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CC chk this out
http://www.mindjolt.com/games/realtor
I lost my arse playing this. Good thing I never tried it in real life. (grin)
A large portion of my social circle was extremely bearish even as soon as June/July. They have been completely sold on the message that everything has been magically cured.
Obviously you guys know a lot of this already but it needs to be said, how can you say that this is fixed when:
-nearly 1 out of 10 is out of work?
-our boy roubini is calling for much more downward pressure on US housing
http://finance.yahoo.com/news/Roubini-says-hous...
-The only reason that the market has gone up is because of the tax credits for buying new homes and cars which created artificial demand
-Even the Dallas Federal reserve President, Richard Fisher, did not sound optimistic about market direction (That economy is basically same size as Canada as a whole)
http://watch.bnn.ca/headline/october-2009/headl...
WHY AM I TALKING ABOUT THE USA YOU ASK?
.....because whether you like it or not, we are all essentially just another state. We may have different rules but we get impacted by anything that happens there and I agree with a couple of you that until we can build some infrastructure on the west coast to get to the asian countries with our resources, we will go down with the big ship :(
Yes, we are linked to the Titanic...tethered by our decades of inability to diversify to another trading partner. We are going down with them... but because our Loonie must stay lower than theirs we will print more and buy more of their greenbacks.
We're sort of...the best "state" of the United States if you want to think about it regarding housing. They lowered rates and stimulated in time to keep banks from failing here... also they capitalized banks even when things seemed "OK". We've been insulated from a huge real estate correction like the USA had. We will continue to be insulated now that the storm is blowing over, credit markets are moving again, and the world has started to consume commodities again (which we are very rich in).
Oil companies in Alberta will soon next year report "record profits".... because they will be enjoying a weakened Loonie (manufactured by Ottawa) as well as HIGH oil prices (due to worldwide demand, esp. from Asia).
Good luck if you are waiting for homes to fall in price here. Inflation is here and real.... in 1990 when my brother bought his home he paid about 300 ounces worth of gold for it. Today's price that he can sell his home for is... about 300 ounces of gold. Guess what.... homes are fairly priced if you use that metric. Paper money has lost value friends.
The buying spree is likely to continue, Korean government officials said in Seoul Thursday.
"KNOC is likely to acquire one more oil company within this year," Kim Jung-gwan, deputy minister at the Korean Ministry of Knowledge Economy, said in a news briefing.
"We expect both buying overseas oilfields and seeking M&As (mergers and acquisitions) will accelerate as we have secured the base in Calgary, Canada, the centre of North American oil development business," the Korean government statement said.
Your brother bought his house during a period of time when home valuations made sense. In fact, homes were undervalued between 1985 and 2001.
It's the folks who purchased during the last period of overvaluation ('76-'84) who didn't see a *single* cent of real return until over 20 years later.
Those same folks, using your metric, bought their homes for $210k ($700-$750/ounce) and would not see prices of gold reach those heights again until their recently born children were finished university.
When you talk of record profits for oil companies, you make it sound so easy that the BOC can weaken the loonie that easy. In order for the loonie to come down, we need to see some MAJOR strength in the US dollar. The only way that happens is if all of the world governments continue to buy US bonds & currency. The scariest part about that is its only going to be a temporary fix in my opinion. The states is going into debt only seen by the likes of zimbabwe. When it takes a $100 Billion US note to buy 4 eggs, the only thing that will save the world is Arnold in 2016! :)
There are 3 videos in the series if you are interested. Talks of gold prices running par with the DJIA at some level. Possibly about $4000.
http://video.google.ca/videosearch?q=hyperinfla...
I am not a conspiracy theory kind of person but this is a very informative movie. Like it or not, check out the facts and they are true. You would be naive to think that politicians are all in it for you.
http://video.google.ca/videosearch?q=hyperinfla...
Can you say TAXPAYER BAILOUT boys and girls ???
Boy am I glad that the bulk of my money is out of the cuntry.........the spelling is deliberate.
Basically though, Canada is FORCED to try and position the Loonie to lose value in the future. If we do not do this, there will be massive job losses as our exporters go out of business. Canada needs to buy time in order to build physical infrastructure and diplomatic trade deals with the Asian economies. We need a weaker Loonie so we can continue to have jobs that export goods to the USA. Or we can all sit on our hands with our high Loonies and "wait it out" until we can trade more with Asia. For some reason, I don't think massive unemployment is the path our government will choose.
Look for the dreaded Quantitative Easing to appear... with a made-in-Canada maple-leaf of course. Some may argue that this recent CMHC move is a stepping stone to this.
So, instead of paying 39% combined federal and provincial taxes (well, it is really more like 42% with EI and CPP added on top) I only pay 15% down there to the Receita Federal on my income from the bonds.........but I have to pay the regular rates up here in Canada on any income I earned here to the CRA, if I was working right now, which I am not.
Funny that we have already been screwed ON DAY ONE by virtue of the CMHC antics, and the US is up in arms about the taxpayer bailout of Fannie May and Freddie Mac, as well as the soon to be bailed out FHA.......whereas Canucks are still in sleepy hollow about the impending doom we face.
