‘Please stop now’

Another great week to spend at the cottage or gazing into your dog’s dreamy, vacuous eyes. What happened Friday will be framing events on Wednesday, which promises more market volatility and realtor angst. If you hate change then, for the love of God, do not read this blog this week. I implore you.

On Wednesday the US Fed raises its rates a half point. Already mortgages there have zipped over 5% (plus gas is above $5) and we heard at the end of last week that inflation is unbridled. At 8.6% there’s no sign of retreat. The Fed should actually raise by 75 bips, but fears a market surprise. So, fifty it is. More later.

Consumer confidence among Americans has collapsed largely because of rising prices. The Biden administration is being hammered as a result. But there’s no quick fix. It does not bode well for the Dems in the November midterm elections, which could lead to a gummed-up Capitol for the next two years. Meanwhile Putin is making yards in Ukraine. Grain is rotting. China is Covid-crazy again. And Canada can’t even run an airport.

So, lots to vex over. As stated here last week, financial assets are not immune, but if history’s any guide, the correction will be brief. However, history has another lesson about houses. As rates rise, real estate falls. The gains of the last two years were unwarranted and are rolling back. Unlike stocks, houses get illiquid. Also unlike your RRSP or TFSA, they require a lot of leverage to acquire. And history shows us meaningful bear markets in real estate take years, not months, to restore.

So let’s go to Guelph.

That city of 140,000 about 100 km west of the Big Smoke was torrid six months ago. Almost no inventory. DOM of one or two days. Multiple bids. Over-asking. And a 50% 12-month price gain. As with Cambridge, K-W, Milton, Richmond Hill or Whitby, average prices soared through the seven-figure mark, even though local incomes could not support them.

That was then – the winter. This is now – a smoky hole. Consider 11 Stirling, an ugly white brick, garageless backspilt which sold in a haze for $1,217,000 on February 8th. Something bad happened (buyers walked) and it hit the market again in April. Asking $899,900. At the end of May the price was slashed to $799,900, and it changed hands last week for $868,000.

The price drop: almost $350,000, or 28%. Of course, the buyers in February would also have paid land transfer tax of $21,000 and a sale commission of $43,000 to get out. Total loss then: $413,000.

Here’s the proof.

Mortgages this week or next should hit the five per cent mark in Canada. Bond yields went nuts on Friday. The Bank of Canada is expected to be all macho between now and Thanksgiving. There’s talk that oil – now at $120 US a barrel – will sail through its former all-time high and crest somewhere over $150. Some are betting on two hundred. So imagine what gas at $3 at litre will do to the inflation rate and central bank resolve.

Energy shock is hitting Bunnypatch, naturally. Just as most people are being called back to the workplace, either full-time or hybrid, commuting costs are epic, and rising. Many of the premises that underpinned the real estate eruption in the distant suburbs, hick cities and rural regions are gone. The pandemic’s over. WFH is fading weekly. Employers have lost their empathy. Non-urban living costs are higher and services lower. The Covid refugees now face falling property values, market illiquidity and the certainty of mortgage renewal at far higher levels. And there aren’t enough Starbucks.

No surprise then that the latest realtor stats show a sharp divide between city values and those in the hills. Here’s the GTA scorecard:

Source: Toronto Regional Real Estate Board. Click to enlarge.

As detailed last week, this will get worse. If you’d thought about selling, best do it now. If you’ve contemplated buying, take your sweet time (and go conditional). Revenge is not to be hurried nor pain-free.

Finally here are a few thoughts from people we check in with to get a pulse of the market.

Crusty mortgage dude Ron Butler: “Canadian Bonds Didn’t Like That US Inflation Print. Couple thoughts on all the Fixed Rates going up again next week: – Anyone shopping for a house please stop NOW, take the Summer off, take a look in the Fall. – Those renewing in the next 4 months CALL THE LENDER NOW.”

East-end realty broker Michelle Makos: “So many homeowners borrowed against these inflated home prices with Helocs doing renovations, motorcycles, boats etc. now it will be time to pay the Piper. This won’t be pretty.”

Veteran mortgage exec and former CIBC heavy Vince Gaetano: “It’s amazing how many times I have to explain to clients to “SELL BEFORE BUYING” , especially in this market and they appear to be offended with the recommendation.”

Realtor, media gadfly and broker John Pasalis (who still hates me): “Your home buying and selling strategy needs to change based on market conditions. And in today’s market it’s safer to sell first. Even in areas where homes are selling quickly today, it’s a risky strategy to buy then sell. The market can turn on a dime even in those areas.”

These are people who inhale real estate daily. It is their profession, their livelihood and their fixation. Heed them. And stop coming here. It’s unhealthy.

About the picture: “I have been reading your column for years and want to thank you for all of your informative and entertaining columns.  I never miss a day,” says Dan in a fine MSU. “The photo is of Toby, our yorkie-poo, who has been gone now some 12 years.  Toby loved to swim, although his expression doesn’t seem to say that in this photo!.  Being over his head in the water was a frequent condition for him since his legs were so short.  This photo is actually from 2004, at Shuswap Lake.  We also never needed a doorbell when Toby was around, because he seemed to think his job was BEING the doorbell.  And as such, he was always fully employed!”

131 comments ↓

#1 Bucky on 06.12.22 at 4:00 pm

Have to ask, how many of the 35% mortgage free households have HELOCs? May bring that interest rate risk up a bit.

#2 It's different here on 06.12.22 at 4:03 pm

Hello Garth,
Greetings from Victoria. I was wondering if you heard the one about some of the big banks moving there pre-approved mortgage rate holds from the 120 days to just 15 days because of the ever increasing bond rates. Some bank folks here have been saying they have had to call unhappy customers to inform them of the new policy. Just wondering if this is just a rumor or if it has been heard happening elsewhere.

#3 Dirk Gently on 06.12.22 at 4:04 pm

Frankly, I’m terrified. Renter forever in LM but I can see the writing. I hope there is a special place for the greedy ones. I don’t think this will leave anyone unscathed.

Stay safe. Stay diversified. Scale back, and cut expenses. Oh and find some loving eyes to gaze into. True love is furry and four legged.

#4 Felix on 06.12.22 at 4:05 pm

“Another great week to spend at the cottage or gazing into your dog’s dreamy, vacuous eyes”

Bless you, Garth, as you embark upon your (long-delayed) journey towards the painfully obvious truth of dogawful canines.

‘Vacuous’ definition:

-not expressing or showing intelligent thought or purpose

(Cambridge Dictionary)

-emptied of or lacking content, stupid, inane, marked by lack of ideas or intelligence
-devoid of serious occupation : idle

(Merriam-Webster)

Surrender your dogawful mutts. Get a cat. Help the planet and human society.

The truth will set you free.

#5 Prince Polo on 06.12.22 at 4:06 pm

Keep the “doom n gloom” posts flowing aplenty, please!

How else can loser renters like me feel vindicated?

#6 Don on 06.12.22 at 4:13 pm

The best news this year!!!! Thank you.

I dumped my house last year for 8 times the money I paid for it 20 years ago, in Mississauga. Renting now till the madness ends. Following your advice!

#7 The Original Jake on 06.12.22 at 4:13 pm

I am a shorter if oil gets to +$150. A self-imploding commodity. The higher it goes, the greater the risk of a market collapse.

#8 None on 06.12.22 at 4:17 pm

When will people start selling their toys?

I figure starting next summer where all the 5-year fixed renew and there’s no cheap variable to hide in.

So…. Garth… your time has come. This must feel good. It makes me feel better after warning of risks the last 5 years and being ridiculed for it. Thing is, this blog was never wrong (except for maybe the Canadian flag this) it’s just REALLY hard to communicate risk to people especially when people taking on extreme risk are being so richly rewarded.

May I ask for a blog topic please?

For those of us who have been waiting to buy to a reasonable level of risk –>
1. How does adequately prepare for a potential buying opportunity in 2-3 years?
2. Where do we put our money that’s in the 70/30 in our TFSA? Do we move it over?
3. What are reasonable metrics to use to evaluate a market bottom (bottom is extreme – maybe where there is more upside than downside).
3a Combination of months to inventory?
3b. Buy/Rent ratio finally means something again?
3c Slope of decline over a certain time period marginally negative or positive?

