counter Putin and reduce his profits.

This will put Oil at $175ish levels. Inflation will be unbelievable. Will the central banks have the courage to increase rates by .75%????

*********

What happens if they don’t tame inflation and let it go unchecked….?

#31 Dogman01 on 05.04.22 at 4:17 pm

“Statistics are like a bikini, what they reveal is interesting but what they conceal is critical”

22.73% of Canadians believe statistics are made up on the spur of the moment.

Anyone know if this is KPMG cronyism again?

CRA staff divided over controversial tax deal granted to multinational corporation

https://www.cbc.ca/player/play/2029687875716

#32 Jason on 05.04.22 at 4:23 pm

I bought in “Bunnypatch” on the Sunshine Coast in BC, back in March 2020, just before COVID hit, and prices here absolutely exploded since. Right now, and it’s early, it looks like SFD houses under 1 million are slightly below the peak in February but houses over 1 million are dropping fast.

That being said, very happy with my B&D portfolio. Only down 5.12% YTD after todays pop, which lets me sleep at night. Garth, thank you and your crew for all you dudes do.

#33 Oakville Stinks on 05.04.22 at 4:24 pm

This reminds of the an old classic song…

“The roof, the roof the roof is on fire”

Almost everyone of my friends owns AT LEAST ONE investment property in Ontario!

#34 Brian on 05.04.22 at 4:31 pm

May 4/2022
General Secretary Antonio Guterres signed an agreement to accelerate Agenda 2030.

https://twitter.com/i/status/1521863898244464640

#35 Søren Angst on 05.04.22 at 4:35 pm

#24 jimmy zhao

THAT was good. Too funny. Wry, I like that.

————–

#19 Old Boot

Try this and get back to me, in Italiano, if you can cook just watch, learn and you do not need ingredient measures (IF, you can cook):

Melanzane al forno pomodoro e mozzarella
https://www.youtube.com/watch?v=youRtbVJhT0&t=2s

Melanzane ripiene con carne (al forno)
https://www.youtube.com/watch?v=vm3Im-5gW9g

Cooked them many times, both ways. Very good Primo Piato.

—————-

As usual, when it comes to food, cuisine:

Canadesi and Americani know NOTHING.

#36 Tom from Mississauga on 05.04.22 at 4:36 pm

Here’s a leading indicator: my next door neighbour are father & son tile guys. Oshawa, Innisfil, Niagara, these guys will travel for a gig. Been working 6 days a week, no vacation, since I moved there. They’ve been home all this week, nothing happening.

#37 Miss Information on 05.04.22 at 4:38 pm

Magnifico Giganticus
Fun Fact.

Realtor.ca is owned by Rupert Murdoch. The most dangerous and evil man alive today
————————————————————————-
REALTOR.ca is owned by CREA
Realtor.com on the USA is Murdoch’s

#38 Penny Henny on 05.04.22 at 4:43 pm

There’s this- “Mr. Market is pricing in additional half-point surges in June and again in July. By the end of the year the CB rate there will be (likely) 3.25%”-GT

And then there is this- “Powell has said he wants to quickly raise the Fed’s rate to a level that neither stimulates nor restrains economic growth. Fed officials have suggested that they will reach that point, which the Fed says is about 2.4%, by year’s end.”

3.25 or 2.4. I guess we will have to wait and see.

https://www.theglobeandmail.com/business/international-business/us-business/article-us-federal-reserve-expected-to-step-up-inflation-fight-with-big/

#39 Kurt on 05.04.22 at 4:48 pm

#30 DON on 05.04.22 at 4:14 pm

What happens if they don’t tame inflation and let it go unchecked….?

Economic collapse. This is why central banks are supposed to be independent of governments – governments (i.e. voters) don’t have the courage to do what must be done.

If a supply shock is handled firmly, there is a chunk of inflation and unemployment, and then things return to normal as the economy adjusts to the new cost of inputs. If it is not, the business environment goes sour because investors face additional risks due to inflation – why lend money when you have no idea what it will be worth when you get it back? The money goes to better managed economies, and doesn’t come back (hello Argentina, Brazil, Venezuela, blah, blah, blah.)

#40 Bankrupting Landlords is good for the Economy on 05.04.22 at 4:54 pm

#13 Dave

You’re addicted to doom p*rn aren’t you? If you’re right, wouldn’t emigrating to low cost country be the best investment instead of buying property here?

#41 Reality Check on 05.04.22 at 5:01 pm

What happens if they don’t tame inflation and let it go unchecked….?
————-
The public get p**sed at the government. Then when politicians decide inflation is a real problem.

I recall back in the 1970s prices went up monthly. Stores would actually reprice goods on the shelf – remember price stickers. Priced went up monthly but wages went up annually or biannually. So working class wagers were always playing catch-up to inflation.

Inflation is not a big deal to government until it makes voters upset. Then you get idiotic government measures like the wage/price control measures that Pierre Trudeau implemented.

#42 I don't know on 05.04.22 at 5:03 pm

#30 DON on 05.04.22 at 4:14 pm

Interest rates are a large factor in taming inflation, but not the only one.

We still have massive supply chain issues. When they get resolved, inflation will fall as products become more plentiful again.

Oil is still elevated due to increased demand from the shut downs during covid, and now the Ukraine conflict. When people start spending more at pumps and then the supermarkete, they have less money to spend on other things. Inflation goes down.

After two years of lockdowns, and an economy that was surprisingly resilient with almost everyone working, making money, and having less places to spend it, people currently have high savings levels. Since we are reopening now, those savings will eventually deplete, and people will start spending less. Inflation down.

Yellen was correct when she stated a soft landing is possible/probable. Rates will rise gradually as expected and the economy will cool somewhat (but remain warm).

