Bob Truman, First Place Realty

Bob...informative and balanced info.

FWIW: I'd take CREB predictions on any given day. Mr. Turner has made fortune deluding his followers for years. His drivel is old and unsubstantiated. Another version of Ponzi scheme...

Turner has historically based his macro predictions on the US economy, with the (partially correct) assumption that the effect from the US in many markets is large enough to carry over and swamp everything in Canada, leading to a similar situation in both countries.

However, housing is a different beast than manufacturing.  Canadians buy houses to live in, and they can NOT just pick up and move to the states (or vice versa).  This creates a market insulation that voids any premise of identical actions in both markets.

Additionally, while he is correct in that the rate upticks are going to start having an effect on sales and prices, but he doesn't reconcile this with the growing economy.  While rates rise, unemployment is dropping, and salaries are rising.  Turner completely fails to balance the equation.

Anyone who thinks they can predict the future is only fooling themselves. A person can only make assumptions based on their own ideology, historical events, statistical data, trends and a whole pile of other complex issues.

The simple fact is the real estate market has significant uncertainty. If CREB can predict within 2% of the actual year after year, why would be even having this discussion? Garth Turner has presented a case that although possible, is not the most likely or highly probable. No one can say that he is right or wrong, just one opinion in the spectrum of possibilities.

Sean: While I mostly agree with your comment, the one thing you leave out is that mortgage rates are not fully tied to economic recovery. After all, bonds go up depending on a government's ability to pay its debt, so, with the rate hikes of the past two days, mortgages will now cost more, but there is no economic growth that the is the basis of that hike.

There is economic growth, however, which is why the BoC is contemplating hiking the rates later this year. While this probably would also affects mortgage rates, the BoC rates are not the sole contributor to mortgage cost.

Jr: Both CREB and Garth Senior have reasons to say what they say. CREB is upbeat because it wants its Realtors to sell more homes, Senior is pessimistic because he wants to spread fear and sell more books, consulting, or whatever else he does to make a living. Whether you like it or not, both voices are important because they both provide balance and rationale from different perspectives.

A 20% drop from today's price puts us at $382,000(avg price).

I saw garth Turner on tv last night, telling people to "sell now because prices are going down 20%."

Then he says to everyone, "don't buy now" because prices are going down 20%.

uhmmm how does that work, anyway?

Bob, I am confused. In your "compared to avg stats" you say that sales are -14%, new listings +20%.

Yet somehow new sales and new listings MoM seem to be at par an the absorption rate is less than last month.

How does that work?

"new sales and new listings MoM seem to be at par"

What do you mean by "at par?" I understand the term "at par" to mean that something is the same.  Sales, new listings, inventory have all changed MoM. -Bob

You are in a great industry Bob.  I wouldnt worry too much about your income because people want and need to buy houses.  At $100K and rising income per year, I dont worry about getting a house because Ill probably never get the down payment to buy anyway.  Buying a house is nothing special.  You then have to worry about upkeep and tons of other expenses.  The whole scenario in Calgary is a big nightmare.  Enjoy profiting off it while you can, it will get nasty as rates go up.  15% off current prices is still not in line with normal inflation(still a bubble).  So your job is secure.  Dont worry about houses selling.  Its like buying oranges at superstore. :)

My opinion is that Garth Turner gets way too much credit for what he says. Garth Turner is a housing market commentator and/or financial commentator. COMMENTATOR is the key word, everyone on this blog or any other blog, is a commentator. No doubt he is a successful businessman, but other than himself he never made money to anyone else and whether the housing market goes up or down or stays the same, there is one guy who's going to make money on this. His name? Garth Turner of course.

How many people sold their houses, listening to the "guru", went renting waiting for the "crash" to buy back, just to watch in disbelief their sold house go up in price %20, %30 or even more? How many people delayed their house purchase based on his teachings and while expecting the "promised" %15-%25 "crash" for the past 18 months, they've witnessed instead a %15-%25+ increase.