These are things I’d really like to know.

Thank you.

#9 Don on 06.12.22 at 4:23 pm

Love to know the stats for Cambridge/Kitchener

#10 Overheardyou on 06.12.22 at 4:24 pm

I come here because it’s the only place I can trust with regards to finances :)

#11 KNOW IT ALL on 06.12.22 at 4:27 pm

The cure for higher prices is……

HIGHER PRICES!

#12 When Will They Raise Rates? on 06.12.22 at 4:28 pm

I can’t believe someone actually paid $1.2 million for that fugly dump… In dog foresaken Guelph to boot! What were they thinking? LOL

#13 None on 06.12.22 at 4:28 pm

Sorry, another question.

How does someone recover from losing 400K??

Who are these people? I’d love to hear the story about this person. Did they previously make a ton and this is just cost of doing business? Did they declare bankruptcy? Was it money laundering so it’s OK?

What’s the deal?

#14 Cheese on 06.12.22 at 4:33 pm

Hope was abandoned some time ago, anyone know what stage comes after despair? Portfolio is down 3x gross annual wage, having some trouble with psychological stability.

Not liquidating, too stubborn.

#15 crowdedelevatorfartz on 06.12.22 at 4:33 pm

$3 a liter gas.
Ponzie….say it ain’t so.

Speaking of gas and summer.
I booked a flight to Nova Scotia in July to vist the relatives.
( Garth, this is your warning)

Then I tried to rent a car…..

https://www.thestar.com/business/2022/06/02/shortage-of-vehicles-and-rising-prices-could-lead-to-carpocalypse-in-the-rental-market-this-summer-experts-warn.html

Several weeks later I have a friends car lined up for two weeks.

I checked with my car insurer out here if I was covered for a private vehicle. ( The govt car insurance out here will cover a Rental car insurance with your car policy in any province because your car here isn’t being driven…. not a bad deal).
Lots of humming and hawing….checked and seems I have to get a $10/day policy to cover a private vehicle.

Anywho.
While I was there a fellow walked in to renew his insurance and heard what we were discussing.

He laughed,
“I tried to book a car for a month in New Brunswick to fly back with my wife and kids for a family reunion…..Nothing, nothing, nothing.”
( Note to tourism marketers. There’s gonna be a lot of cancellations and p!ssed off people when they arrive.)

So he has cancelled his flight ($6000 for 4 people) and has purchased a 1994 Motorhome with a 454 cubic inch engine and a 150 liter tank.
“I’m fixing it up and getting it ready for the Cross Canada tour.”
He is going to drive to NB, PEI and NS. He’s estimating a $9000 fuel bill to get there and back.
I asked him if he has considered $3 a liter gas by July.
He turned green.
I didn’t ask if he was changing every hose, belt, battery and tires on his 28 year old Motorhome …..before setting out.

#16 crowdedelevatorfartz on 06.12.22 at 4:37 pm

@#2 It’s different
“I was wondering if you heard the one about some of the big banks moving there pre-approved mortgage rate holds from the 120 days to just 15 days because of the ever increasing bond rates. ”

+++
Wow!
It wouldn’t surprise me.

#17 Don on 06.12.22 at 4:42 pm

True dat.

#18 T Rex and the dinosaur clique on 06.12.22 at 4:43 pm

Weird that all those deep pocketed foreign buyers, who were the real cause of the massive run up in house prices, seem to have just vanished, before the foreign buyer ban was even put in place.

Oh well.

I am sure that is just a coincidence.

#19 Don on 06.12.22 at 4:44 pm

#13 Beleive me! Some have real deep pockets. They can withstand big losses. And then it becomes a write-off against the next gain.

#20 Johnny Debt on 06.12.22 at 4:45 pm

How is that dump worth $868,000 – even if that’s your Canadian dollarettes?

Did you see the video of my Bahamas private island house? Not much, but more than this Guelph dump.

Seriously, you people are out of your minds. This is a $199,000 house if I’ve ever seen one.

Isn’t Canada the 2nd largest country on the planet? With like just 38 million people in it? Isn’t that population same as Poland? In a country 30 times the size of Poland? Get a grip people!

#21 Adam on 06.12.22 at 4:48 pm

Seems like we are setting up for a bloody week. Won’t be long until Ukraine collapses. The US is losing interest in it. I already see a lot less Ukraine flags on profiles. People aren’t going to want to keep sending billions of dollars to Ukraine while gas is $5 a gallon. Once this happens, and Russia has full control over Ukraine uncontested, then look for China to move into Taiwan. I think 2022 might just end up being one of the worst years on record for stocks, bonds AND houses. All 3 are being destroyed. When was the last time all 3 were hit so hard at the same time?

#22 k on 06.12.22 at 4:50 pm

Hi Garth. Another revealing blog. My wife and I sold a townhouse in Kits 4 years ago and bought a same size townhouse in a little 20 thousand seaside town called White Rock for less than half the price with an ocean view. We put the money in the bank at about 3% (I know way too conservative ) But we can get 4.3 % interest At Canadian Western Bank with a 10 year term GIC ! The CB rate is only 1.5 now and maybe 2.25% on July 13th. Wow by the end of the year GIC’s could be 6 or 7 %. I would never have believed that these changes could happen so quickly ! Apparently a lot of people will be caught off guard in a negative way.

#23 Søren Angst on 06.12.22 at 4:52 pm

RE agent contriteness today on Twitter. Example as to why:

https://twitter.com/mohitsharma22/status/1535823975514767361

30 yr veteran RE agent with a conscience per the above:

https://twitter.com/agentgina1/status/1536013271383347205

I also follow the people you quoted today in the Blog Garth. They are good heads.

Butler has it:

“…take the Summer off, take a look in the Fall”

——————

Chill, escape life in Il Bel Paese Canada.

“Vogalonga di Venezia” today (the largest “rowing party” that exists in the world, a race of about 30 kilometers reserved for rowing boats) AND sorry Dragon Boat China:

https://twitter.com/Reuters/status/1536072091954446350

In Sept Venezia has the “Regata Storica”, the best, a must see (sorry again China):

https://www.regatastoricavenezia.it/en/

Seen them both at least twice. Best place to view is from Ponte dell’Accademia or the Peggy Guggenheim Museum (buck up, take in some great art and view from the Terrazzo) or Campo San Vio in between the two.

After that, take a 12 min walk to one of the World’s Top 10 Bars (that invented the Bellini) Harry’s Bar. Slosh back 1 or 2 of their Bellini’s and you will NEVER EVER AGAIN drink that fetid colored sugar water by the same name served in English Bay.

Escape Canada. Be less worried and frenetic. Italia will slow you down.

La Dolce Vita. Il Bel far Niente.

PS:

Low 30’s the highs for the week here in NE Italia, cooler at night in the upper teens to low 20s. Upper 20’s in Venezia. Good time to come to Italia if you hate the heat even though we have A/C.

Not called Sunny Italy for nothing.

#24 Roofer on 06.12.22 at 4:52 pm

Detached double car garage Houses in Oakville down huge.
Selling for $2.2-2.4 million in January now selling for $1.6-1.8 million last week.

Delusional sellers still wanting January prices are delisting.

Town homes also down 33%!

#25 Johnny Debt on 06.12.22 at 4:54 pm

….here is your $868,000 dollarettes…in same population Poland, a country 30 times smaller than Canada…with convenient driving access to…ALL OF EUROPE.

https://www.remax-polska.pl/en/listings/villa/for-sale/potrzanowo/wlokna/790121023-3?LFPNNSource=Search&cKey=790121023-3&HighlightingWords=

OR…you can have that…whatever the hell that is…but it ain’t a house….certainly not one I would let a cat or a dog live in. I mean…I would let a dog relieve itself on the bed…I guess. But other than that…no animal deserves to suffer in that thing.

#26 The Regulator on 06.12.22 at 4:57 pm

# 4 – Felix : Thank you for your umpteenth vacuous post today. How vacuous of you.

#27 Bob Loblaw on 06.12.22 at 4:59 pm

The average Toronto home is now 15% more expensive than the average home in New York City, while the average income in Toronto is only 55% of the average income in New York City. Logic says that at some point the 416 is going to crash too unless Canadian urban dwellers are willing to spend more than twice as much of their incomes on housing as American urban dwellers.