Stocks = some volatility, but the bottom may have just passed. If not, it will eventually.

Bonds = hold only short duration. Volatility ahead.

Real Estate = we are entering or probably are in a buying opportunity right now. As our host mentioned yesterday, real estate reacts much slower than stocks. The buying opportunity may last 6-8 months, but then it’s up again (albeit at a slower rate than in 2020/2021).

IDK

#43 Søren Angst on 05.04.22 at 5:05 pm

Garth, absolutely GIDDY today at Mr. Market.

Maple ETF ended up +4.18% today and that’s not counting the +17% Monthly dividend yield it throws off.

Oil ETF/ETNs almost as strong, +2.4%/2.9% today and without the 8%/+20% Qtrly/Monthly dividend yield they throw off.

Even my US Invest. Corp (diversified, many segments) +3.25% for day. They throw off Monthly dividends that make my Oil ETN look like cheap money. HIGH RISK experiment by me. Well over +40% dividend yield.

———————-

#28 Sail Away

Recalculation of TWTR for you:

Bought at about $44.50
Close today $49.06

= about 10% or a 4% wing clipping. Still OK.

As for me, NEVER BUYING SINGLE STOCKS FOR AS LONG AS I LIVE. Abstained for a couple of years. Mea Culpa.

Holding only because I have to. I hate losing and calculating Capital Losses on tax forms.

#44 Eyeguy on 05.04.22 at 5:13 pm

A residential real estate purchase is highly leveraged. As qualifying interest rates rise, house prices drop. Stock purchases can be leveraged but to a lesser degree. Garth, using the same logic of increased carrying costs, is it also reasonable to expect some stock market pullback in the upcoming year or do you expect current positive stock market factors to at least offset this negative influence?

The vast majority of financial asset investors use no leverage. The vast majority of house purchasers do. Apples, oranges. No equity pullback because of carrying charges (which are 100% tax-deductible). – Garth

#45 Steve French on 05.04.22 at 5:14 pm

Oh sunny day!

The property correction/recession is finally here!

#46 Søren Angst on 05.04.22 at 5:23 pm

Did I forget to mention that was a GREAT write-up today Garth. I liked the ending:

This is it.

I agree. The beginning of the end has just started for Cdn RE speculators.

yeah Kids. yeah Mr. Market.

——————

BTW, I heard you snickering while reading my prior Comment Single Stock epitaph. Got greedy (down -$1/share as of today). Paying the Piper (for now).

I still love Elon. We’ll see how it goes.

#47 DON on 05.04.22 at 5:29 pm

#42 I don’t know on 05.04.22 at 5:03 pm
#30 DON on 05.04.22 at 4:14 pm

Interest rates are a large factor in taming inflation, but not the only one.

We still have massive supply chain issues. When they get resolved, inflation will fall as products become more plentiful again.

Oil is still elevated due to increased demand from the shut downs during covid, and now the Ukraine conflict. When people start spending more at pumps and then the supermarkete, they have less money to spend on other things. Inflation goes down.

After two years of lockdowns, and an economy that was surprisingly resilient with almost everyone working, making money, and having less places to spend it, people currently have high savings levels. Since we are reopening now, those savings will eventually deplete, and people will start spending less. Inflation down.

Yellen was correct when she stated a soft landing is possible/probable. Rates will rise gradually as expected and the economy will cool somewhat (but remain warm).

Stocks = some volatility, but the bottom may have just passed. If not, it will eventually.

Bonds = hold only short duration. Volatility ahead.

Real Estate = we are entering or probably are in a buying opportunity right now. As our host mentioned yesterday, real estate reacts much slower than stocks. The buying opportunity may last 6-8 months, but then it’s up again (albeit at a slower rate than in 2020/2021).

IDK

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

You seem to misrepresent what Garth is saying and and spin to match confirmation bias. What else causes inflation?

#48 Philco on 05.04.22 at 5:31 pm

Can’t stand him.
Ok Garth suit up and take the HELM!

#49 DON on 05.04.22 at 5:32 pm

#23 Overheardyou on 05.04.22 at 4:01 pm
If there is no jingle mail, what happens if someone can’t afford their renewed mortgage payments? Does the bank just tack on interest charges and extend the loan?

********
The bank will call that someone up and offer to forgive the mortgage or make the payments for that someone. The banks will offer a get out of jail free card. Your bank has your back and they will understand…

#50 Omicron anagram on 05.04.22 at 5:36 pm

Oil is still elevated due to increased demand from the shut downs during covid, and now the Ukraine conflict. When people start spending more at pumps and then the supermarkete, they have less money to spend on other things. Inflation goes down.

////////////////////////

Omg, this is the STUPIDEST THING I HEARD FOR A LONG TIME

THE OPPOSITE IS TRUE

#51 Sail Away on 05.04.22 at 5:40 pm

#43 Søren Angst on 05.04.22 at 5:05 pm

#28 Sail Away

Recalculation of TWTR for you:

Bought at about $44.50
Close today $49.06

= about 10% or a 4% wing clipping. Still OK.

As for me, NEVER BUYING SINGLE STOCKS FOR AS LONG AS I LIVE. Abstained for a couple of years. Mea Culpa.

Holding only because I have to. I hate losing and calculating Capital Losses on tax forms.

———

Thanks. So… we’re still winning? Never bet against Elon.

#52 DON on 05.04.22 at 5:40 pm

#42 I don’t know on 05.04.22 at 5:03 pm
#30 DON on 05.04.22 at 4:14 pm

Interest rates are a large factor in taming inflation, but not the only one.

We still have massive supply chain issues. When they get resolved, inflation will fall as products become more plentiful again.