I never have an issue with people voicing their opinions on whatever the subject, however in this case I see a self proclaimed "financial guru" (haven't been able to find any financial school he ever attended for that matter, even OSC, at some point, did have a problem trying to figure out where all those financial skills with no paper to back it up), selling his teachings to an audience mainly made of low/er income and retirees.

Fair business no doubt, but then why would one who pretends to care so much about people, charge the very same people money to read his opinion (about as valuable as mine) and also sell them "tax avoidance" tips which have been available for a long time for free?

This is really amazing reading.  You people are delusional.  Of course Calgary is in a housing bubble.  

Prices were falling in 2009 and were only saved by emergency interest rates and the CMHC rules being opened up.  With the rules gradually tightening and interest rates rising prices will begin to fall.  The only question is how fast and for how long.  Best guess is 3-5 years and at least 30%, perhaps 50%.

The one law you can never ignore is economic fundamentals.  Some days you get the bear, some days it gets you.  Looks like the bear is going to get most of you.  Good luck with that.

I recommend everyone that reads this to take a few minutes to read Garth Turners blog with an open point of view if nothing else http://www.greaterfool.ca/. There are many ways to look at something and I back the man 100%. The Gov. did save Canada from a massive correction by dropping interest rates to nearly zero (lowest in history) last year. This is why everyone was buying, (greater fools). But unfortunately what goes up must come down. Were not all millionaires around here. I mean damn, I don't make a bad living, but there is no way I would buy something for $400,000 that just 5 years ago was $200,000. The only reason that happened was that it used to be 20% down over 25 years with good credit, then it became 0% down over 40 years and the gov. backed that money (CMHC). We followed the US into this abyss and the s**t is about to hit the fan. By this time next year people will be thinking twice about just how great this recovery is. There is always two sides to the coin.

My last comment didn't make it thru, and it wasn't a bad comment either. :(

Nothing from you was received  previous to this. Send it again. -Bob

What I don't get is why so many people think that expensive houses and longer amortizations are good things?  I mean, if you're in the market, the only important consideration is the size of the spread between the house you're in, and the house you buy when you sell the house you're in.  And that spread grows larger when house prices are expensive, so if you're in the market, and you aren't cashing out and moving to Miami, expensive houses are either bad, or if you're downsizing, then they're marginally better than lower prices.  

It might make you feel richer as your house appreciates, but unless you can actually realize that equity, what's the point?

If you aren't in the market, expensive houses are clearly bad, since they are less affordable.  Affordable doesn't mean "can I afford the monthly payment", btw...at least not to me.

At the end of the day, the only people who benefit from more expensive houses are Real Estate Agents and Banks.  I'm not even sure Agents benefit because the sort of boom we've seen in the last few years really just brings a bunch of fresh competition into the profession in the form of new agents.  There was a point a couple of years ago when everybody I knew was taking a real estate course.  Of course, they likely didn't make any money at it, since it takes time and effort to actually get clients in that (or any) market, but it had to have made it harder for established agents.

So in effect, by extending amortizations, lowering interest rates, and changing CMHC regulations, we've managed to engineer a situation where banks make more money, taxpayers insure them so they have limited exposure to riskier loans, and we all pay twice what we used to for the same asset.

Again, what's good about any of this?

Housing prices may not fall 15%, but they will see a decline. There are just too many factors that at play which make it seem as we're heading towards a reduction in prices. BOC raising short term rates, the bond prices, the economy is still in a fragile state, house holds are maxed out 70% of household incomes are going towards housing. There isn't much discretionary income in most homes, if the economy goes for a slight down turn or the stock markets slip for any period of time, you'll see a lot more people not being able to afford their homes, when 70% of their monthly income is going towards home expenses.

Thanks for the info Bob.  It's nice to find a realtor site that presents both sides of the story.  Good luck to you!

Sent a comment to Garth's blog pointing out that he was off by 27% in his prediction for last year. CREB was off by 2%.

My comment didn't appear.