#28 wallflower on 06.12.22 at 5:00 pm

#13 None on 06.12.22 at 4:28 pm

I’m with you. Who and where are these people? Will their stories start popping up in popular media?

This kind of listing history is becoming common around my ‘hood so it is clear mounting losses are prevailing.

It is also clear from the escalating listing volume that people are expecting 2022 February prices forever.
2022-02-02 could become the next massive meme.

#29 Jason on 06.12.22 at 5:10 pm

My mortgage comes up in 2025. Currently at 2.49%. Is it prudent to start paying down the principle (double payments or annual lump sum) now in anticipation of a significantly higher rate than with those funds coming from what we’re now putting into our investment portfolio?

No. It’s free money. Grow your net worth outside the mortgage and pay it down upon renewal. 2025 is a long ways off. – Garth

#30 DonCarlos on 06.12.22 at 5:14 pm

Whoo boy. The next 24 months or so stand to be interesting. Watched my friends buy or take on huge debt at the peak. I don’t want them to suffer, of course, but the struggle is real. I’m getting ready to invest hugely in the dips starting next month. My high risk investments have taken a beating, fortunately they’re a minor part of my portfolio. Everything else was so overvalued it didn’t make sense to buy for the past year. But we’re getting to the point when there will be a pretty considerable discount on nice, reliable, stable, proven investments and I have RRSP contribution space to use up…goal is to have no debt and a seven figure portfolio by the start of 2025. Then we go house hunting. Finally. After years of waiting.

#31 Sail Away on 06.12.22 at 5:30 pm

Yep, things are tough all over. The Vic trip was fun, but it’s nice to be back home on the plantation where the vegetation has exploded with this perfect growing year. Thousands of hazelnuts, cherries, apples, pears, plums. Can’t wait for the cherry pies!

#32 Søren Angst on 06.12.22 at 5:35 pm

#25 Johnny Debt

Dude, Poland and wonderful as their people are, is on the Baltic Sea.

Not exactly central.

And for that price or lower, there are 829 villas* in the Province of Florence, Tuscany. Or over 1,000 villas most clustered around Viareggio by the coast, again in Tuscany. Or over 400 in the Province of Siena, Tuscany.

Pretty sure most people, you, Diane Lane and Sandra Oh would rather live Under the Tuscan Sun.

* Country home in Italia.

#33 crossbordershopper on 06.12.22 at 5:38 pm

I was born and raised in guelph till I left for Univesity. It has always been a weird town. First there were too many Italians, (I am one). then others moved in and they are a minority now. In terms of jobs, there were only Linamar, a tobacco company, the University, some odds and ends. As the pop increased and the south end became a bedroom community prices rose. Prices in Guelph have always been high, its a rigged controlled market. City hall really does control things in terms of development. They are always voted one of best places in Canada to live given all the factors, Personally, its a nothing city with no soul. The greens run the politics, which i never did understand, its a liberal city for sure, no question and it has ok hospitals, sister in law works for one. I find Guelph in general an ok city to live in, but i moved on to bigger and better things.
I guess i will inherit a couple million in real estate soon, but who cares, still a green controlled city, with not a lot amenities, they like it that way, they want to keep the small town feel as much as they can and control urban growth. I am cool with all that.

#34 Don on 06.12.22 at 5:39 pm

#20 You got it. This is NOT POLAND. Thank God.

#35 NOSTRADAMUS on 06.12.22 at 5:44 pm

THE WHIP MAN!
For the past number of years real estate buyers have had the speculative bit in their teeth, pulled this way and that by the real estate cartel and their whip man the media, creating delusions of unlimited wealth.
The reason that delusions are so hard to fight with logic is that delusions themselves are established through logic.
Responsibility for delusions is more likely to be found in distorted perceptions or inadequate information. The problem isn’t disturbed reasoning, but inadequate information inputs that the eyes, ears, and mind perceive as undeniably real.
Delusions appear to reflect not a defect in reasoning itself, but a defect, which is best described as data gathering bias, a tendency for people with delusions to gather less evidence so they tend to jump to conclusions.
Coming full circle, it is obvious that the real estate cartel will be found guilty of providing only the best evidence to support the delusion that real estate values only go up, not down in value.
The unbiased media, to lazy to actually do any investigating reporting, only taking the submitted real estate cartel news and duly publishing it verbatim.
In the final analysis, the fate unfolding for so many speculators will be traced back to self serving gossip. Because this preoccupation with gossip( real estate values only go up) determines people’s fates. Gossip rewards the purveyors of it. The process is self re-enforcing. News is rarely news, rather than hyped gossip about prices only going up-up and away. Thank the realtor estate cartel and their wing man the unbiased media for creating this destructive delusion. Steady lads, hold the line.

#36 Concerned Citizen on 06.12.22 at 5:45 pm

It’s progress, but the disturbing thing is that home still sold for $868,000. In any other year that would have been a ridiculous number for that home.

Perhaps this makes me a bad person, but I really do hope all the speculators lose their shirts. I want this to blow so big that people sour on the idea of real estate speculation entirely for a generation. Sure that will hurt some folks that FOMO’d into their first home over the last couple years, but in the medium to long term it’s best for society.

My real fear is that the government will step in to rescue the home speculators to protect their absurd windfall gains. After all, so many MPs and MPPs are landlords themselves. Can we count on them to do what’s in their personal interest or the interest of the country as a whole? Hopefully the latter, but I have grown cynical…

#37 Don on 06.12.22 at 5:53 pm

#27 NOSTRADAMUS

I hate long harangues. But you are right.

In short, it is called …. DISINFORMATION.

#38 crowdedelevatorfartz on 06.12.22 at 5:54 pm

@#24 roofer
“Selling for $2.2-2.4 million in January now selling for $1.6-1.8 million last week.
Delusional sellers still wanting January prices are delisting.”

====
yep.

Denial isn’t just a river……it’s a river of tears……

This is just the beginning.

#39 Mr Wenslydale on 06.12.22 at 5:58 pm

Well, well. As a perrenial Chicken Little on canadian real estate, this has been a most satisfying blog post to read – at least in appeasing my confirmation bias. Thanks Mr Turner for this public service.

I’ll admit I’m a little fearful what the debts of others will do to our silly Canadian economy and my investments (and the general state of the world right now). I mean, come on, quick correction to the markets? They’ve been losing altitude for the last six months and the master caution keeps alarming anew each day with another problem.

But this Chicken Little will sleep easy, with a clean conscience, a healthy B&D portfolio, and having just signed a rental lease, knowing I will wake up in 8-12 months Vulture. As sad and petty as it may be to say it: I’ve been waiting for this period – to say “Told you so” – for a long, long time.

#40 Paddy on 06.12.22 at 6:04 pm

I think that you and Ron are actually friends in real life, it’s just an ongoing joke that he hates you….like to know the true story.

#41 crowdedelevatorfartz on 06.12.22 at 6:06 pm

@# 56 A quintillian questions

“Also… Crowdie, you still buying on the dips?”
+++
Does that mean….
Every time you post?

#42 Søren Angst on 06.12.22 at 6:08 pm

#31 Sail Away

Only 1 of these places has a “perfect” growing year going on right now:

https://twitter.com/bsant54/status/1536105948946866176

For lemons, oranges, kiwi fruit, watermelon, cantaloupe as opposed to the cold climate common stuff Cdns like you grow (incl. their grapes that makes wine for the most part, undrinkable – Kelowna Merlot is like drinking ink).

Provincial to say the least.

#43 Johnny Debt on 06.12.22 at 6:09 pm

#32 Søren Angst

Dude…pretty much any place is better than Guelph at $868,000 dollarettes for a shack.

I was really just pulling a country matching population and spend amount. But I have absolutely no objection to your Italia, or Spain.

My Polish mechanic, who is missed already, sold his house and shop building in this crazy real-estate land and retired in Spain in a villa – at 49. He’s done with Canada.