- People need wood to build or burn
- People need oil for cars, electricity generation, by-products (plastics, etc)
- People need water to drink
- People need gold, silver, diamonds, ore, coal, etc
- People need food to eat (beef, grain, veg, staples)
As long as people need the basics to live, Canada will have demand for it's raw goods and that is what Canada's strenght is, not manufacturing.
Mike
Hey, I did a "how much could I afford" calculator and with 5% down, 35 year am at PCF, I can get a $1,034,000 mortgage! No talk about how much interest that is over 35 years, but that's ok right?
Mike
http://albertarealestatewatch.blogspot.com/2009...
Well, with $100K down, it says we can afford an $800K mortgage over 35 years......that is with a $140K combined income and I was only using 50% of what I historically earned, as that is what everyone in my industry is currently making right now........50% of what they did in the last 5 years.
There is no way in hell I'd ever do that.........put either the $100K down, or even think about buying real estate here.
Mike
Mike
Mike, I did not forget Canada is a commodity nation. I AM talking about exports of COMMODITIES... if you did some research you would notice that our infrastructure for exporting commodities is far too connected with the USA. We do not have the ability like Australia to send product to Asia with ease. Perhaps with time we will. As for now we MUST keep my Loonie low as possible compared to the USA since we need to sell in USD our commodities to the USA. Get it?
But, if you look at the best of the worst. I would rather be in a commodity nation that a retail, financial or service nation. Canada is strong because of this. We just need to refine our raw materials to get more value out of them.
I wouldn't worry (too much) about the USD vs CDN side, the WON or YEN vs the CDN side I'd worry about as those 2 will be buying our goods now vs the USA.
Mike
Mike
Einhorn bets on major currency \'death spiral\'
Now it seems that similar problems are surfacing with dry wall produced by an Albertan company.
http://www.ecohomemagazine.com/news/2009/april/....
Same stuff used in new homes here? I don't know but am glad I park my boots in what would be called a retro house if I lived in town.
http://www.hadd.com/node/1435
"We believe Georgia-Pacific manufactures its own drywall but uses coal fly ash in its content."
Ruse denied that Georgia-Pacific used "fly ash" in its processing. Fly ash is a byproduct produced when coal is burned to generate electricity. The New York Times reported in December that a 2007 Environmental Protection Agency study found that the ash contains significant amounts of carcinogens.
Ruse said Georgia-Pacific uses natural gypsum rock and synthetic gypsum in its wallboard. The synthetic gypsum "is a byproduct of coal-burning utilities that scrub their exhaust to remove sulfur and sulfate," she added."
"83 Nostradamus jr. on 10.19.09 at 6:30 pm Expect Canada to follow this….
“”Last Friday, the Brazilian Government denied allegations that it would impose a new tax on foreign fixed income investments and equities, in hopes of cooling off its surging currency and speculation in its markets.
But today comes word that the government will do just that.
Bloomberg: “Brazil will impose taxes on purchases by foreign investors of real-denominated, fixed-income securities and on purchases of stocks, Finance Minister Guido Mantega said today. The measures are being taken ‘to avoid an excess speculation in the stock market and in capital markets,’ he told reporters in Sao Paulo.” “”
You have that Brazil GIC right?
Mike
Cry "foul" all you want, but this is the way things are headed. You are either catching the wave, or you are missing the wave. Sticking to your principles, no matter how economically correct they are, may be your downfall. How is squids doing anyhow?
The tax is 2% on future purchases of Real denominated securities.....we bought our bonds a long time ago. But if I continue to roll over the interest, which I will, it means that I will pay an additional R$850 or so ($500 USD) in additional taxes, once only, at the time of purchase.
Entao, descansar gente.
Would you rather earn a 13% return and pay 15% tax on it over the next 5-6-7 years, even with a 2% up front one time fee on new investment......or a 1.75% to 2% return and pay 39% tax on it here in Canada.....
Yawn.
As of October 31, 2008, the New Brunswick Credit Union Deposit Insurance Corporation guarantees the repayment of eligible deposits with New Brunswick credit unions, including accrued interest, up to $250,000. Repayment is not affected by a credit union changing its name, amalgamating, or entering into similar types of arrangements.
Does the Government of New Brunswick also cover deposits?
According to the Credit Unions Act, the Government of New Brunswick may provide assistance so the Corporation’s obligation to the depositors is carried out.
Is this guarantee the same as the banks' $100,000 insurance?
Deposit insurance offered by NBCUDIC covers up to $250,000 in eligible deposit accounts, while the same accounts in banks and trust companies are only covered up to $100,000.
http://www.assurance-nb.ca/FAQs-e.asp
So...Can the Alberta Government(if they choose) pass the same act and revoke the 100% deposit Insurance on Credit Unions here.
They guarantee ATB deposits.
From reading this I am wondering what exactly the gov. role would be if there was a credit union failure. The way I read this is if the Credit Union Deposit Guarantee Corporation would be short funds the Gov would ensure that the difference required to meet the 100% guarantee would be met.
If I have it wrong how can the alberta government assure the funds would be payable if they weren't intending to use gov dollars to make it so.
The Credit Union Deposit Guarantee Corporation guarantees the repayment of all deposits with Alberta credit unions, including accrued interest. Additionally, the Credit Union Act provides that the Government of Alberta will ensure that this obligation of the Corporation is carried out.