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

I see you latched on to what Transitory Yellen said today. She is in a POLITICAL role snd the Dems have the mid term elections on the horizon. When was the last soft landing in history when experiencing high inflation?

Do real estate junkies do their own research or just parrot whatever article fits their thinking?

Go back and read your previous posts. What exactly is your past experience with high inflation?

Put the horse blinders back on. It will be better that way.

#53 Philco on 05.04.22 at 5:43 pm

Margin Debt says no wipe out. Good news chart
Typically MD is sky high at tops as Joe blows loading up then its game over.
https://www.currentmarketvaluation.com/models/margin-debt.php
I was convinced to add some stuff and chill.

#54 Brian on 05.04.22 at 5:48 pm

Ah, 1972 Sunny Days!

https://www.youtube.com/watch?v=6R33rJK5BNo

#55 Reality is stark on 05.04.22 at 5:54 pm

People often ask me why I believe the average New Yorker is more intelligent than the average Torontonian.
The answer is quite simple.
Torontonians are less financially literate.
A New Yorker doesn’t mind renting and has a portfolio which is generally more prolific than a Torontonian.
He understands that portfolio diversification does not mean having all your money in housing.
People from Toronto are drunk on housing and many of the highly leveraged ones are about to find out that they are the definition of stupid.

#56 DON on 05.04.22 at 5:54 pm

Hey Soren…what about this?

“But on April 4, the Treasury Department banned Russia from withdrawing funds held in US banks to pay off its debt obligations. On 4 April 2022 Russia technically defaulted on its foreign debt by failing to pay its obligations in US dollars.”

#57 NOSTRADAMUS on 05.04.22 at 5:58 pm

I WANT TO BE A ROCK STAR REALTOR.
Until then, “I hope we are friends until we die, and then I hope we stay ghost friends and walk through walls and scare the SH*t out of people.” New point. For all the struggling realtors out there, especially the newer agents, I realize it is tough sledding going up against the rock star realtors. But, did you ever wonder how they got to the top of the greasy pole? Yes, having sharp claws, and being morally and ethically challenged doesn’t hurt. But the real secret to their success , the secret they will never, ever, whisper, not even to to their priest on a Sunday morning confessional is, hold on, before I divulge this million dollar secret, let me ask you, are you “REALLY, REALLY, ready to move to the next level on the greasy pole??? Do I hear a lot of yes sir two bags full sir. ???” Okay all you wanna be rock star realtors, bend your ear. Here is how it works, the name of the game is listings, forget about the buyers, let the realtor drones in your office, burn themselves out running these ungrateful characters around. What you want are listings, the more listings the better. Your mission is to become a listing machine, just like the rock stars. Now, how do you get these listings when you are competing against a living legend? Simple, Simon says,, ALL YOU HAVE TO DO IS GIVE THE POTENTIAL SELLER THE HIGHEST ESTIMATE OF VALUE, WITH THE LOWEST COMMISSION RATE! Remember the seller’s are in most cases greedy. You are setting the hook. But, what if the property doesn’t sell within the listing contractual time frame you ask? That’s the greedy seller’s problem, not yours. Every 30 days you get on the phone and hammer the seller for a price reduction . In the mean time your sign is on the front lawn, a 24 hour silent salesman with your smiling face for all the world to see.. Call’s will come in, refer the purchasers to the drones in your office, take your 25% referral and move on, remember you are now a listing machine. You do not have the time for purchasers. Now you know the secret. Hold on, someone at the door.

#58 Victor V on 05.04.22 at 5:59 pm

“Legal precedent in 2018: buyers of Mattamy in Oakville pre-con w/20% for 1.6M – valued 1.3M @ completion. Buyers cant close.

Decision: Buyers pay 0.3M in damages and loses deposit. That’s 500K in total loss + cost of legal battle.”

https://twitter.com/ethelstan/status/1521844624041644033

#59 Editrix on 05.04.22 at 6:05 pm

I dunno, Garth. If the kids who are underwater with their houses have to tighten their belts and also the real estate agents who aren’t selling anything can’t afford to buy stuff, then purchasing will decrease. If people aren’t buying stuff, then the stuff makers lay off employees. The people laid off can’t afford to buy and may have to sell their houses, if anyone is buying.

I think this will be like the early 90s. A few years of big unemployment, but it will work its way back to what is considered normal in a couple of years. Two or three years from now will be awful. Five years, hopefully better.

When interest rates hit 7% for a GIC, I’m buying.

Most people who own houses have no mortgage. Six in ten with mortgages have them locked in for a number of years. Your argument fails. – Garth

#60 Linda on 05.04.22 at 6:10 pm

Well, the market seemed to like Powell signaling rate increases won’t be more than .50 at a time. I don’t know if further increases in the same amount will be treated as business as usual. Next up: the April CPI for the USA on May 11th, followed by the BoC CPI for Canada on May 18th. I expect the powers that be already know or have a very good idea of what the numbers will be.

What the market thought today was that the Fed can engineer a soft landing. – Garth

#61 PeterfromCalgary on 05.04.22 at 6:14 pm

With gas near 2 dollars per liter I expect places where you have to drive far to get to work will see the biggest price declines. I think Garth refers to them as the bunny patch.

#62 Quintilian on 05.04.22 at 6:22 pm

#2 Fran on 05.04.22 at 3:17 pm
“Garth. What should I do. I want to buy a condo in downtown Toronto. Do you think prices will drop a little or maybe a lot. What do u suggest.”

Hey Fran, I don’t think Garth is qualified to answer your question.

You need to consult a Realtor.
They are duly qualified, and have undergone extensive training.

And only after having performed a series of highly complex tests, will they be granted a license to perform RE transactions.