#44 Søren Angst on 06.12.22 at 6:16 pm

The Summer of Discontent.

Going to be a rough ride for at least 2 years Garth.

Cdn RE aside, I worry most about Canada’s Youth.

They are very vulnerable from a cash flow point of view and will see a good chunk of their Net Wealth eroded since most of it is in RE and a +20% drop in price is going to put most of them (Median) into a Negative Net Wealth position.

Consumer spending in Q1 2022 was:

65.5% of GDP.

It’s the Young that spend not us Paleo’s. Watching that number closely. Expect people to dig in their feet and cut spending to better make ends meet.

By how much? And will that put Canada into recession by 2023, earlier?

Who knows?

There is a foreboding.

#45 Leon Umsk on 06.12.22 at 6:19 pm

Pretty frightening losing more on a house sale than what that house cost not that many years ago. I bet less than ten years ago that house wasn’t even $300,000.
Seeing some of the people they interview for the news is interesting lately, especially at gas stations. The American ones really make me shake my head, they say things like all I know is gas was a lot cheaper with another administration. These people seem to believe Biden could actually change the price but just won’t. Of course with all of the politicians of every stripe lying so much and so often, taking credit for everything positive even when they have nothing to do with it I guess it’s to be expected.
Boy if oil goes higher still like that people won’t be able to heat their homes in the fall and beyond let alone drive their cars. It is getting scary and even more so for low income/fixed income people.

#46 B from Q on 06.12.22 at 6:25 pm

Thank you Garth for confirming that the pandemic is over.

For now. – Garth

#47 Søren Angst on 06.12.22 at 6:29 pm

Not seeing $150 oil Garth.

Well, at least not from Futures Contracts, WTI:

https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic

YTD Performance:

+57.55%

yeah oil.

#48 Peter pickles on 06.12.22 at 6:35 pm

Blood in the streets here in Peterborough.. sales drying up and listings are piling up. Prices are all over the place and nobody knows what to offer any more. Comparable houses on the same street going for 100k differences within the same week.

The people who bought in February must feel like complete idiots.

#49 Interloper on 06.12.22 at 6:44 pm

DELETED

#50 baloney Sandwitch on 06.12.22 at 6:44 pm

Hats off to the Guelph people who sold. It takes guts to sell at such a loss. Wonder what happened? My guess is they split up or were about to. Must be the stress of buying high and the commute. Poor bastards.

#51 Stone on 06.12.22 at 6:52 pm

#14 Cheese on 06.12.22 at 4:33 pm
Hope was abandoned some time ago, anyone know what stage comes after despair? Portfolio is down 3x gross annual wage, having some trouble with psychological stability.

Not liquidating, too stubborn.

———

If it’s a B&D portfolio, then it’s only a minor and temporary inconvenience…like a mosquito. If it’s not a B&D portfolio…

#52 yvr_lurker on 06.12.22 at 6:52 pm

No. It’s free money. Grow your net worth outside the mortgage and pay it down upon renewal. 2025 is a long ways off. – Garth
————————
That is precisely the mindset that I had 3 days ago that Garth was somehow not keen on. I crunched the numbers and depending on where a 5 year mortgage is in 2024 it is likely advantageous to make a rather large payment at renewal time. Has the advice changed in 3 days? Better yet, who do I bother asking anyway…

I think you are mistaken. This advice has been consistent. – Garth

#53 TurnerNation on 06.12.22 at 6:58 pm

All eyes on the one index that matters.
The Long Branch Sht Bung. index.
Smoking Man picked the true top already.
(What followed 2021-22) was a manufactured oversight.


Health Watch. What is going on the Former First World Countries? The last two years of inhumane restrictions and made-up mandate were supposed to bring us SO much health??

.Doctor says Toronto emergency room wait times are at an all time high (toronto.citynews.ca)

https://www.theguardian.com/society/2022/jun/12/paramedics-are-leaving-in-droves-as-ambulance-callouts-almost-double
“The number of calls for an ambulance in England have almost doubled since 2010, with warnings of record pressures on the NHS that are seeing A&E patients stuck in corridors and many paramedics quitting the job.”

https://www.perthnow.com.au/news/health/st-john-wa-flags-ambulance-delays-after-extremely-high-levels-of-demand-c-7120455
St John WA has alerted Perth residents of more ambulance delays as paramedics experience ‘extremely high’ levels of demand.
…WA has been rocked by a string of cardiac deaths involving long-wait times for ambulances, as ramping continues at unprecedented levels.

#54 Reality Check on 06.12.22 at 7:15 pm

Always amazes me

under Trudeau’s reign of error:
– house prices have doubled
– inflation is running rampant
– energy costs have skyrocketed
– he fired the only woman liberal that would stand up to him
– blindly reacting to politics in Texas rather than address Canada problems – all in an attempt to divide canadians
– formed a coalition government with the NDP
– has been silent and terrified while Quebec commits cultural genocide against English
– and generally reneged on every major election promise he has made

Yet you people in Ontario/Quebec will vote liberal next election and likely reward Trudeau with another term.

You get the government you deserve.

Or unfortunately the rest of Canada gets the government Ontario/Quebec deserves.

Is BC not part of the West anymore? Lots of Lib and Dipper MPs there. – Garth

#55 Sail Away on 06.12.22 at 7:22 pm

#42 Søren Angst on 06.12.22 at 6:08 pm
#31 Sail Away

Only [Italy] has a “perfect” growing year going on right now:

For lemons, oranges, kiwi fruit, watermelon, cantaloupe

Provincial to say the least.

———

That’s cool.

Italy sounds like the best place for all things in the whole wide world.

Henceforth, I will try to remember to preface all comments with: ‘Although not as good as Italy, …’

#56 Doing my Part on 06.12.22 at 7:25 pm

Bitcoin on it’s way to Zero, get out while you can.

#57 Stuck on Stupid on 06.12.22 at 7:33 pm

Usual suspects the car dealers, bankers, lenders, realtors, developers, politicians, immigration consultants etc. all have their hands in the pie and all have very black eyes.
Screwing over immigrants to pad their pockets knowing what the outcome would likely be should give the regualtory authorities great cause for concern.

#58 Reality Check on 06.12.22 at 7:35 pm

The people who bought in February must feel like complete idiots.
—————-

But oh no, all will be well for these people. After all we have unbiased real estate humpers saying that houses are the super best investment ever. And those houses in Bunnypatch will be worth 4, 5, 6X in 5 years time. So family income will only need to be $500,000-$700,000 annually to buy them. Impossible you say – well no it will be all those millionaire immigrants that buy them because after all they are all doctors, accountants and engineers qualified to work in Canada. (Ignoring the fact that the average Canadian doctor, accountant or engineer does not makes that kind of coin.)

Yep that’s the best place to get economic advice – from totally unqualified people that are trying to sell you something.

Maybe tomorrow I’ll head down to the used car lot to ask where they expect Tesla shares to be at in 5 years.

#59 Bud on 06.12.22 at 7:54 pm

US should lift the Iranian oil embargo.

#60 Jacqueline Moses on 06.12.22 at 8:17 pm

#3 DIRK
Yeah alot of people in Calgary would also be forever renters in LMface.
Which is why we are enjoying a detached for under $600k!! And no gst and way lower gas prices, etc.!
Get over it. And this isn’t meant for you, but for others in your situ who have an open mind and like a backyard with money to spare to take a trip and still invest

#61 A01 on 06.12.22 at 8:22 pm

Garth please do a Blog on Cottage Country!!! How are those values being affected by the rising interest rates.

#62 GTA correspondent on 06.12.22 at 8:37 pm

Was at Sherway Gardens mall today and judging by how busy it is, the interest rates aren’t high enough yet. People still out in droves.

#63 Stealth on 06.12.22 at 8:43 pm

Thank you Garth,

So looks like all of this will be over by Christmas (you know us midterms may pave the way for helping with peace deal and with Europe’s heating problem, perhaps some grain transport deal and a bit of opecs energy relief, and yea we all loose 10 lbs)

Wait I think have we heard “it’ll be over by Christmas” before hmmm.