Anyone who buys a house now is going to suffer later. The affordability index of housing in Canada is through the roof; it is currently cheaper to rent than buy. Add to this that we are in the middle of the deepest recession since the great depression; the unwinding of the baby boomers assets, of which housing is the largest asset; the increase of taxes (HST) and the increase of mortgage rates as seen within the last two weeks.    All this points to the making of a depressed / buyer’s real estate market.  Housing will be coming down in price within the next two years; real estate pundits say somewhere between 15% and 35%.   Don't listen to realtors they want to make a commission and if they aren't selling they don't make any money.  So rent for a couple of years and wait for the housing prices to come down and you will be rewarded when you purchase your house.

Chris, should people listen to me if I say that now would be a good time to be selling? -Bob

Chris, should people listen to me if I say that now would be a good time to be selling? -Bob

The answer is: Yes, now would be a good time to be selling.  

Get out of the housing market if you can find a buyer even if you have to sell for less than you want and buy back in after the correction.  

Hey Chris,

i am assuming you live in either BC or ontario.

However Us people here in calgary don't pay HST and will not be paying HST for the forseeable future.

If your going to talk and give advice about something it might be a good idea to know a little bit about it.

Hi Bob,

Sorry, I wasn't specifically referring to you, though I'm heartened to hear that you somewhat agree with me.  I just don't think that enough people think it through.  It sounds wonderful when your house goes up 50% in 4 years...until you realize that you can't ever get at that extra money because everybody else's house also went up roughly the same amount.

With respect to the Agent comments, I think that certainly on the surface it would appear that in a hot market, Agents can make quicker sales for higher commissions than they can in a cooler market, however I also reflected that a hot market presents all sorts of challenges that prevent most agents from raking in the cash.  Increased competition for clients being just one of those factors.

So I guess we almost completely agree.  I'm heading inside to avoid the flying pigs.

Seems that the subject of housing prices is becoming more touchy. As little as a few weeks ago you never heard anything negative, seems a small shift is happening.

I'm in the market for a house and have been on the sidelines for a few months. I read a number of blogs (including garth's) and that's how I form my opinion of whether or not I think it's a good or a bad time to buy a house. I think I will rent for another year at least.

The way I look at it I would rather be wrong, see home prices go up 10%, and then pay that extra 50k spread out over 25 years, then buy a house, have the place depreciate this year, and then having to come up with the cash to buy myself out. That's what I ended up doing on my last place and let em tell you - it blows.

Yes Realtors are sales people, so of course they will say that now is a good time to buy/sell. That only makes sense. It's up to the buyer/seller to educate themselves and make a decision that makes sense for them.

And Bob - In my previous comment I was suggesting that sales were up 30% and new listings seemed be up 30% as well (roughly speaking) thus things being "at par". Poor wording on my part I guess!

You are correct - for comparisons to one year ago. My numbers: sales down 14% and listings up 20% was a comparison to the historical average going back to 2001.  -Bob

Schroedinger -- I am not sure why you're surprised that Bob agreed with much of what you wrote. I made very similar points on this blog months ago (about high prices not necessarily being good for RE agents or home owners).

And since you know me in "real" life, you know that me sticking up for Bob is not just Bob posting on his blog under a different name.

High prices are very good for speculators, investors and in some cases developers.  Not so much for the rest of us.

However, what I find interesting is how RE bears never admit they were wrong. The very first Calgary "housing bubble" blog, the Calgary Contrarian, started in May, 2006 (and if you read the first post, the writer had an even earlier version of that blog). It's always "just wait until next year." How big will the crash have to be to get us back to May, 2006 prices? Hey, I hope it happens, but I won't be holding my breath.

http://blogs.wsj.com/developments/2010/04/05/the-housing-blowup-did-you-see-it-coming/?blog_id=36&post_id=10941&source=patrick.net

The Housing Blowup: Did You See It Coming?

President Bush, Greenspan, congress, NAR, banks, brokers can not see what’s coming or they don’t want to see what’s coming because there is no plan 2 for tsunami? Are we different?