Level Three:
The Government of Alberta ensures that the Credit Union Deposit Guarantee Corporation's obligation to depositors will be carried out.
http://www.cudgc.ab.ca/guarantee.html
Looks like we taxpayers are on the hook for eveything........they do use kinda ambigous language though.
Ottawa, provinces in for huge deficits: TD
you are one of the most sensible poster on here, you provide nothing but relevant info and links, I have always like and anticipate your next postings, keep on spreading the words.
Homes: About to get much cheaper
The nation's biggest metro area, New York City, will underperform the nation as a whole over the next two years, according to Fiserv. Prices, which have already fallen 21.7% to a median of $375,000, are expected to fall 17.4% by June 2011.
Home values in the nation's second largest city, Los Angeles, have fallen 43.3% since June 2006 to a median of $313,000. They are expected to dive another 20.2% over by June 2010, and then start to climb in 2011. Chicago prices, which have fallen 25.2% to $227,000, will drop only 4.1% over the next 12 months and then starting to climb.
The Detroit metro area now has the dubious distinction of having the lowest home prices in the country. Prices have dropped 51.7% to a median of $50,000.
They're expected to fall another 9.1% and then stabilize.
These are some of the bigest metro area/cites in the states with the population over 10x the size of any AB and Sask cities and having many mega rich people living there, yet the prices lower than here after a decline of 20-50+% in the last couple of years and still expecting to keep on dropping.
what makes people in AB/Sask think that our real estate should be higher and continue to go up higher than these Mega cites with Mega Rich people?
oh I know it's the land, we are running out of land right? yes New york Metro area alone is only 6x/18x more populated than the whole province of AB/Sask so yes we are running out of land in AB/Sask.
How delusional are some of these people here, hurry buy now at bubble prices with histroical low interest rate so you can be in debt forever, Real Estate Agents and Bankers are running out of idiots, give them a call, be the next.
I know very little about how the financial system works but the more I know the more frighten I am.
http://www.rollingstone.com/politics/story/3048...
Hmmm, looks like the good times are rolling again. Some people never learn. The monster called Wall Street rears its ugly head again. $100 oil for Christmas. What a friggin present. I wonder what wonder-boy Obama is thinking now after giving all of Main Street's money to Wall Street to gamble and speculate. And speculation has begun in earnest.
The BOC will have to print CAD and buy up USD to lower our Loonie. This is again because we cannot trade with Asia easily and must sell pretty much everything in USD's. Those who cannot lock in at today's rates will likely have increased yearly income due to the increased supply of money floating around a few years from now. With commodity prices rising (due to international demand), and our Loonie being kept low vs. USA... the companies here (especially OIL companies) will report record profits. They will be hiring more people, giving raises, and awarding bonuses (all in devalued CAD$). We will "get richer" on paper with our rising home prices.... but our nation will be "poorer" based on what international goods our money will buy.
Today on CBC, the BOC head talked about the high Loonie, and the dangers of it. He made valid arguments about Australia vs. Canada, especially about our trading differences (China vs USA). Looks like we may see Canada printing money in the future and buying up USD's in order to lower our Loonie. This will happen until we find a way to trade significantly with Asia.
So who cares if rates by the BOC will rise over the next few years (is there any other way they can go?!)...this will be all offset by the increase in money supply.
Looking for some personal advice here. Want to hear from the analytical minds on this blog. Let's say that family circumstances change that seriously forces one to consider getting a house. Let's say that income is high and guaranteed so no worries there. What advice do you offer if someone has to buy in the near term (now to early spring)? Does it make sense to buy something small and on a decent price scale to protect oneself from the coming tsunami and to be better able to pay down the principal faster based on the low mortgage rate or is it better to wait?
If that not possible -rent.
Also if you expect the price drops to be significant low interest rates won't make that much of a difference. One could rationally overpay about 10% on a property due to low interest rates. If we are due for a crash they are not helpful.
I am assuming that you will have to look after an elderly or infirm relative, as there is absolutely no other valid or sympathetic family circumstance that I can personally think of which would make me want to go into massive debt and personal risk during a housing bubble. I and my sister were raised from birth to adulthood in rental accomodation......so hormones are not an excuse.
why buy if you don't have to when you and most people with any brain know that we are in a gigantic housing bubble.
at the peak of the US housing bubble they were at 5.1x income and we are now at 7.4x income, it's a very scary number, and you know how great it worked out in the US.
at 7.4x income in Canada right now, how do you think it would end up for us? I'm sure you are smart enough to do the math yourself.
Just because you can afford to buy at 2x, 3x or what ever the multiple is compare to your income, why buy at all, just like why would you buy a Ford Focus for $50k when it's normally only about half the price, even if you can afford it, why not wait until you know that Ford Focus is at a reasonable price?
Nobody need to buy a house that bad that they should risk financial ruin over.
why not save some money by renting until you know prices are reasonable compare to historical average housing/income ratio, that day will come, have patience.
http://www.demographia.com/dhi.pdf
Hamilton is moderately unaffordable at 4.0x
St. Johns is affordable at 3.0x
may be I'm just crazy for wanting to live with less financial stress.
Today Harvest Energy was bought out by the Korean government. Not only that, they are announcing they are in talks with another 5 companies and likely will overpay for them just like they did with Harvest Energy. The foreigners are tripping over each other getting a piece of the Alberta oil-pie.