#64 Km on 06.12.22 at 8:46 pm

We were at metrotown mall today in the LM, it was packed. Every spot at the iPhone store was taken, every table at the food court with hundreds milling around. If people are hurting it definitely didn’t show with all the over laden men walking around caring their partners bags. It reminded me of Christmas shopping. Downtown is full and so are all the places near our place in English Bay to eat out , either no one is worried or most just live on credit. Probably the former.

#65 Dr V on 06.12.22 at 8:50 pm

1 Bucky

“Have to ask, how many of the 35% mortgage free
households have HELOCs?”
————————————————-

A HELOC is a “Home Equity” line of credit and is secured
by a charge on title similar to a mortgage ie – it IS a mortgage.

#66 Linda on 06.12.22 at 8:55 pm

Interesting comments re: car rentals. We had been tire kicking the concept of ‘in Canada’ travel; Nova Scotia, fall colors, etc. Did some looking at places for rent, noted that many were fully booked well into 2023. Then started looking at vehicles for rent. Uhm, honey, we might want to re-think the travel to other parts of Canada idea…..

#67 Dr V on 06.12.22 at 8:57 pm

42 Soren

“Kelowna Merlot is like drinking ink”
——————————————————

I was drinking mostly Italian reds until a friend put me onto an Okanagan “blended” red – Diabolica. Perfectly fine wine.

#68 Sail Away on 06.12.22 at 9:00 pm

I think this season will be time for an inaugural deer haggis:

Basically recipe is to remove the heart, liver and lungs, mince them all up with onions, oatmeal, suet (the hardened fat from around the kidneys) and seasoning. Mix together, stuff it into the deer’s stomach, secure with clips and boil until done.

Report to follow.

#69 yvr_lurker on 06.12.22 at 9:06 pm

Is BC not part of the West anymore? Lots of Lib and Dipper MPs there. – Garth
————–
Hate Trudeau and Singh. However, I must still be labeled a Dipper as am a keen supporter of Eby and Horgan and what they have accomplished over the 5 years. Falcon would be a complete disaster…

#70 Reality is stark on 06.12.22 at 9:15 pm

I can’t believe people are closing after taking $600,000 losses in 3 months.
I bet half of them are just walking and couldn’t care less about the consequences.
This train wreck is just getting started.

#71 crowdedelevatorfartz on 06.12.22 at 9:16 pm

The BC Provincial Liberal Party has decided the brand “Liberal” is losing it’s cache’.

Get ready for a name change for the provincial party.

Seems the old Christy Clark “Liberals” and the Trudeau Liberals are starting to smell.

But the conservative leaning, pro business, anti union BC “Liberal” Party can’t use the name Conservative….it’s already taken and the old Social Credit name still stinks.

Perhaps the blog dogs could make a prediction as to the new name the BC Liberals will use?
Something politically correct but inoffensive to all.
Something gender generic.
Something that speaks the truth yet offers hope.

The BC Debtors Party?

#72 ric on 06.12.22 at 9:17 pm

the people who bought stirling at 1.2 never closed on the sale. they backed out and are probably getting sued for the difference from what it sold for in april

#73 Philco on 06.12.22 at 9:40 pm

Thanks Garth….WOW….Not watching the events to busy. Here for a quick review….Never got up in the madness. Crazy shit going on. We all good here.

#58 Reality Check on 06.12.22 at 7:35 pm
TSLA….this idiot (me) also warned TO BAIL at $1200 .

#74 TurnerNation on 06.12.22 at 9:46 pm

Welcome to the Everything Bear market.
Treasury Blondes; Stonks; Crapto Currencies; Houses & Kandos.

Global WW3 was kicked off that cold week March 2020. And some thought it all was ‘for their health’. Ha. Ha. Ha.
Silent Weapons. Interest rates and Inflation.
Almost back to 2019 normal right, any day now??

———-

Control over our Feeding in the tax slave farm. Is a global thang now.

https://www.seattletimes.com/business/dutch-government-angers-farmers-with-tough-emission-goals/
“Dutch government angers farmers with tough emission goals”

https://www.abc.net.au/news/2022-06-09/food-processors-warn-gas-crisis-could-shut-them-down/101138228
Food processors warn gas crisis may shut them down and see food prices rise further

New Zealand unveils plan to slap a tax on cow and sheep burps to cut greenhouse gas methane
https://news.sky.com/story/new-zealand-unveils-plan-to-slap-a-tax-on-cow-and-sheep-burps-to-cut-greenhouse-gas-methane-12630579


– BUT YOU KNEW THIS.
Scope was spelled out. This chart is from the World Economic Forum’s own website in APRIL 2020. Helpful crew aren’t they?

https://pbs.twimg.com/media/EVdkqAbWAAEsSWs?format=jpg&name=900×900

#75 The real Kip (Ret) on 06.12.22 at 9:49 pm

The beatings will continue until morale improves!

#76 Craig on 06.12.22 at 9:55 pm

Thought only sellers paid real estate commissions in Ontario not buyers ? I’ve bought 3 homes in the past and never paid a realtor commission for purchasing, has something changed?

Of course not. The seller of the Guelph property paid LTT when buying and commission when selling. All a part of the loss. – Garth

#77 Brief Correction? on 06.12.22 at 10:09 pm

No, it’s just starting.

Yields up

Bonds down

Stocks down

Bitcoin down 12% as I type.

It’s just startin…

#78 I don't know on 06.12.22 at 10:29 pm

#13 None on 06.12.22 at 4:28 pm

-Who are these people? A minority. That’s who. It’s an extreme example. Most people who bought recently are busy enjoying their lives. If they smartly locked in generationally low rates then they are doing this:

“No. It’s free money. Grow your net worth outside the mortgage and pay it down upon renewal. 2025 is a long ways off. – Garth”

Absolutely correct thing to do. Pay down debt for a hard asset in rapidly devaluing dollars at a fixed rate for years was the smart play (and the main reason why Dec-Feb were so busy for the market).

IDK

#79 Ponzius Pilatus on 06.12.22 at 10:30 pm

#42 Søren Angst on 06.12.22 at 6:08 pm
#31 Sail Away

Only 1 of these places has a “perfect” growing year going on right now:

https://twitter.com/bsant54/status/1536105948946866176

For lemons, oranges, kiwi fruit, watermelon, cantaloupe as opposed to the cold climate common stuff Cdns like you grow (incl. their grapes that makes wine for the most part, undrinkable – Kelowna Merlot is like drinking ink).

Provincial to say the least.
——————————
How old are you, Dolce?
You sound like a 5 year old saying : my daddy can beat up your daddy.
Grow up.

#80 Ponzius Pilatus on 06.12.22 at 10:35 pm

55 Sail Away on 06.12.22 at 7:22 pm
#42 Søren Angst on 06.12.22 at 6:08 pm
#31 Sail Away

Only [Italy] has a “perfect” growing year going on right now:

For lemons, oranges, kiwi fruit, watermelon, cantaloupe

Provincial to say the least.

———

That’s cool.

Italy sounds like the best place for all things in the whole wide world.

Henceforth, I will try to remember to preface all comments with: ‘Although not as good as Italy, …’
—————————
Haha,
Good one, Sailo.

#81 Ponzius Pilatus on 06.12.22 at 10:41 pm

#67 Dr V on 06.12.22 at 8:57 pm
42 Soren

“Kelowna Merlot is like drinking ink”
——————————————————

I was drinking mostly Italian reds until a friend put me onto an Okanagan “blended” red – Diabolica. Perfectly fine wine.
——————
I’m not a whiner, but if I drink wine it has to be Bordeaux.
Italian wines are way overrated, I hear from people who know wines.

#82 I don't know on 06.12.22 at 10:47 pm

#21 Adam on 06.12.22 at 4:48 pm

-Might the worst geopolitical take on the current situation I’ve ever read.

Full control of Ukraine? With what army? Remember that was supposed to be accomplished after 3 days. The majority of US weaponry has not even arrived yet, and while Russia continues to bleed, the US can sit back and send arms.

As another poster smartly mentioned, oil is a cyclical commodity whose price is self limiting. When oil gets too expensive, everyone starts changing their habits to consume less of it. It will eventually fall, like always. Most likely after the Saudis and OPEC increase output in exchange for amendments (or outright trashing) of the Iran deal.