Purchasing property is serious business, don’t attempt it on your own, or on the advice of anyone but a qualified professional.

#63 Nelson from the Simpsons on 05.04.22 at 6:26 pm

Hahahahaha!

Good for them!

#64 Bill on 05.04.22 at 6:33 pm

DELETED & BANNED (Anti-vaccine)

#65 Larry Fink on 05.04.22 at 6:34 pm

re: #1 Magnifico Giganticus

you sure?

#66 Quantum on 05.04.22 at 6:34 pm

I’m calling a top in bond yields, down from here.

And fewer rate hikes than expected.

Deflationary pressures will be back.. Same as it ever wss

#67 crowdedelevatorfartz on 05.04.22 at 6:42 pm

@#61 Cowtown Pete
” I expect places where you have to drive far to get to work….”
+++

You just described Calgary.

#68 VladTor on 05.04.22 at 6:45 pm

#2 Fran on 05.04.22 at 3:17 pm
Garth. What should I do. I want to buy a condo in downtown Toronto. Do you think prices will drop a little or maybe a lot. What do u suggest.

***********

Answer from Mr. Garth ghost:

If you have emergency case (eviction from landlord), you have extra cash (and you not counting each penny between 2 salaries) and you have wife (she made hole in your brain about owning condo) and you going to buy without mortgage… you can buy.

In any other cases – relax an forgot until 2026.

#69 The Original Jake on 05.04.22 at 6:46 pm

I believe rates won’t get jacked up high enough before the next crises hits and the FED needs to drop their pants again. Rates went down far too low and for too long. Some will take on water but with patience they will get back into the black.

#70 Soviet Capitalist on 05.04.22 at 6:52 pm

I am seeing sales picking up in my neighbourhood in the last few days, but prices appear down ~80k from February.

#71 Ponzius Pilatus on 05.04.22 at 6:52 pm

#163 crowdedelevatorfartz on 05.04.22 at 1:56 pm
Regular gas in The Lower Brain Land this morning
$2.11.9

War with Russia?
Uppa uppa uppa.
———
Late, as usual.
Diesel at 241.9 today.
Poor truckers.
And poor IHTCD1/2.

#72 pPrasseur on 05.04.22 at 6:53 pm

This inflation story still has a lot more to give, money is still cheap and easy, stimulus money is still everywhere. Consumers a long way from pulling back significantly. In fact home prices would have to decline very sharply to prevent people from using their house as an ATM…

Plus inflationary pressures are everywhere, population ageing (millions retiring) for one makes manpower scarce while social costs are exploding and this is just the beginning of that story.

Yet don’t count on China for inflation relief this time, their own economy is in deep (very deep) trouble and population decline well under way, their population is ageing faster than anything in world history!

I believe that contrary to 2008 the US will be one of the least affected place this time, although it will be affected, the RE market is already tanking while the Banks and tech sectors are laying off and no doubt will layoff massively, Canada however will see much worse eventually, that’s what you get when you avoid recessions by kicking the can down the road, our only hope would be productivity gain, good luck with that!.

#73 Ponzius Pilatus on 05.04.22 at 7:03 pm

#15 Dolce
Viva L’Unione Europea. Slava Ukraini.
PS:
Italia (Draghi) ** wants to accelerate EU expansion + Ukraine.
https://www.rainews.it/articoli/2022/05/draghi-a-strasburgo-9d421b67-2084-41c4-93ff-7000dd2daf62.html

** THE Architect of freezing Russian Gov Assets Worldwide “Whatever it takes” Mario.
————-
Of course, as usual the Italians are big spenders .
But when the bill is presented, the Germans will have to come to the rescue, again.

#74 Ponzius Pilatus on 05.04.22 at 7:10 pm

The Maripol steel plant is the largest of it’s kind on the planet.
Not sure why the Russians allegedly are trying to destroy it.
Does not make sense.
But nothing does in this “weird” war.

#75 crowdedelevatorfartz on 05.04.22 at 7:12 pm

I’m thinking there’s more than a few Real Estate developers out there in Canuckda……with huge mortgages on Condo projects……crapping their pantaloons.

https://www.burnabynow.com/real-estate-news/photos-opulent-burnaby-house-sits-on-market-for-74-days-before-price-craters-by-400k-5332004

I can’t wait to see the interest rate increases as the Real Estate meltdown gathers speed over the Summer and into the Fall….(ha ha “fall” get it?).

One wonders how many realtors have “spec” properties in their name……

#76 Grunt on 05.04.22 at 7:20 pm

Thanks Garth for the free advice. I held firm thru 2008 and bounced back. Remained a renter. Which I should at my income & skill level. Looks like we’re all gonna get a little poorer in the near term. With investors bouncing back before RE.

#77 Victor V on 05.04.22 at 7:24 pm

“Buyer’s remorse is real. Even if they can afford the payments, knowing they could have had a better house for 100s of thousands $ less hurts.”

https://twitter.com/nasmadotali/status/1521989956796928001

#78 Brian on 05.04.22 at 7:25 pm

WEF Press Release May 4/2022

World Economic Forum and UN Sign Strategic Partnership Framework

https://www.weforum.org/press/2019/06/world-economic-forum-and-un-sign-strategic-partnership-framework/

#79 Ponzius Pilatus on 05.04.22 at 7:33 pm

Hey Sailo,
You have been a decorated Marine.
So I have a question for you.
Just watched CNN (I know I shouldn’t).
They interviewed a “Deputy Battalion Commander” of the Ukrainian Army.
Any idea what kind of rank would that be in a regular army?

#80 crowdedelevatorfartz on 05.04.22 at 7:48 pm

@#74 Ponzie pals with Putin’s propagandists?
“Not sure why the Russians allegedly are trying to destroy it.”