"So your brother's home was worth $120k in 1990 ($400CDN/ounce) and $120k in 2001? ($400 CDN/ounce)
Your brother bought his house during a period of time when home valuations made sense. In fact, homes were undervalued between 1985 and 2001.
It's the folks who purchased during the last period of overvaluation ('76-'84) who didn't see a *single* cent of real return until over 20 years later.
Those same folks, using your metric, bought their homes for $210k ($700-$750/ounce) and would not see prices of gold reach those heights again until their recently born children were finished university."
CM, you need to comprehend things more carefully. Using the same metric today my brother can sell his home for about 315k... priced in TODAYS gold prices it buys roughly 300 ounces of gold. So, tell me.... how is his home overpriced?
Deny and swim against the grain all you want... hope and wish for some sanity... but at the end of the day you could be fooling only yourself and clouding your judgement of what reality we are in.
Speaking of precious metals, Kevin has written up an article on the topic recently on his blog...
http://edmontonhousingbust.blogspot.com/2009/10...
For anyone that might be interested.
the rest is electronic so they can print from here to eternity and have only marginal effects
gold no doubt will rise against the USD but should always be priced in CAD your common currency unless you plan on buying stateside
as far as an korean company buying a junior energy company
big deal..it just shows that theres no interest here
Also, you are arguing about gold being priced in USD. I am talking strictly about how many ounces your CAD$ priced home can buy in CAD$. Gold has gone up in CAD$ too ya know.
I admire your steadfastness. However, there's a fine line between being steadfast in your beliefs or being stubborn.
they over paid to get their foot into the north american market
USD is down 15% yoy
CAD is up 5% yoy
oil is down 30% yoy
nat gas is down 40% yoy
gold is up 15% yoy
am i stubborn or have i been correct ?
Go to the local grocery store and try to prove to yourself that the food is cheaper. Meat, produce, etc are all more pricey and they are not coming back down. The essentials are going up in price since more people in the world are developing quickly and their standards of living are rising. The temporary deflation numbers you see are just that...temporary. Just because a bluray player now costs 50 bucks less does not mean anything significant....but if you tell me that chicken breasts are deflating in price across the board then THAT will change my mind.
The Koreans, and soon to be more asian countries with HIGH savings, did indeed get their foot into the north american market. And soon the other foot will follow, and the rest of the body. Why don't you get this either? You'll see more headlines about China, Korea, etc investing money into Alberta and taking assets that they see as having tremendous value. Where money flows in, JOBS will follow.
The only time you were correct was when I was correct...this was during the real estate deflation in Calgary from July 2007 till April 2009. However, those who have followed what you've been saying since April 2009 are likely pissed. Not only did they continue to rent, they also kept all their savings in "cash". Since April 2009 home prices have not fallen, they've paid more months worth of rent, and now the "cash" they have saved is worth a pretty penny less. You cautioned them against investing in ANYTHING but "cash".... had they NOT listened to you, they would have preserved or grew their wealth and bought commodity type investments OR gained some equity in a home they are living in anyways.
Bloggers here can say I'm a "turncoat" or say that I "pulled a Radley", etc. But there is a difference between being steadfast and being stubborn. I prefer not to be stubborn and to accept the new situation we are in. Even your beloved Garth Turner can do this.
your looking through your microscope again
look at the big picture
stock markets are still down 30%
oil is down
nat gas is down
copper is down
everything is down except for the necessities of life
house prices are being temporarily propped up by the taxpayer
i honestly believed that gold would have risen a lot more than it did....its been lame
The Capmark Financial Group has just filed for bankruptcy protecton and CIT is next
we are about to enter another major financial crisis and i DO expect gold to go higher
if the US welfares more stimulous expect gold to rise accordingly
quit being so touchy and relax
no one can time crashes because no one knows what the government might do next
by the way
calgary house prices per sq ft
2007 – $311
2008 – $297
2009 – $279 <– year to date
so much for increasing home prices
its called deflation
Yearly averages cannot show trends as they occur within years.
In 2007 price per sq ft peaked mid year around $330. This priced decreased throughout 2008 and bottomed at $269 Jan 2009 and has increased back above $300 now.
But you already knew that.
http://www.findcalgary.ca/listings?pathway=127&...
Hasn't the big picture been deleveraging, credit tightening, and deflation? Printing dollars in and of itself is not inflation.
Liquidity thrown at banks has been staggering. CNBC had Art Cashin on last Thurs who commented that 2 years ago, banks had $1.2 Billion in reserves. Last year they had $2.5 Billion in reserves. This year.... a staggering $824 Billion in reserves.
You can throw all the liquidity at the banks and print all the fiat you want, nothing changes if banks don't lend, people don't qualify, or desire for credit subsides.
We are in a huge deflationary period that no one wants to talk about because 90% of the world relies on credit. If deflation continues, credit will tighten further and CPI and PPI will fall harder.
I think gold will continue its emotional ride, could go higher, could go lower. House prices, though, have to fall because credit terms cannot get any better and qualifications for buyers are tightening on behalf of the banks' aversion to risk.
Buying a house because YOU THINK inflation will come is one thing. Buying a house post bubble IN THE MIDDLE of a deflationary period is quite another.