-----------------------------------------------------------------------------

90% people (50% paying 5% down) are paying within 10% down payment. It means most of the buyers don't have any buying power but banks/CMHC can throw low interest money that is their buying power.

When Banks/CMHC get tightens credit ...this RE casino going to fall.

This whole RE game is kind of like a game of poker: All the good cards in the deck have already been played:

0/40 mortgage= first ace

5/35 mortgage= second ace

Lowest interest rate in history= third ace

Self employed CMHC mortgage= fourth ace

Speculators buying multiple properties with 5% down, bogus rental income, easy credit etc.. are the rest of the good cards.

All of the good cards are already in play, nothing left in the deck, but no worries, the tables at the RE casino are always open.

Further to my last comment: I didn't mean to imply that 2006 prices are out of reach if we have a crash. My point was more about bears always predicting that the crash will be coming next year -- year after year. And there is always a new reason why the crash is coming. First it was the "massive" inventory build up in 2007, then it was the end of the 40-year mortgage, then it was the financial crash of 2008 and high unemployment, and now it's higher interest rates and/or slightly-more-stringent rules for qualifying. Most bears use to say we were "just 2 years behind" the US, but I don't hear that much anymore.

Will a crash happen this year, or next? Time will tell. One thing that should be clear at this point: the Canadian government will do everything in its power to support high house prices. Despite CMHC's mandate of making housing affordable to Canadians, they've done exactly the opposite.  

I wonder what effect this sudden surge in the cad will have on interest rates and re prices!

I went back to April 7, 2009 on the Greater Fool to see what Garth was saying that day last year:

"I won’t run through all the reasons why house prices will be lower at Christmas than they are now. You need only remember one – jobs."

http://www.greaterfool.ca/2009/04/07/hot-bothered/

How much did the price go up by Christmas? $31000

By April 7, Garth was well aware of the low interest rates. Could he be severely miscalculating again this year?

By the way, he won't allow my comments on his blog.

Garth turnaround:

http://rickmercer.blogspot.com/2006/01/look-whos-back.html

http://doubleblind.ca/2008/12/17/garth-turners-predictions-of-economic-doom-and-gloom/

Garth is for entertainment, not for financial advice.

DVRVD:

I'm not holding my breath either.  Just my checkbook...behind my back.  We've talked about this ourselves before, I just didn't know you'd already posted the arguments publicly.

I freely admit that I've been wrong all along.  The bloody market hasn't crashed and I thought it would.  I haven't exactly been left behind either though.  The houses I look at today are roughly the same price as they were 2 years ago, so I haven't exactly been 'priced out', as I was often warned by the last realtor I worked with.

I still think the market's going to correct...it's just taking longer than I thought.  Partially due to unprecedented factors such as extremely low interest rates and the taxpayer guaranteeing any losses that lenders would otherwise sustain.  Combine that with extended amortizations and lower downpayment requirements, how could housing not continue its ascent?  

I think, however, that those factors are about to be partially mitigated by rising interest rates and Flaherty's latest flip flop on mortgage requirements.  Add in the effects of the dollar at par (regardless of the latest spin about how "importers benefit") and the effect that will have on Canadian exports...

Again, I could certainly be totally wrong.  I just don't think I am.

Either way, geologically speaking, my timing will be almost perfect.

Schroedinger -- I guess we'll see. My crystal ball is a cheap knock off made in China purchased on sale from Walmart at a suburban mega-mall. Needless to say, it's almost entirely useless.

Garth Turner should be put out to pasture.He has been telling us that housing prices are going down,down,down for the last 20 years with nothing to back him self up with.He must have bought his crystal ball from a pawn shop.Do your self a favor and dont pay attention to him.Thankyou,DON.

Hey Don,

   Should we pay attention to these Royal LePage guys?  What do you think about their crystal ball?

Anyone else willing to bet that April 6th will mark the peak median and average prices in Calgary for 2010?  