IDK

#83 MD on 06.12.22 at 10:50 pm

Along with aggressive rate hikes market will be adjusting to aggressive QT. As for housing it’s up to how the bond market reacts to this cycle of tightening.

#84 Ponnaps on 06.12.22 at 11:01 pm

Rather .. buy first, taking equity out of your current home for the down payment..then rent your current home esp if you can rent out the basement as well.. then wait for the market to bounce back and then make your sale.. buy when low sell when high .. … all the while being cash flow positive given the hot rental market

Did you just suggest 100% leverage? – Garth

#85 Cottage RE outlook? on 06.12.22 at 11:07 pm

#61 A01 on 06.12.22 at 8:22 pm

Garth please do a Blog on Cottage Country!!! How are those values being affected by the rising interest rates
———–

I second this.

#86 crowdedelevatorfartz on 06.12.22 at 11:10 pm

@#69 yvr lurker
“Falcon would be a complete disaster…”

+++
Agreed.
I’m no socialist but when BC Liberal leader Falcon smiles that toothy grin….
He reminds me of a barracuda in a suit.

#87 Russ on 06.12.22 at 11:13 pm

Reality Check on 06.12.22 at 7:15 pm

Always amazes me

under Trudeau’s reign of error:
…..

Yet you people in Ontario/Quebec will vote liberal next election and likely reward Trudeau with another term.

You get the government you deserve.

Or unfortunately the rest of Canada gets the government Ontario/Quebec deserves.
————————————————————-

Is BC not part of the West anymore? Lots of Lib and Dipper MPs there. – Garth

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

Garth misses the big point here.

The Canadian federal election results are announced back east before the BC polls have closed…

Does that seem like we have a say in how this country is run? I think not.

I will support change.

Cheers, R

That made no sense. Like Wexit. – Garth

#88 crowdedelevatorfartz on 06.12.22 at 11:17 pm

@#70 Reality is Expensive
“I can’t believe people are closing after taking $600,000 losses in 3 months.
I bet half of them are just walking and couldn’t care less about the consequences.”
+++
You can’t “just walk away”.
It a legal agreement.
So you have two choices.
Stay and take the house as is and the financial hit like the good little greaterfool that you are.
OR
“Just walk away” and lose the down payment, don’t get a house to live in , and, eventually, you WILL be successfully sued for the difference in price that the house eventually sells for.
An even bigger…… greater…..fool.

#89 Russ on 06.12.22 at 11:18 pm

B from Q on 06.12.22 at 6:25 pm

Thank you Garth for confirming that the pandemic is over.

For now. – Garth
========================

It’s just the flu.

Hot tea & lemon for comfort.
Don’t visit old people or diabetics and everything will be fine.

Cheers, R

#90 Inequity on 06.12.22 at 11:27 pm

#71 crowdedelevatorfartz

The BC Non Binaries?

#91 the Jaguar on 06.12.22 at 11:39 pm

Made a new aquaintance today via the youtube channel. I’ve got a crush on this guy. He is Indian External Affairs Minister Jaishankar. Seriously, he is just too sensible for words.

https://www.youtube.com/watch?v=9KwXJ-jlY44

#92 Tip on 06.13.22 at 1:16 am

Hi I saw some land for sale on eBay. The seller insists that surface rights is a mining claim, but an exploration company has the mining claim until 2025. Am I being swindled!

#93 SmarterSquirrel on 06.13.22 at 1:36 am

Garth,

I have heard some Canadian banks are keeping monthly mortgage payments flat as rates go up, resulting in more of the monthly going to interest and less paying towards principal, and the banks then extend the amortization period.

Have you heard of this practice and have you already commented on it in the blog before? Curious to hear your thoughts on this.

#94 Landlord no more on 06.13.22 at 2:37 am

Cottage Country RE:
On the sunshine coast of BC, my observation is that some summer weekly rentals are drying up. Owners who have been receiving $3000.00/week cash from families who have been coming for many summers, are suddenly getting lots of cancellations, “Even repeat renters”.
“I don’t know what’s up” said one owner.
Local RE weekly summer rental listings are getting longer.
Regarding fuel: One (100 lb) tank of propane delivered, now costs $175.00. Gas on that island, sold by 25 gal container: $2.75 litre. Perhaps there will be fewer people on the beach this summer. Hope so. Love cottage country!

#95 DON on 06.13.22 at 4:40 am

#21 Adam on 06.12.22 at 4:48 pm
Seems like we are setting up for a bloody week. Won’t be long until Ukraine collapses. The US is losing interest in it. I already see a lot less Ukraine flags on profiles. People aren’t going to want to keep sending billions of dollars to Ukraine while gas is $5 a gallon. Once this happens, and Russia has full control over Ukraine uncontested, then look for China to move into Taiwan. I think 2022 might just end up being one of the worst years on record for stocks, bonds AND houses. All 3 are being destroyed. When was the last time all 3 were hit so hard at the same time?

************
I have notice the same about the Ukraine War. Those US weapons cannot come fast enough and the Ukraine side is experiencing losses that are going untold by western media.

It wouldn’t surprise me if China attacks Taiwan next.

#96 Dave on 06.13.22 at 6:40 am

Schadenfreude. I have lived within or below my means for years watching while others have gone ahead and purchased stuff to increase their social status using money they don’t have. Now it appears that the game is changing and in my own way I have schadenfreude towards these people.

Years ago it was a status symbol to drive a posh car. It showed you were financially successful. Nowadays you can lease for a fraction of the retail price of the car. I have always bought with cash because I don’t like to owe anyone anything. Lots of newcomers to Canada living in brand new homes in Caledons L7C area. Homes cost $600,000 in 2016 and now the owners are trying to sell them for $1.5 million or more. Every few weeks it gets relisted for 100k less. I am sure most newcomers have taken out HELOCs to afford those brand new Range Rovers, BMW or Mercedes. Some of the less fortunate have to drive a new Audi. I think once time, interest rates and house values have reached the right level, a lot of these folks will move back from whence they came. Once they are gone the area will revert back to what it was with the likes of Sir Elton John, Eatons and Westons who actually have bags of cash but don’t flaunt it. You knew they lived here but you just didn’t see them…..except for the helicopters flying from Pearson to their estates.

#97 Diamond Dog on 06.13.22 at 6:47 am

Remember the “inflation has peaked” crowd? I guess they never heard of the PPI:

https://www.bls.gov/pPI/

“The Producer Price Index for final demand increased 11.0 percent from April 2021 to April 2022. Producer prices for goods rose 16.3 percent, while prices for services rose 8.1 percent.” – link

These were April numbers. May is fairly certain to be higher. PPI is known as a leading indicator of the CPI. Producer prices of 11% yoy inflation. Goods from U.S. producers rose a whopping 16.3%. 16.3%!

The good news (sort of) is, inflation number are year over year meaning July numbers should be lower as a consequence of a 2% pop in CPI inflation in July of 2021. Therefore, inflation will crest and decline in July! Yay!! Sort of… but we can just imagine how $ media will spin it, can’t we?

https://tradingeconomics.com/united-states/inflation-cpi

But, y’know, this is what it’s come down to. Inflation is coming down at some point not on it’s own really, but because of yoy stat compilations. Maybe.

Is the Fed rate going higher? 3 more .5% rate hikes the next 3 times they meet are pretty much guaranteed. The Fed will likely be at 2.75 – 3% in September and 3.5% by November. If they keep going past 2.75%, they are purposely causing a recession, that so called “soft landing” they talk about through demand destruction. Trying to reduce inflation through supply is too hard apparently. We could very easily see 3.25 – 3.5% by November as investors and should prepare for it.

Lets say the Fed is politicized to get Republicans elected and it works (it will) and Republicans take control of both houses. We could then see inflation moderate slightly past November (again, due more than anything to yoy stats) and the Fed rate would come down due to recession. This would pop coupon values.