->
"Good luck if you are waiting for homes to fall in price here. Inflation is here and real.... in 1990 when my brother bought his home he paid about 300 ounces worth of gold for it. Today's price that he can sell his home for is... about 300 ounces of gold. Guess what.... homes are fairly priced if you use that metric. Paper money has lost value friends."
========================================
Your argument is pure hogwash!! It is all about affordability and nothing else!! Have we seen building materials double or triple in price?? NO!! Have we seen wages for contractors double or triple in price?? NO!!! So where is the inflation coming from?? For your argument to be viable we would have to have seen the cost of materials and labour double or triple in price, there has been none of that, in fact, prices have come down from the peak commodity levels that copper and other items hit last summer plus labour has also become significantly cheaper than it has been over the last 5 or 6 years during the peak of the boom.
It is once again, all about affordability and the only thing that is driving affordability at these levels are the historically low, heavily manipulated interest rates which will eventually go significantly higher!!
What do you think is going to happen when interest rates or mortgage rates start heading up as Canada tries to get lenders to cover their ballooning Federal debt? The buyers will be there one day and gone the next. What do you think will happen to the price of housing at that point? They will go into a deflationary spiral as the false housing market fueled by historically cheap credit will be gone!! This can happen even at a time of price inflation in other goods.
Once again, ITS ALL ABOUT AFFORDABILITY and I do not see wages going up, in fact all I have been hearing in the media is about wage freezes, rollbacks or layoffs. That is NOT Inflationary!!
My thoughts exactly.
For almost two years builders have been laying off construction workers and halting projects despite prices not falling back to pre-boom levels. One would think if hordes of idiot buyers are willing to shell out 2 or 3 times what homes are "worth" because of low interest rates the builders would be taking advantage of the situation. Instead starts and units under construction remain at depressed levels.
I organize private investors for one of the largest homebuilding companies in Alberta. They are currently building in approximately 40 communities across the province (both single and multifamily) and have sold 20% more homes this year than they did all of last year and are only off about 20% from their 2007 peak.
I would say that running at 80% of peak capacity in recent years is a far cry from depressed.
For example SFH starts August YTD for Edmonton CMA
2007 5608
2008 1729
2009 1764
http://www.cmhc-schl.gc.ca/odpub/esub/64171/641...
http://www.cmhc-schl.gc.ca/odpub/esub/64171/641...
I wouldn't be surprised if things are turning around now as building has become more competitive vs. resale.
I guess we must be suffering from a whole lot more inflation than the US after all, they have only flooded their market with how many Trillions of dollars this year plus have seen their dollar tank realtive to all other currencies.
While it may be tempting to compare averages or worse, a sample size of 1 in two entirely different markets, it is not logical to then offer this as an indication of a massive inflation differential.
While the average house price in the US is dramatically lower than that of the Canadian market, this is a function of many things including exchange rates (of which inflation is a component), replacement costs (many US homes are cheaply made compared to Canadian homes, e.g. basements, insulation) and most importantly, the supply and demand characteristics of localized markets.
Local market conditions notwithstanding, the replacement cost of a 3,000 sf house in the US is around USD $450,000 ($150 psf)and the replacement cost of a 900 sf house Calgary is USD $200,000 ($200 psf, $1.10 exch.).
The rest of the price differential is explained by differences in local market conditions. For example, both houses valued at USD $300,000 mirrors the 30% market correction in the US and the extreme shortage of entry level housing in Calgary which are occuring simultaneously.jonathan
LOL.......funny game......I lost my ass as well. Only the "realtot" wins. And they've got your best interests at heart.
There is no point to making any argument here. They denial level on this board is just disgusting. Even with prices up, sales up, and inventories down... the posters on this board decide to pretend nothing happened. Secretly some of them are likely kicking themselves for renting. They'll buy when they think the time is right and, as you say, "pull a Radley".
No smart or valid argument can be made here regarding anything bullish for Calgary RE. You'll have your head handed to you by the rent n' save crowd. They cheer on all comments, no matter how stupid, as long as you end it with "...and that's why Calgary real estate prices will crash!".
Take it from one educated man to another... stop posting here, your comments are better left for the more intellectual reader.
Jsan:
Your "deflationary spiral" theory is wrong in so many ways it'll take days to write a reply to that failed posting. Just ask yourself if China is going to stop anytime soon.
As far as China goes, oh yes, China will pull the world from the Depression it currently is in.....or so the theories go. China's economic numbers are generally accepted as being over inflated by a communist government that is hell bent on proving to the world that their system is superior to the evil capitalist systems. You do realize that China spent 600 Billion dollars of stimulus to get their economy moving again right? That is a hell of allot of money when you consider that the average Chinese factory worker earns a fraction of what someone in the West earns. Are you expecting China to continue spending this stimulus or do you believe that China's largest trading partners, who are all seeing record unemployment levels and record breaking debt, will miraculously bounce back to the gluttonous consumer spending that fueled their economies over the last decade?
BTW, we will see a release of the latest US GDP numbers and everyone will stand and cheer as they will more than likely look improved. It is amazing how well you can make those numbers look when you spend a few Trillion dollars worth of borrowed or printed money and pay your citizens to buy cars and houses. Just as Canada's economic numbers look better after the government spent Billions and Billions on stimulus.