+++
Allegedly?
Seems to me that just about everyone ( including the Russians) have reported the daily bombings, missiles and attacks on the Steelworks…
Or is that all just internet propaganda?

#81 crowdedelevatorfartz on 05.04.22 at 7:51 pm

@#64 Unwanted Bills
Deleted and Banned

+++

You are the greaterfool.
:0

#82 jess on 05.04.22 at 8:59 pm

Powell still awaits full Senate confirmation for a second term as Fed Chair, thus the designation “Pro Tempore.
=================

…” the Fed has to be mindful $200 trillion
of derivatives
https://wallstreetonparade.com/2022/05/what-you-can-expect-to-hear-at-the-feds-press-conference-today/

#83 Wait There on 05.04.22 at 9:03 pm

The term “Hoovered” should probably now be “Dysoned”
Not sure those who will remember/know what a Hoover is, might be more familiar with the Dyson vacuum cleaner.

Also what is the probability that CMHC and thus taxpayers will have to ante up to the banksters? THAT is the question.

#84 Sail Away on 05.04.22 at 9:13 pm

#79 Ponzius Pilatus on 05.04.22 at 7:33 pm

They interviewed a “Deputy Battalion Commander” of the Ukrainian Army.

Any idea what kind of rank would that be in a regular army?

———

Battalion Commanders are lieutenant colonels in the US Army. I’d guess deputy would be major or slightly less motivated light bird.

#85 jess on 05.04.22 at 9:16 pm

El Pais, a leading newspaper in Spain, reported that “European stock markets as a whole lost over €300 billion as a result of the so-called Nordic flash crash.”

Citigroup has confirmed its role in yesterday’s flash crash, releasing the following statement on Monday:

“This morning one of our traders made an error when inputting a transaction. Within minutes, we identified the error and corrected it.”

https://violationtracker.goodjobsfirst.org/prog.php?parent=citigroup
=========
Citigroup was fined $26 million in 2005 by Europe’s Financial Services Authority for the Dr. Evil trades.

Citigroup staffers created another code name, “Buca Nero” – Italian for “Black Hole” – for an accounting maneuver

2005, Citigroup settled with private litigants for $2 billion over its role in the bankruptcy of Enron.

#86 HappyHarry on 05.04.22 at 9:16 pm

Some of us remember the days before granite countertops when a key selling point on a house was a transferable mortgage @10% when the going rate at the banks was 16%. FOMO was the virus of the day. And then the big plop in Hogtown as prices dropped by a third and stayed there for a good long time.

#87 Doctorate on 05.04.22 at 9:19 pm

Speaking of Nelson Muntz from the Simpson’s that shack he was living in would probably sell for a few million earlier this year.
The insanity of the housing market.
Those who own everything are happy, expecting the serfs to own nothing and be happy.
Will a tone deaf politician tell the starving populace to eat cake this time?

Oh wait Lisa Macleod told amputees that the best social assistance is a job.

But a real estate portfolio of the deputy governor of the BoC made over 500 grand in a year.

#88 Shawn on 05.04.22 at 9:30 pm

Weirdest News story of the day, by far…

Russia might now declare war on Ukraine.

#89 crowdedelevatorfartz on 05.04.22 at 9:30 pm

@#79 Ponzie’s Paramilitary Presumptions
“Any idea what kind of rank would that be in a regular army?”

+++
He’d be a General in the Russian army.

#90 Bill on 05.04.22 at 9:33 pm

BANNED

#91 Slow Canada on 05.04.22 at 9:54 pm

Garth, thanks so much for your sound advice over the years, which has helped keep me sane. It looks like we may have finally reached a turning point, at long last. This situation has been building for many years, however, and I assume that it will take a long time to unwind. Those of us who took your advice can sleep well throughout. You can’t ask for much more than that.

#92 VicPaul on 05.04.22 at 10:04 pm

#1 Magnifico Giganticus on 05.04.22 at 3:14 pm
Fun Fact.

Realtor.ca is owned by Rupert Murdoch. The most dangerous and evil man alive today.

*********

I see your Rupert Murdoch and raise you a George Soros…toxic evil.

M58BC

#93 TurnerNation on 05.04.22 at 10:07 pm

Lil’ background in Italy. Oft a topic on this weblog.

https://michaelpsenger.substack.com/p/how-covid-lockdowns-came-to-italy?s=r

On March 23, 2019, the same day Conte signed Xi’s Belt and Road Initiative, Italy’s Health Minister, M5S member Giulia Grillo, signed a Plan of Action on Health Cooperation between Italy and China, binding Italy to cooperation with China in certain fields including “prevention of infectious diseases.”
….
On November 8, 2019, Health Minister Speranza signed an Implementation Programme of the Plan of Action on Health Cooperation between Italy and China, binding Italy to specific actions in the area of infectious disease control. As is now widely-acknowledged by intelligence sources, the CCP was aware that Covid was spreading by November 8, 2019, but had not yet shared that information with the rest of the world. Among Italy’s commitments to China in the Implementation Programme were the following:

#94 Satori on 05.04.22 at 10:07 pm

I just can’t see housing going down 30%. At least not in West Kelowna. A house here just sold in days, 2 offers, 1.8 mill, zero view.

People who live here are not leveraged to the hilt. The cheap, crappy, old 1 bedrooms, where 3 people pile in it – those will go down but Good quality homes, Good neighborhoods, safe, quiet, peaceful homes… They might go down 10-15% but 30%? Nah.

How come no one in the comments section consider that maybe, these people are living within their means?

Lets use basic math:

Rent here is easy $2800 for a decent basement, maybe under toddlers or in a rental building with no a/c and thin walls.