There’s a case to buy bonds in September through November, but bear in mind that as the Fed lowers it’s Fed funds rate, the dollar will most likely weaken triggering inflation from a new source, a weaker dollar. The U.S. is also a debtor nation and is in a fiscally weak position. The U.S. is still the largest economy in the world and compared to other fiat currencies and fiscal realities, it’s an ugly garden party. This narrative may not hold water though if inflation is persistent well into 2023, the Fed lowers it’s rate and the dollar falls (for ball park values and timelines, more thought is definitely required).

Put this in the backdrop of an everything bubble uwinding and it’s counter intuitive, but the real money for investors I believe, is in bottom fishing for stocks during a crash sometime in 2023. This is not an “all in” scenario. We may not see true stock market index bottoms for several years for those who play with indexed funds. But, we may see some really high quality large caps sell for dimes on the dollar before then. Needless to say, we should already have an idea who the winners and losers are and who rises from the ashes first or at all. If we don’t already know, then we aren’t paying attention.

For the Crypto lovers out there, (are there any left?) Scott Minerd recently predicted bitcoin hitting $8,000 (one can extrapolate where the NASDAQ is headed, chuckles). If Bitcoin hits $10k, even $12k, we should expect some serious defaults in this space. I’ve had a rethink on Bitcoin and see it surviving, but just limping along and the rest of the “industry” gets smoked. Scratch that, I mean obliterated. I said what I said when Bitcoin hit $67k, (it topped out at 69) get out and stay out.

Nothing has changed here. If you are young and impressionable, any valuation is fine to sell even now. Forget about a recovery, get out and stay out. This industry is an ongoing train wreck and we are nowhere near bottom. Expect some bigger names to go broke as selling continues. This isn’t investing, it’s gambling and gambling is a big loser during hard times.

I’m hoping the Fed can lower rates from 3 to 3.5% early next year but this isn’t a lock. I think the dollar will negatively weigh in on the inflation narrative for 2023, but it’s too soon to say by how much. Out of time! Enjoy your week, everyone.

#98 Steven Rowlandson on 06.13.22 at 6:53 am

Knock a zero off the price of real estate and the price is just about affordable and still expensive.

#99 Mr. O’Brien on 06.13.22 at 7:17 am

Captain,

I don’t see a door to enter through on that Guelph $868k mini-barn.

I’ll beam you directly into the living quarters Sir.

#100 Froggy on 06.13.22 at 7:50 am

I hate to say it but there are many clues where this is heading and the comments on this blog’s comments can tell you alot it has completely changed it’s direction to being 50/50 on the path of the economy or realestate but now it’s very positive on both of them all going down way below the mean here let me give you more clues
6% fivers 9% inflation and all energy up by 30% l hope that helps and l think that that house will sell again in two years for 200,000 positively so prepare

#101 Don on 06.13.22 at 8:05 am

#95 DON In the UK, The Guardian warned on 2 June that arms sent to Ukraine by the US and its NATO allies have every chance of ending up in the hands of criminals, citing the head of Interpol Jürgen Stock. Another Guardian article insisted on 9 June that ending the Ukraine stand-off as soon as possible was “in the best interests of Ukraine and the West”. On 10 June, the media outlet pointed out that Ukrainian casualties are running at a rate of somewhere between a staggering 600 and 1,000 a day.

#102 James on 06.13.22 at 8:20 am

Garth, did you see this report? Looks like a ‘yikes!’ moment is happening for many recent homebuyers.

1 in 4 will have to sell (or desperately try to) if interest rates rise any more, according to a survey.

https://www.ctvnews.ca/business/real-estate/nearly-1-in-4-homeowners-would-have-to-sell-if-interest-rates-rise-more-survey-finds-1.5944137

#103 crowdedelevatorfartz on 06.13.22 at 8:26 am

@#94 Renters no more
“summer weekly rentals are drying up. Owners who have been receiving $3000.00/week cash from families who have been coming for many summers, are suddenly getting lots of cancellations, “Even repeat renters”.”

+++

Yep.
When people are talking about quitting their jobs because…….. they can’t afford to drive to work……

Something is seriously seriously wrong.

Even the 80’s recession didnt have grotesque gas prices we’re experiencing today..

We’re in uncharted territory with the average consumers’ mind set.

#104 YVR Renter on 06.13.22 at 8:29 am

#61 and 85-
I third this. Garth, you left out the key parts of Simcoe, Barrie, Orillia, and wildly weekender-infested Collingwood. Who cares about Adjala-whatever or Innisfil. Here in C-Town we have to put up with half of Toronto invading us every weekend and thinking they’re so busy and important they can speed down our streets and run us over in Loblaws and Curries Market. Let’s hear the dirt on how the sillies overpaid in February so they have bragging rights about their “ski chalet”.

#105 crowdedelevatorfartz on 06.13.22 at 8:32 am

@#90 Inequity
“The BC Non Binaries?”
+++
Not bad but I’m thinking along the line of something so bland, so inoffensive, so boring …..voters will barely notice.
Think like a pabulum eating politician.
The BC Peoples’ Party?
The BC Right Party?
Or just
The Party?

https://www.youtube.com/watch?v=GGkg5ytaXlA

#106 the hits keep coming on 06.13.22 at 9:16 am

In October 2021, Celsius raised $400m from WestCap & Caisse de dépôt et placement du Québec (CDPQ), Canada’s 2nd largest pension fund. I guess Quebec pensioners are not very happy losing +91% of their investment.

Did the pension fund release any statement about this loss? how were they allowed to invest in crypto? is someone going to go to jail for this?

in a bear market, everything gets washed out.
this is the end of crypto. good riddance

#107 millmech on 06.13.22 at 9:21 am

TD 4 year fixed 5.29%
TD 5 year fixed 5.64% special rate of 4.84%
I can see 6% fixed by the end of June, so with the stress test at 8% it looks like a 50% plus decline in the markets. There will be the possibility of 8%-10% mortgage rates by the end of August and better than 70% chance of that happening.

#108 OK, Doomer on 06.13.22 at 9:31 am

#102 James on 06.13.22 at 8:20 am
Garth, did you see this report? Looks like a ‘yikes!’ moment is happening for many recent homebuyers.

1 in 4 will have to sell (or desperately try to) if interest rates rise any more, according to a survey.

https://www.ctvnews.ca/business/real-estate/nearly-1-in-4-homeowners-would-have-to-sell-if-interest-rates-rise-more-survey-finds-1.5944137
++++++++++++++++++++++++++++++++

The scary part is left unsaid: History shows that a 10% homeowner hardship rate is the hurdle for 30% – 60% price cuts.

At 25% how do you even do the math on that one??

#109 DON on 06.13.22 at 9:58 am

#101 Don on 06.13.22 at 8:05 am
#95 DON In the UK, The Guardian warned on 2 June that arms sent to Ukraine by the US and its NATO allies have every chance of ending up in the hands of criminals, citing the head of Interpol Jürgen Stock. Another Guardian article insisted on 9 June that ending the Ukraine stand-off as soon as possible was “in the best interests of Ukraine and the West”. On 10 June, the media outlet pointed out that Ukrainian casualties are running at a rate of somewhere between a staggering 600 and 1,000 a day.

*********
Yes I did see Guardian articles.

#110 Tinpot⁷ Economist on 06.13.22 at 10:32 am

They just might stop, as the wealth effect evaporates.

75 is off the table.

#111 Don on 06.13.22 at 10:33 am

#96 Dave Was it you I saw the other day flying over my house?

I don’t call people like you financially astute. In what you wrote, you come out as an extremely risk-averse person, where frugality is your middle name. (nothing wrong in either)

You are my Polish neighbor, who never spent a dollar without checking both sides of it. Paid for a car in cash ( I told him that he would be spending today’s dollar for a pile of steel that depreciates, he was visibly upset)Mortgage-free NEVER ate out. His only vacation was to Cuba (30 times)m because it was cheap but always dreamt of riding the Baikal Siberian train t Russia. His greatest worry at 85, was losing his mind but died of a heart attack.

Enjoy your life while alive!

#112 Quintilian on 06.13.22 at 10:39 am

Naturally at some point the storm will clear, inflation will be subdued, unemployment rate edges up, some of the misallocations will be untwisted, and the miracle of a soft landing has materialized.(maybe)

Will the CB’s have forgotten the lesson, or will they succumb to political pressure and go back to create the illusion of prosperity propped up by debt once again?