=====================================
Give us an argument, the problem is the pro Bubble side never does. I am on the fence regarding Inflation vs Deflation. Both sides give good arguments. House prices usually go up in value during an inflationary period, however, when they are already at historically high income to mortgage levels, how in the world could they go up while mortgage rates also head to the moon? I believe that even during a period of high inflation, Real Estate would take a beating because there is NO WAY that an average family could swing a 400,000 dollar plus mortgage at 10, 15 or even 20% mortgage rates as were once seen during the last period of high inflation. ESPECIALLY during a period of Hyper Inflation where all of their household costs would be going through the roof.
Do you think if the BOC governor actually thought our economy was getting stronger and would continue to keep getting stronger on it's own that he would be saying that he will be keeping interest rates at these historically low levels till at least next June? NO WAY!! It has been said by many economists that these levels are "Emergency" levels and you would not ever see them this low during normal economic periods.
are you the same poster that called posters here nutballs and tin foil hat wearing conspiracy wackos when they correctly stated that the stock market would fall 50% ?
its still down 30% and will fall below 5,000 in the future
or were you the guy that called posters here basement dwelling momma's boy for stating that oil would go back to $30 bbl ?
so your the smart educated one eh !
heres a question for you smart boy
what happens when the BOC raises interest rates from 00.25%
to 5% ?
it aint rocket science
Everyone has cut up your points (if you had any) pretty well here. Let's ask you a "simple" question. If you were to borrow thousands & hundreds of thousands of dollars. Do you think that you would ever have to pay it back? Do you think in the mean time you would have to pay at least the interest? Do you know what the interest is on 12 trillion dollars (for USA) and 492 Billion (For CAN). Did you know that the federal reserve in the US is a privately owned corporation? When we speak about historically low interest rates, this is not just for the common folk, this is for the government! And they get just as screwed as consumers do when the interest rates go back up!!
Even if the base lending rate goes up to 1% in the US:
thats 120 BILLION a year in INTEREST!!!
Approx $365/person per year just in interest payments
What does that mean?? Taxes up the ass for everyone. Worst part is that no one has the money now, what will they do then??
I think this is exactly what "worldclass" was trying to get at.
Jsan, I am not going to "give you an argument" I think there have been many great ones by that poster "worldclass", some I don't necessarily agree fully with but most of his/her points are really good. Keep wishing for deflation, I will be too. Anything that makes our money go further is good! But this ain't gonna happen like that. Home prices will go up to who knows what...so will meat, dairy, veggies, etc etc. Not Weimar republic wheelbarrow full of loonies ...but you'll see and wish you didn't shove all that "cash" in a savings or your mattress.
Taxes are going up (HST anyone?), Canada's debt is raising, unemployment is very high, the USA (our biggest trading partner) is in an awful economic state, then Canadian mortgage rates have been raising for the past 4 weeks now (HSBC 5 yr up now to 5.8%).
...and that's why Calgary real estate prices will crash.
Because in the end, it's only affordable if the borrower can afford it.
I couldn't agree with you more, it's all about affordability, like i said before the state of the economy is important but in the end it comes down to affordability, it always has and it always will, and that goes for anything, cars, food, houses, clothes, even sex.
People in Alberta love to talk about oil but wasn't oil at $147 in 2008 while the Alberta economy was red hot, yet real estate was falling?
a lot of people who have vested interest in real estate would like to talk about the economy that drive the market because it's crappy now so which mean that when the economy recovers prices can start to increase from then to infinity again.
AFFORDABILITY? who cares about it as long as the economy is good and you have a $12/hour, you too can afford that $500k dream home.
You can now add that to any of your CDN savings and investments.
I love it when people show up on blogs claiming to be educated and then provide absolutely no evidence to back up the claim. BTW, stating that worldclass has already made your argument for you is the easy way out. Please share some of your vast knowledge with us. Also, if you could let us know what your field of expertise is, it would be helpful. My guess is you are a realtor or a mortgage broker. If you are a realtor or a mortgage broker, it makes me wonder how educated you really are. I am in my 7th year of school, but I am not here claiming to be more intelligent than anyone else on this board. When you make such claims you have to back it up man.
Possibly grade seven...
Or maybe seventh year of grad school...
Whatever it may be it is complete bunk!
People with grade 12+ are successful business leaders (Jim Patteson, Virgin records guy etc.). Their expertise trumphs that of many academics as they "live the fundamentals", not just "theorize the fundamentals."
P.S. How do you propose you will verify your claim of your education as you are requesting of successfulguy? It doesn't matter either way as everyone on this blog is "disguised" behind artificial identifiers anyhow? ERRONEOUS!
Nice try Dr_Sirius
Remember that you are still in school "theorizing the fundamentals" whatever they may be and not in the real world "living the fundamentals" yet.
Good day fellow blogger.
http://money.ca.msn.com/investing/news/breaking...
Looks like the europeans have got it right. They are breaking up banks left right and centre there.
The townouse I went to see located at Glasgow AFB was nice and clean, in fact, all of the units there which are all owner occupied were in excellent condition. Boeing owns the old SAC base and uses it for the tax free delivery of new aircraft as well as testing. Weather wise, it is no different really than living here in Calgary, except for the lack of chinooks. And the folks everywhere there are
real nice........I could live there. Seriously........it would be a cool place to get away for a week or two a couple of times year.
Gotta decide if the carrying costs are worth it in the long run......asking price on the unit is $20K.....there is no upside potential at all, so it'd have to be a keeper until I died. If I can steal it for $15-17K.......