I'm guessing that with the rising unemployment + the rising interest rates + the new mortgage rules + the rising inventories + an absorption rate above 3 for SFH and 3.5 for condos + a sales/new listings ratio under 50% we have finally passed the inflection point.

Only time will tell how steep the slope is on the other side of the hill.  I'm guessing it won't be as steep as the path was on the way up, but I have been wrong before.

Mabus

Hey Bob,

I was wondering if you could confirm something for me?  As we all know prices have jumped a bit from December until now.  However, one thing i noticed was that this doesn't seem to be a universal jump.  As most areas in the city have, most of the NE did not participate in this rally.  The only reason i noticed this was because the house we used to live in came on the market.  It eventually sold but they dropped the list price down 30k before it sold.  I don't even know what it sold for but the list price was eventually much lower than what we had sold it for in 2008.  You will also notice there are more and more detached SFH in the NE for under 300k now.  Are you noticing this as well?  I also ask this because if we see another 10-15% drop (IF) the prices might be attractive again for my parents.  Thanks keeping up the good work Bob.

There is some validity to what you're saying. The NE did not show any price increase for 2-storey homes. See the below table.

Individual communities can vary greatly within the quadrant. Don't assume that because you live in the NE, that your house price didn't go up. The data below is for 2-storey homes; maybe bungalows were a different story. If you want to be well-informed, your realtor can provide the relevant and up-to-date info. -Bob

http://www.findcalgary.com/

Reference to another RE blog many of you likely frequent.  Go to the blog and find the post "priced out".  Mike has linked a 2004 USA today article that sounds almost identical to the Herald story...but with even more metrics and data to support the story.  In fact, if we didn't know it was from the USA and from 2004 you would think it was just in the Calgary Sun or Calgary Herald last week.  Fortunately we are different in Canada, and even more different in Calgary!  

Our fundamentals are strong and with only a 0.3% MoM increase in unemployment in AB from Jan to Feb (http://www.statcan.gc.ca/subjects-sujets/labour-travail/lfs-epa/t100409a4-eng.htm) we are certainly showing signs of job creation and income growth.  Couple that with the moderate gains in Canadian employment as a whole (http://www.theglobeandmail.com/report-on-business/economy-creates-modest-17900-jobs/article1528659/) shedding 17,000 full time jobs in exchange for 32,000 part time positions it gives us all reason to believe that people most certainly have more money to spend on houses!

It is so obvious that things are great and that anything else is just so much hooey!  I'm glad we have guys like Marty Hope and gals like Dianne Scott to remind us of how awesome everything is because those that are "outside looking in" are ignoring all of these fantastic things and spewing hooey left right and center!

Dianne Scott keeps saying people are going back to work.  I can't blame her for not reading the Vancouver Sun, but they appear to know something she doesn't.  

More outsider-looking-in hooey if you ask me....or her.

http://www.vancouversun.com/business/Alberta+unemployment+rate+climbs/2782712/story.html

It really does appear we are different - the only province still losing jobs.  That's strong fundamentals!

@Vinny.

The NE is a undesirable area to live in or to raise a family.As city population grows the real estate market reaches a critical mass where it matures and therefore market segmentation is a natural process. That's why we see homes with mountain views now commanding a premium whereas a few years ago there was hardly any premium paid for view.  

I wouldn't be surprised if parts of the SE and NE  especially areas closer to the LRT drop in price while rest of Calgary increases. Areas like Forest Lawn are becoming veritable war zones. Who wants to live there?

I have been banned from Garth's Greater Fools.... LOL

I tried 3 times to get a post to print and he wouldn't print it and now I'm banned for malicious activity... LOL

I tried to say....

Well fellow Garth followers, we have been on the sidelines waiting 2.5 years for this real real estate collapse and have missed out on average the easiest $200 grand one could have ever made.

another question since Frank brought this up.  Currently there is a slight premium for locations close to the Ctrain.  Are you suggesting that you think this trend may revert back to the past where it was a discount to be close to the train?

"Articles (and reaction) like this prove my point. It’s over. — Garth"

Here's what Garth said exactly one year ago on his blog...