For your $33,600.00 a year. You might get evicted… so you decide to buy. Then you hit a bidding war and you end up paying $40,000 more. Who cares, that is a bit over year of you renting a place. If your purchased home goes down in value, well $33,600 rent money is a yearly loss as well.

Everyone has to live somewhere.

I agree those highly mortgaged will sink, but come on, not everyone in these homes is living ‘La Vida Loca’ (the crazy life)

If your portfolio is making 7-12% — you get a mortgage at 1-2% and leave your investments invested. Why not??

TONS of mortgages are happening like this. Not everyone who has a mortgage is in the hole… do you know what I mean? So why assume that people with a mortgage have no money???

Any Thoughts?

#95 fishman on 05.04.22 at 10:53 pm

Last fall I put my little Caterpurrer to bed with full fuel tanks & a few additives to prevent condensation over the winter. Thats 5000 litres @ $1.10/litre. oil change @ $75/5 gallon pail. Today down at Steveston its $2.20/litre & $150 for pail of oil. Thats a perfect double in 7 months. Anybody else miss the Trumpster yet?

#96 Morrey on 05.04.22 at 11:02 pm

So i have a front row seat to the Real Estate drama. In Dec. 2021 the house next to my Sister’s place went on the Market and in Jan. 2020 sold for $2.2MILL. On Monday a house across the street, same sized lot, went on the market for $2.4MILL! So how can they be asking for such a high price?! Will be watching with interest to see if that house drops it’s asking price by 200-300K ?

#97 Sail Away on 05.04.22 at 11:24 pm

#92 VicPaul on 05.04.22 at 10:04 pm
#1 Magnifico Giganticus on 05.04.22 at 3:14 pm
Fun Fact.

Realtor.ca is owned by Rupert Murdoch. The most dangerous and evil man alive today.

———

I see your Rupert Murdoch and raise you a George Soros…toxic evil.

M58BC

———-

My vote goes to Raffi. Once those songs are in your head, they are there forever. Dastardly!

#98 BobinKits on 05.04.22 at 11:36 pm

Satori..
I just can’t see housing going down 30%. At least not in West Kelowna. A house here just sold in days, 2 offers, 1.8 mill, zero view.
*********************
Sorry, but I do believe you are going to be in for a shock if you think that Kelowna and of all places… West Kelowna will be immune to a correction. Think you may suffer from recency bias? Let us know what that 1.8 mill joint could sell for in 6 to 8 months time.

#99 salonist on 05.05.22 at 12:16 am

had a taste for some spicy clamato
love it straight up no booze
cats also put in a dib for some cat food
went to walmart as that’s the only place i know that has it, the spicy
parking was a breeze,walk in almost empty
go to the self checkout,that’s empty i look and no bags
and not allowed to bring your own carry out bags
walmart did a big oops
driving back along dundas west, turn left and there are signs for 200 open house showing and i’m driving south to my street and there many more open house showings
not one sold sign
oh, walmart allowed you to bring your own carry out bag, i noticed on the circular

#100 Dr V on 05.05.22 at 1:56 am

79 Ponz

Primer for you

https://www.britannica.com/topic/military-unit

#101 Magnifico Giganticus on 05.05.22 at 2:17 am

My mistake. The Realtor.com mobile app is developed in Vancouver. That’s the newscorp exploit.

#102 robert james on 05.05.22 at 3:01 am

Satori on 05.04.22 at 10:07 pm You must not have lived in the Okanagan in the early 1980 s when there were real jobs here paying decent wages..

#103 Tony on 05.05.22 at 3:04 am

Re: #2 Fran on 05.04.22 at 3:17 pm

The low end of the market should fall the hardest since it went up the most and all the leverage from people who own multiple properties are at that end of the market. It’s not rocket science as most leveraged to the hilt are leveraged at the low end of the real estate market.

#104 Tony on 05.05.22 at 3:15 am

Re: #66 Quantum on 05.04.22 at 6:34 pm

It’s just a head fake leading into the midterm elections in America. Inflation will reaccelerate in 2023

#105 jess on 05.05.22 at 7:49 am

independent watchdog says more than 95 % of Airbnbs in Montreal aren’t licensed

“Platforms need to be held responsible for enforcing these rules themselves,”
https://www.cbc.ca/news/canada/montreal/quebec-airbnb-crackdown-not-working-1.6439867

#106 crowdedelevatorfartz on 05.05.22 at 8:29 am

@# 98 BobinKits
“Let us know what that 1.8 mill joint could sell for in 6 to 8 months time.”
+++
yep.
I rented a house in the early 80’s
Landlord paid 240k for it in 1980
It was listed in 1983 for 80k

6, 12, 18 months from now will be fugly.
Hopefully Trudeau’s Brainiacs will be all out of new ideas ( taxpayer helicopter money) …just before another election.
:)

#107 crowdedelevatorfartz on 05.05.22 at 8:34 am

Gee.
A full 1% interest rate hike…

https://www.reuters.com/business/bank-england-hikes-rates-clamour-contain-spiralling-inflation-2022-02-03/

That makes a 0.75% Canuck bank of Canada rate hike Jun 1st a bit more palatable….don’t you think?
:0

#108 YVR Renter on 05.05.22 at 8:47 am

#94 Satori,
We moved to Kelowna in 1993. Bought a West Kelowna house with a pool and lots of Ponderosa Pines, typical 70’s/early 80’s modern wood style, magnificent view of the lake, breathtaking. Needed a lot of updating. $222,000. We had a saying then, “Kelowna sh*t brown shag carpet”.