Are there golf courses nearby? How's the scenery?
Scenery wise you've got a nice lake and a river close by, with terrain sorta like the Drumheller area........flat for miles with a few small ridges.
"Take it from one educated man to another... stop posting here, your comments are better left for the more intellectual reader."
Please read my post again and realize that I am saying the same thing as you Dr soooo Serious. I don't think education has anything to do with success. I have taken a lot of formal education and there are many things that I know very little about. Successsful guy's comment on education and intellectual ability are elitist and should have warranted the same response you made to my comment. I agree with you that many of the most successful people in this world have no formal education. Many of the successful business people I have encountered do not have an MBA....you catch my drift? As far as medicine goes........the formal education is required, and I'm sure you are not going to question that. As far as real estate and the economy goes, I have very little experience and come to this blog for information. I'll be honest, realtors annoy me. Their costs, their billboards, the constant junk mail....etc. It's just something I have to work on, so don't get offended. Good luck with your sales man.
Since they have no good arguments about why real estate is not in a bubble, they turn to insulting people, calling names, threats, spamming, even picking on grammar and spelling, or pick at anything they can pick at like in your case, and using multiple names in doing it, just ask CC or squidly.
This is what you can expect from them, the best thing to do is just ignore them, like the BS billboards and junk mail,
most people here get what you are trying to say so no need to explain to us, we are glad you are here and keep on expressing your opinions.
"It's just something [he] has to work on, so don't get offended. Good luck with your sales man."
Intensivists don't make sales man...Assumptions are another something you will have to work on.
Good luck!
In my almost 30 years of working I too have seen many a person with numerous pieces of paper from various institutions of higher learning, who do not have the ability to rationalize even the simplest scenarios outside of their box.
Welcome to the "Bubble Blog"......stick around and take part in the conversation !!
It is the funniest 4 minutes fo your life, these ran on late night TV for about a year and the guy made a killing selling his courses. Don't know about his customers though.......
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http://mam.econoday.com/byshoweventfull.asp?fid...
It's been going up and down since May. It was getting better in May, then worse in June, better in July, then worse in Aug, then better in Sept, now worse in Oct. So what, overall it's just flat, the good news is retail sales are trending up even though they are still below 80.
Personally i think the only reason they show growth is because of borrowed money but to each their own
http://www.theglobeandmail.com/report-on-busine...
A good test is going to be India, they announced they are ending stimulus
http://www.theaustralian.news.com.au/business/s...
Mike
Here I found you a better deal. You can 4 for the price of 1. Fixer uppers though.
http://www.northwest-national.com/20-749.htm
You must be pretty busy these days with the H1N1. Thanks for making time for the board. Seriously though, what makes you think house prices have anywhere to go but down? Did you invest in a couple condos? Are you in Calgary or Edmonton? The reason I started looking at these blogs was because another student in my class put down money on a very expensive new condo in Edmonton. He was trying to get myself and one other student to consider it. I think it was around 460K or so for 2 bedrooms. They are very nice condos here in Edmonton, but that just seemed too expensive. Anyway, his plan is to sell the condo after residency and pay off all of his student loans/line of credit with the increase. He took out a big chunk of change from the LOC for the downpayment. You know how easy the banks throw money at professional students. To make a long story short, he is still the only one to take the plunge. Another girl in my class is close. Her mother thinks it is a great time to buy. I told her that I don't think it is. There are actually a few of us reading blogs right now and most of us believe we will get a better price in a couple of years when we are finished with school. Do you think this assumption is crazy? Remember I am not very good with assumptions.
Good luck at the hospital.......if you want to shed some light on where you think that is going and the possible fallout for the economy, I would appreciate that too.
Interesting story you got there......please allow me to add to it.
One of my friends, he's a doctor, and his wife is a physiotherpist (as is my wife) sold his zero lot line carboard shit shack here in Calgary for $500K back in early 2008, and moved to the US (Arizona) this year for a better paying job (2X the salary paid in USD).
He was sweating bullets for the 6 months it took to sell, as he was tapped out on his unsecured credit line here (the banks apparently love to give money to doctors with no assets, but huge incomes) and saw the RE market coming unglued. Talk about a walking time bomb stress wise. Luckily he got a greater fool and walked away with $175K of equity after Re fees, commissions and mortgage debt, which allowed him to pay off his credit line in full, leaving him broke, with absolutely no cash, but he still has his $200K unsecured credit line to draw from. He has been using that to live......andhas nothing to show for it either, drives 2 leased cars and has nice furniture and big screen TV's with lots of holidays for the family.
He's renting in Arizona for $750 a month, told me the other day that he was lucky to have learnt from this experience (I disagree as he had no cash left in his pockets to speak of after selling his place and paying off debt, but didn't say anything to him) and that he was not going to buy in Arizona, as he thinks prices there are still going to fall and their RE market is a mess. He's only got 3 mor eyears nhish contract anyways as well. Told me about entire subdivisions of empty houses with overgrown grass for sale....etc.....
Here are the Facts:
- we lived in a modest home in Country Hills when all the craziness happen, and everyone was talking about their newly acquired paper wealth. It was the everyday topic at work, on the street corner, in line at the grocery store..