If not the inflated asset prices, be it RE or stocks, will not return to bubble territory for a very long time.

#113 Dogs Not Barking on 06.13.22 at 10:42 am

#88 crowdedelevatorfartz on 06.12.22 at 11:17 pm
@#70 Reality is Expensive
“I can’t believe people are closing after taking $600,000 losses in 3 months.
I bet half of them are just walking and couldn’t care less about the consequences.”
+++
You can’t “just walk away”.
It a legal agreement.
So you have two choices.
Stay and take the house as is and the financial hit like the good little greaterfool that you are.
OR
“Just walk away” and lose the down payment, don’t get a house to live in , and, eventually, you WILL be successfully sued for the difference in price that the house eventually sells for.
An even bigger…… greater…..fool.
++++++++++++++++++++++++++++

Or you can take door #3; Bankruptcy.

At that point you walk away, regardless. There are really no consequences any more.

You’ve lost it all and it’s time to shift into trying to rebuild a future.

Your today is over. All that is left is tomorrow.

The worst choice. – Garth

#114 Bard Lamb on 06.13.22 at 10:44 am

Now is the best time to buy Toronto real estate.

Buy the dip. Bitcoin is falling, but that is a hodling opportunity to Buy the Dip!

There are not making enough land in Canada. Buy now!

#115 k on 06.13.22 at 10:51 am

Hey #105 Croudedelevatorfartz ! How about the …….wait for it………..THE B.C. FOGDUCKER PARTY. “We see the truth with unclouded vision and a clear view of the way forward ” Vote FOGDUCKER !

#116 Dave on 06.13.22 at 11:33 am

Ouch…Mister Market is not happy and Crypto is not getting slapped, it is not getting spanked…it has been sent to The Principals Office for the strap.

Our home room in Grade 7, back in 1970, had a door opening directly into the Principals inner office where you could here the corporal punishment being administered. The sounds of the poor kid getting beaten were horrifying but knowing if you did not stay in line you’d end up there too was a very strong deterrent.

#117 Dogs Not Barking on 06.13.22 at 11:40 am

Bankruptcy

The worst choice. – Garth

++++++++++++++++++

Not in all cases. I’ve seen the devastation of people trying to desperately hang on. The mental anguish and alcoholism that preceded bankruptcy was far worse.

Hitting the reset button comes at a price, but sometimes the cost has to be paid.

Just for clarity, if someone has the prospects/resources to weather the storm, of course do so. But not everyone does.

#118 Senator Bluto on 06.13.22 at 11:47 am

#115 k on 06.13.22 at 10:51 am
Hey #105 Croudedelevatorfartz ! How about the …….wait for it………..THE B.C. FOGDUCKER PARTY. “We see the truth with unclouded vision and a clear view of the way forward ” Vote FOGDUCKER !
+++++++++++++++++++++

Fogducker’s is my favorite coffee stop on the Island. Just as you drive into Campbell River. Just north of the 30 foot diameter glacial erratic boulder on the shore covered in graffiti that says “N*** the G** Whales!!” or some other seasonally changing nonsense :-)

#119 Sail Away on 06.13.22 at 11:53 am

A little gloomy around here. For some good news, see how Elon continues to impress:

Giga Berlin cranking:
https://www.teslarati.com/tesla-gigafactory-berlin-production-1000-vehicles-per-week/

Fremont factory hits daily production record:
https://www.msn.com/en-za/news/other/tesla-fremont-factory-produced-record-number-of-cars/ar-AAYphKJ?ocid=uxbndlbing

Starlink is already on airlines, and now moving onto cruise ships:
https://www.msn.com/en-us/travel/news/royal-caribbean-is-the-first-cruise-liner-to-request-elon-musks-starlink-satellite-internet-onboard-its-ships/ar-AAYp37G?ocid=uxbndlbing

#120 yvr_lurker on 06.13.22 at 12:02 pm

#86 Agreed.
I’m no socialist but when BC Liberal leader Falcon smiles that toothy grin….
He reminds me of a barracuda in a suit.

Terrific caricature. Lol. Falcon is the type of loud mouth shnook opportunist who will defend vigorously to the death relatively small errors/actions of the sitting Gov’t for his own gain. Loud, obnoxious, and ultimately completely untrustworthy. Hope the earth opens up and swallows him. I’d take Horgan and his gang any time.

#121 Faron on 06.13.22 at 12:05 pm

#118 Senator Bluto on 06.13.22 at 11:47 am

RE: FogDuckers

Agreed. Love that they have a driftwood fire going when the wx allows. Patrons are chatty. A true icon.

Out my way, Shirley Delicious is a must stop if you are headed to French Beach or points west. The most enthusiastic Saffa you will ever run across. Always brightened my day when the ocean delivered a skunking. Added to days when the surf was a major score. Great coffee, food and art in the old Chinese restaurant A-frame. Not sure what was there before then…

#122 Blobby on 06.13.22 at 12:11 pm

Wowzers! $870k is still a bit steep for a shed.

#123 Faron on 06.13.22 at 12:22 pm

DELETED

#124 Bitcoin price manipulation on 06.13.22 at 12:24 pm

The large drops in Bitcoin’s “market” price are mostly due to large holders cashing out. The increases are due to the same holders engaging in wash trades to try and keep up the price of their remaining holdings before selling those off further. The price of Bitcoin will zigzag over time to a fraction of today’s price, but will never go to zero for the simple reason that the whales will always keep reserving a portion of their holdings and engage in manipulation in the hope of reviving the mania. Wash trades do not cost anything; anyone can set up multiple accounts with a broker and pretend to trade at arms-length between these accounts, at artificial prices. At best each such fake trade costs a small fee, and even that can be avoided if you operate the broker – indeed, many “brokers” were started in the past for just this reason. It is amazing that this rat-infested scam has not been made illegal already a decade ago…

#125 bdwy on 06.13.22 at 12:40 pm

some fundamental happenings in crypto right now…

Major crypto exchanges celcius AND binance have halted transactions.

there is concern of celcius pulling a luna.

it could be a 100% loss for millions who hold (held?) their crypto there.

seems like the rest of the sillycoins will get there eventually anyway.

cowboy port of brk,oil and costco doing great today in context.

#126 KLNR on 06.13.22 at 1:04 pm

@#96 Dave on 06.13.22 at 6:40 am
Schadenfreude. I have lived within or below my means for years watching while others have gone ahead and purchased stuff to increase their social status using money they don’t have. Now it appears that the game is changing and in my own way I have schadenfreude towards these people.

you spend way too much time worrying about other people

#127 Don Guillermo on 06.13.22 at 1:27 pm

#91 the Jaguar on 06.12.22 at 11:39 pm
Made a new aquaintance today via the youtube channel. I’ve got a crush on this guy. He is Indian External Affairs Minister Jaishankar. Seriously, he is just too sensible for words.

https://www.youtube.com/watch?v=9KwXJ-jlY44
***************
Impressive.

#128 Mehling on 06.13.22 at 1:44 pm

“Nearly 1 in 4 homeowners would have to sell their home if interest rates rise more: survey”

Globe and Mail today – link is paywalled unfort.

https://www.theglobeandmail.com/business/article-nearly-1-in-4-homeowners-would-have-to-sell-their-home-if-interest/

#129 Philco on 06.13.22 at 2:13 pm

#112 Quintilian on 06.13.22 at 10:39 am

If not the inflated asset prices, be it RE or stocks, will not return to bubble territory for a very long time.
———————-
I agree. Don’t bother me a bit. Cheers

#130 the Jaguar on 06.13.22 at 2:51 pm

@127 DonG

Yes. I liked his style.
“Somewhere Europe has to grow out of the mindset that Europe’s problems are the world’s problems but the world’s problems are not Europe’s problems. That if it is you, it’s yours, if it is me it is ours. I see reflections of that,”…. (28:30 in the clip)
What a bulls-eye. Not your garden variety politician. Wish we had someone like him here in Canada.

#131 When Will They Raise Rates? on 06.13.22 at 10:50 pm

Another $1,500 drop in BTC and the buy orders I placed last year start getting filled. Woohoo!