"As I’ve said before, those waiting to sell their homes until prices rise will be idling for many years. So, sell now. Take the hit. Move on."

http://www.greaterfool.ca/2009/04/12/its-like-over-dude/

By selling last year, you'd be out on a year of price appreciation. In Calgary, that would mean about $50,000 on an average house.

Both sales and new listings seem very slow right now, or is that just me?

I honestly don't understand why the media is giving so much attention (positive or negative) to Real Estate. It's only a house for crying out loud. Yet it's in the media every single day. Back home we'd never hear about housing in the newspaper. Maybe in the Saturday newspaper, but that'd be it. Silly North Americans media...

By deleting our comments Garth makes it obvious that he has something to hide. He should "just take the hit and move on."

The are too many comments on this blog that are one-sided. Or full of peer colleagues writing for the blog.

Just to remind, everything has a cycle. The housing will jump and then to crash and then jump and then crash. Nobody can deny that. This just likes the stock market.

The Calgary housing already jumps for a few years since 2000. Some are big jumps. It is impossible to make big jump again in the coming years if not saying crash.

A balanced market will be favorable for both sellers and buyers. Please work on this direction and write your comments.

Sorry to say, but the market will do whatever it wants in spite of our comments! All input is appreciated. All my attempts in the past to make the prices fall(or rise) have been in vain. -Bob

If you follow Garth's reasoning "Articles (and reaction) like this prove my point. It’s over. — Garth"

then doesn't it logically follow that when he slams a realtor, he's just "proving their point?"

Thanks for your comments Bob,

    I have to agree with you when you say that Garth Turner does himself a disservice by not admitting he has been wrong with his predictions.  That being said, I cannot blame him for not anticipating the emergency lending measures that have helped to prop this market up for the last few years.  I recently attended a speech Garth gave in Edmonton (friend invited me) and he did make some good points.  My friend decided not to purchase a condo after attending Garth's presentation.  He no longer feels like he is going to "miss the boat" if he does not buy now.  I guess it will be a wait and see period for all of us.  Thank you for this site and your objective commentary.  I agree with your predictions for this year's RE price trends.  

ps.  I am an owner....not an angry renter who despises the success and happiness of homeowners.  Things have just gotten out of control.  A little correction (hopefully not too big) will be a good thing.  

"Both sales and new listings seem very slow right now, or is that just me? "

Will: I agree that the market stats have seemed a little boring this year so far (which is what a housing market should be, really) but it seems that the number of listings is getting a little bit interesting.

SFH inventory is on pace to add over 1,000 this month, which would put inventory over 5,000.  Inventory over 5,000 in Calgary has definitely seemed to correlate to significant downward price movement in years past.  This last time we reached it was November of 2008.

It could be even more significant this year if sales stay as 'meh' as they are now.  

I actually thought there would be a bit more of a mad rush of sales with so much MSM talking about rising interest rates.

The inventory seems to be rising faster than seasonally expected in Edmonton as well...

Posted 5 days ago by Kevin, author of EHB

" It was the inventory spike the marked the end of the run up in ‘07, and while it had been rising much faster than seasonal this winter I held off making a call cause while we were out of range, we weren’t egregiously so. Normal range can be seen here:

http://edmontonhousingbust.com/files/100407-1.jpg

I’m going to do a more indepth piece on this later, but it’s clear to see that the normal range for month-over-month inventory changes is +/- 500… so when you’re breaking 1,000, something’s up. If the April numbers are over 1,000 again, what little doubt is left is long gone.

Being in Edmonton and Calgary kind of gives us a unique perspective cause we’ve already seen how it ends once recently. We know what to look for."

I'm not saying to buy real estate now, I'm just saying he's been on the bubble talk for a long long time and the greatest price gains are at or near the top. I'm in downtown Toronto and people are still paying $100 grand over list for 100 year old homes and then totally gutting them. It's all about location here in TO, the burbs aren't seeing the action that downtown is, that's a given. Bubbles can grow bigger then you could ever imagine before they pop. In TO if you have been on the sidelines the last two years you have missed out on a windfall of appeciation!