- jumped on the wagon and bought a condo in 2006 in SW Calgary, took possession in fall of 2007
- paid 280,000 with 20% down for 870 sq.ft. 1 bdrm + den
- it was supposed to be our first ever “investment”; we said we will either hold it a few years for our teenage kid, or sell it for a profit.
- prices of the condos in the complex started falling soon (2008)
- we are now at a loss! (between 10 and 15%)
- we do have a 5-year closed mortgage @ 3.75% (re-mortgaged this year to take advantage of the historically low rates)
In 2008, when we realized we COULD be VULNERABLE (although our combined income at the time was approx. 160,000, we though “what if one of us will lose the job?”), we sold our house and decided to rent instead. I remember we were so scared to owe $600,000 combined! (we are from Europe “DP’s” Delayed Pioneers with ESL, and not used to what happened here, but that’s another story..). And boy! were we ever right, when last month I lost my job and I am now on EI!
So, now we are renters and landlords at the same time!!! (don’t ask why, but if you do.. we rent a VERY NICE 1600 sq.ft. double garage townhouse in SW, more than we need, for a mere 1500/month, now 1,400). 1 min walking distance from our kid’s school..
Yesterday, our tenants informed us that they plan to move, so we are frantically evaluating the options: leave a better degree of comfort and move to live in our “investment”? or, find new tenants. By the way, we have reduced their rent with 10% (voluntarily!) a few months ago, just to prevent them from leaving (they are such a nice family). Unfortunately, the young mother wants to get a part-time job, but the place is rather isolated and the husband takes only car to work, etc. Bottom line, she needs to be closer to LRT, shopping centres.
We’re have to start posting ads on the free websites like kijiji and Calgary craigslist (do you know of any others?) to find good tenants, so we can … continue renting the place we have. Ironic? Surely, interesting..
If you ask me if I believe we’re going to see another bubble, I surely wont know what to say. While all the common sense, decency and oral principles tell me that’s not possible, I am amazed by the level of greed and almost cheating surrounding us. Clients used to call my ex-company and ask for product x, which we would then buy from “another company three block down”, mark it up 50% and resell it to poor guy (instead of telling him “look, we don’t sell/stock that, go three block down the street to company X”). I never liked that practice!!!
We deserve what we got!
Thanks for sharing your story, I'm sure you're not the only one in such a situation right now.
I often check the data on www.rentfaster.ca (a website I would recommend you post your rental on). Since summer, I've noticed the listings have increased quite a bit, and the median price for rentals has dropped by about 8%.
In the past month or so, I've noticed the 'one month free', 'rent reduced', 'move in bonus' and 'discount for one year lease' taglines starting to appear frequently in a lot of the ads.
Here's a search query on RentFaster.ca for every 1-2 bedroom condo in the SW.
http://tinyurl.com/yhvbuax
You might want to do an advanced search, and search for condos in your specific area that are similar to your own. Then you can get an idea of what a good market price might be for yours.
I have a feeling there are a fair number of 'accidental landlords' in Calgary right now, with more to follow. People that can't/won't sell their current property for a loss, so have decided to rent it out and move on up the property ladder and now carry two mortgages.
http://www.youtube.com/watch?v=tlKXLJwtoRA&feat...
8:50 and on for a summary.
http://www.housingwire.com/2009/10/28/san-franc...
At this point, and with the economy so heavily manipulated by gov't liquidity and intervention, almost anything is believable.
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Hmmm, let's do this again. Govt spends our money creating more debt and more taxes for us in order to fuel growth for companies that have lobbed off large parts of their workforce to achieve stunning corporate profits and big fat bonuses for their head honchos. So the US 3rd quarter climb in the GDP came on the backs of consumers bearing the brunt of more debt in newer cars stimulated with the cash for clunkers program and new houses stimulated by the housing incentives. More debt for consumers means more profits for those that benefit from the debt (companies) and the economy shows growth. Again, Main Street gets the full ungloved shaft.
The economic "recovery" we are seeing is an deliberately orchestrated and poorly manipulated balance sheet fraud that many of us can see right thru. It always has been from day one.........and when the money runs out, errrrr sorry about that, gotta use the correct terminiology here, when the Chinese demand a much higher return.........the house of cards can no longer sustain itself, and we collapse along with the US debacle.
Nothing like borrowing your way out of debt. Impossible to do. Most people have that figured out, not the gov't though. Sadly, they use YOUR tax money to pay for their mistakes. You don't get to do the same unless you are a big bank.
Taxes will go up, taxes of all types, kinds and sizes. Taxes on the rich, poor, even unemployed, maybe they will have to tax the homeless to? Cabon tax, farting tax, breathing tax, tax..tax...
Oh, and cuts too, cuts to heath care, cuts to education, cuts to wages, cuts to benefits, cuts to welfare, cuts to UI premiums, cuts to roads, cuts, cuts...
Fun.
Thanks gov't. Can't wait, maybe my children's children will see the "green shoots".
Mike
Meanwhile in Canada:
Payroll employment, earnings and hours
An indication of the coming R/E market boom, eh?
After all, once the job is gone, where else one can make cash but in flipping houses? Can't lose proposition, eh?
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Thank you all for your very sensible and reasonable arguments and you're terrific links. You've been saving my a$$ since 2006.
By the way, where's the Squidmiester? Probably working in the tar pits...