We did a ton of the reno’s ourselves, new kitchen, etc. Threw in about $75,000 – cheap by today’s standards. Had to move to US for hubby’s work transfer, gave the place away for $235,000 in 1997. Houses do and will go down in West Kelowna. Houses there stayed down until the mid-2000’s when the oil money from Alberta pumped in. Had minor wildfires 2 out of 4 yrs, nothing like today’s neighbourhood/town burning infernos. Maybe all the wildfire smoke has gotten to you.

On a different note, here in CTown, ON, a house in our clapboard builder crap hood listed for $1.299mill took a couple months to sell, had a red sold sign on it 2 days ago, is back on the market. Buyers must have decided they paid too much and back out, could get more than laminate countertops & backing onto a busy road for their money. Silly thing is, they’ve relisted at a February price, duh!

#109 TurnerNation on 05.05.22 at 9:05 am

Was this whole trucker protest thing a set-up for even more control? Wow is there anything the ‘terrorists’ cannot do to take away our rights? After Sept 11 we got unlimited detention clauses, black facilities, secretive no-fly lists, permanent “security taxes” added to airline tickets, and more. Gee who is winning again?

.Crowdfunding platforms now required to report transactions, after truck convoy protests. Government says crowdfunding platforms are an emerging risk for terrorist financing (cbc.ca)

— Control over Travel/movement. Hmm how will this affect my Social Credit Score?

.The Public Health Agency of Canada used data from cell towers to track 33 million mobile devices as a way to assess “population mobility patterns” during pandemic lockdowns and issued a tender in December to continue tracking location data until May 31, 2023. (globalnews.ca)

.The Centers for Disease Control and Prevention used location data from tens of millions of Americans’ phones to track compliance with lockdown orders and vaccination efforts…The CDC specifically monitored Americans’ visits to churches and schools, as well as “detailed counts of visits to participating pharmacies for vaccine monitoring,” internal documents from the federal agency obtained by Vice show.
The CDC also reportedly tracked peoples’ movement during curfews and visits between neighbors. (nypost.com)

#110 T on 05.05.22 at 9:12 am

#94 Satori on 05.04.22 at 10:07 pm
I just can’t see housing going down 30%. At least not in West Kelowna. A house here just sold in days, 2 offers, 1.8 mill, zero view.

People who live here are not leveraged to the hilt. The cheap, crappy, old 1 bedrooms, where 3 people pile in it – those will go down but Good quality homes, Good neighborhoods, safe, quiet, peaceful homes… They might go down 10-15% but 30%? Nah.

How come no one in the comments section consider that maybe, these people are living within their means?

Lets use basic math:

Rent here is easy $2800 for a decent basement, maybe under toddlers or in a rental building with no a/c and thin walls.

For your $33,600.00 a year. You might get evicted… so you decide to buy. Then you hit a bidding war and you end up paying $40,000 more. Who cares, that is a bit over year of you renting a place. If your purchased home goes down in value, well $33,600 rent money is a yearly loss as well.

Everyone has to live somewhere.

I agree those highly mortgaged will sink, but come on, not everyone in these homes is living ‘La Vida Loca’ (the crazy life)

If your portfolio is making 7-12% — you get a mortgage at 1-2% and leave your investments invested. Why not??

TONS of mortgages are happening like this. Not everyone who has a mortgage is in the hole… do you know what I mean? So why assume that people with a mortgage have no money???

Any Thoughts?

————

Yes, learn the correct inputs and math.

#111 Trudeau Translator Request on 05.05.22 at 9:14 am

“What is the nature of your thoughts, gentlemen, when you say you move your lips in a particular way,” Justin Trudeau

Could someone translate this sentence said by our PM recently please?

#112 Squire on 05.05.22 at 9:30 am

#1 Magnifico Giganticus on 05.04.22 at 3:14 pm
Fun Fact.

Realtor.ca is owned by Rupert Murdoch. The most dangerous and evil man alive today.

——————————————
Actually, Realtor.com is owned by News Corp. which is owned by Rupert Murdoch. Realtor.ca is owned and operated by CREA.

Do you not realize that if something is said convincingly on social media it becomes true in three days? – Garth

#113 crowdedelevatorfartz on 05.05.22 at 9:34 am

So Trudeau has announce he will confer with the Gender Equality Minister to “Create a pro choice Law that future govts will not be able to rescind”

https://www.thestar.com/politics/federal/2022/05/04/justin-trudeau-promises-more-protection-for-abortion-rights-in-canada.html

It’s a shame successive govts cant seem to do that for a annual balanced budget.

It should be LAW.

Why are successive govts allowed to squander BILLIONs of OUR TAX DOLLARS year in and year out ?

A balanced budget should be LAW.

#114 Quintilian on 05.05.22 at 10:21 am

“Do you not realize that if something is said convincingly on social media it becomes true in three days? – Garth”

Are you suggesting that through social media ludicrous ideas such as these are propagated?

“A balanced budget should be LAW.” #113 crowdedelevatorfartz

#115 Ponzius Pilatus on 05.05.22 at 10:40 am

#100 Dr V on 05.05.22 at 1:56 am
79 Ponz

Primer for you

https://www.britannica.com/topic/military-unit
———————
I could have looked that up myself.
But the Ukraine “Army” looks more like Tito’s Partisans in WWII.

#116 millmech on 05.05.22 at 10:55 am

#94
To think you can just drive up the highway to Vernon and spend 600k and get a duplex, houses are being relisted after no offers with 10%-15% price drops.

#117 Sonny Kang on 05.05.22 at 11:23 am

#111 Trudeau Translator Request on 05.05.22 at 9:14 am
“What is the nature of your thoughts, gentlemen, when you say you move your lips in a particular way,” Justin Trudeau

Could someone translate this sentence said by our PM recently please?

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

He’s quoting his old man. Jester Trudeau can’t think for himself.

https://globalnews.ca/news/8810414/justin-trudeau-f-bomb-parliament-conservatives-fuddle-duddle/

#118 crowdedelevatorfartz on 05.05.22 at 11:24 am

Putin’s folly?

https://youtu.be/dxJHecyYBno

#119 Downward Slope on 05.05.22 at 11:27 am

Hey Tractor Boy.
While I was out cutting the grass I thought I would amuse myself by thinking up some new handles for you.

How about
-“At the risk of repeating myself”
-“Stop me if you heard this one”
-“Did I tell you about the time…”

Have at er.
Your welcome.

#120 Mattl on 05.05.22 at 11:29 am

Still don’t see a scenario where 3T in RE equity disappears and the financial markets just keep chugging along. In that scenario consumer spending would grind to an absolute halt.

Maybe the economy is decoupled from consumers and their spending – guess we are about to find out.

#121 Lisa on 05.05.22 at 11:34 am

Of course this RE downturn to trend coincidentally coincides with troubles in China.

#122 Tinpot⁷ Economist on 05.05.22 at 11:41 am

It’s feeling like 1994, bond market massacre.

#123 Satori on 05.05.22 at 11:48 am

As said in my post, maybe they will go down but not as much as half.

I do think rent prices are correlated to home prices. I have never seen rent prices go down…and currently, watch the daily news, it is exorbitant to rent anything!

So yup, a house will go down, and up, but it means very little, until you sell. Just like a stock portfolio. You buy in a High market, you generally don’t sell in a Low market.

People think million dollar homes will be selling in six months for 1/2 price and there will be tons of people accepting low ball deals. Unlike stocks homes are emotional, the entire country is conditioned that owning is the ‘Canadian dream” so, Can’t see it.

If mills bought in a high market, they will keep working, mom and pops will help them thru the storm, just like they always do. A few will get crushed and be forced to sell, but that fantasy that ‘everything’ will be half off, is just that, a fantasy.

#108 YVR Renter on 05.05.22 at 8:47 am
You had to move for your hubby’s job. That says it all. I think you would have chosen to sell in a higher market, if you had a choice… but you had no choice. That happens, but not to everyone.

#124 Outrage on 05.05.22 at 11:56 am

My predictions,
Well I hope everyone got to sell yesterday. The bloodbath continues. A one big day dead cat bounce. A nice juicy recession is coming and I bet we’ll surpass 2009 lows.
There won’t be any more labour shortages but high unemployment. Wages will go down in a high inflationary environment in the next 6 months . Batten down the hatches .

#125 Dr V on 05.05.22 at 12:01 pm

113 fartz

“Why are successive govts allowed to squander BILLIONs of OUR TAX DOLLARS year in and year out ? [A]

A balanced budget should be LAW.”[B]
————————————————

Imposing [B] does not necessarily cure [A].

If I had to choose only one, I would pick [A]

#126 Bill on 05.05.22 at 12:27 pm

BANNED

#127 Sail Away on 05.05.22 at 12:31 pm

You know who’s not evil? Like, the personification of goodness? Yep, Elon.

“The number has been growing rapidly, and reports suggest the technology is working exceedingly well.”

https://www.msn.com/en-ca/news/world/about-150-000-people-in-ukraine-are-using-elon-musk-s-starlink-internet/ar-AAWX4E7?ocid=msedgntp&cvid=8bddd3f3de11484d871408615b124aca

#128 Don on 05.05.22 at 1:18 pm

My real estate correction story. A piece of farm property in gta sold in 1989-90 for 575 000.00. My wife and I bought the same piece in 1993 for 232 000. We negotiated for six to eight months and we’re not worried that someone would scoop it out from under us. It was that slow. One thing that was surprising was that even though we had over 50% down it was hard to get a mortgage. We ended up going to farm credit Canada for a couple of points higher

#129 Faron on 05.05.22 at 1:29 pm

I come here for Garth’s astute and steady hand. I stay for the SAGIs. Ponz, I hope you didn’t take the advice and walk youself into a zero alpha gain yesterday and a negative alpha slaughter today. Guess the Warren magic didn’t spread to attendees of the shareholder’s meeting. 🤦

#130 millmech on 05.05.22 at 2:08 pm

#123
with interest rates rising to the point where your purchasing power(mortgage qualification amount) is cut in half, maybe by this December how could one afford to buy at these prices.
The price will come down to the amount people can afford to borrow, that is it, that will establish the price line. Like Garth has said you could be waiting another 25 years to break even, I have seen it before especially in the Brokanagan as it was called and for good reason it got that moniker.

#131 MBA101 on 05.05.22 at 3:04 pm

“Canadian residential real estate can easily shed a huge amount of equity, retreating to 2015 pricing (for example – minus 50%), and stock markets will be just fine.”

I can’t see the housing market going back to 2015 prices in a vacuum. As an investor, todays prices do not make sense even with sky high rents. However, houses would be cash cows if prices were back at 2015 levels and the economy was trucking along as you suggest. This is true even at 6-7% rates. For rents to drop, something needs to happen to the overall economy or supply needs to increase in a dramatic way.

#132 Jurgen Muller on 05.05.22 at 6:30 pm

Many investors are shocked to learn that 30% decline in housing prices can pretty much wipe out 50% of price appreciation.

https://twitter.com/SilbergleitJr/status/1522244761649885185

#133 froggy on 05.06.22 at 11:52 am

#66 yeh your wright can’t wait for deflation right on then down she goes interest rates just before gas at the pump goes 2.50 liter and were all broke sure we’ll party like 1999 it shows how we think the party will go on but that train left the station and we’re in for a huge correction then a melt housing is done