Posted on Garth's blog today, though it was good for a laugh.

Crack Shack or Mansion, you decide!

http://www.crackshackormansion.com/

^^ what will $1 million in Vancouver buy you?

CM:

Astonished by the crackshackormansions.com.

Totally agree with him by the facts. What a bubbble?

Bob, last year you said on Jan 11, 2009: "I will discourage any purchase as long as I can."

Was that bad advice? Did anyone delay purchasing and later regret it?

I recall the buyers I was working with when I said that, Jim and Jenny. Talk about a success story. Luckily they didn't listen to me, as they bought their dream house in a prime location at a price that is about $60,000 less than they would be paying today. Inventory was high and the selection was excellent. The market was really in the doldrums.

I also remember the negotiations. We came to an impasse and walked away. The seller's realtor called a week later and requested that we re-open negotiations.

Furthermore, they kept their previous house and rented it out, and watched it appreciate for the past year. -Bob

Ben: (Well fellow Garth followers, we have been on the sidelines waiting 2.5 years for this real real estate collapse and have

missed out on average the easiest $200 grand one could have ever made.

I was one of the sidelines Gath followers, waiting 2.5+ years for this RE collapse

& missed out on average $100 grand I could have ever made.

Eventually bought a house in Nov 2009 ...

Poor timing..time will tell.

Grace

   Do you live in Calgary?  How did you lose money by listening to Garth and not buying 2.5 years ago?  According to Bob's statistics, the prices 2.5 years ago were very close to what they are now.  How did you miss out on the easiest $200K of you life by not buying back then?

Very odd Grace. Perhaps it depended on area.  2.5 years ago the house we are currently living in now was worth about 50k more than it is now.  

I hear you Vinny.  I am in Edmonton, but I have experienced the same thing.  I bought two years ago and my house would sell for about $20K less today.  So after paying my selling fees, I would be down over $30K. I don't know what planet Grace is from, but I think it could be Vancouver.    

Vinny and Spence:

You do realize that Garth has never said there was a good time to buy real estate in the last several years, so technically if you listened to Garth you would always be renting, and have thrown away tens of thousands in household equity.

You would also have bought Nortel at the top of the tech boom in 2000.

If you did happen to have a house and listened to Garth last year, you would have sold at the botttom.

Buy at the top, sell at the bottom. Not a good thing to do.

Sure he was right in 2007/2008 but you can't turn on and off the "listen to Garth plan"

Try to tell others this on his blog and he will erase your comments or call you a name then erase your comments.

It is true that 2.5 years ago, house prices were higher, but that is some troll-like timing on Grace's part if you ask me.

All that being said, I agree that prices will come down a bit in the medium term, not as much as Garth would like.

I love the argument that if someone criticises you, you must be right. That's pure Garth.

Garth must be reading this blog because he is now allowing comments like this

"you must admit that your rant on real estate has cost people thousands of dollars in the previous years where they sold on your recomendation when there was 10-20% more lift in the RE markets."

Garth is the man we need to listen. He always shows sympathy to the poor family who could not afford a house.

You guys are rich ones. please let him alone.

Jimmy,  

   I obviously do not always listen to Garth as I bought 2 years ago.  I really have not followed much of his advice at all.  I do not follow his stock market/investing advice.  I really do not know very much about the guy.  He is a politician...need I say more?  I just think he makes some good points about the necessity of a significant drop in RE prices.  I don't think we reached the bottom last year.  The people who purchased last January have made some equity in the time since but, as we all know, it is easy come, easy go with home equity.  He may have a terrible record with investment advice, but I think he is right with regards to today's RE values.  I don't think a 15 - 20% decline from today's prices would be out of line considering the fact that we experienced multiple years of increases at similar percentages.  

Jimmy,

I may have misled you on my comment earlier.  I did not actually say i bought 2.5 years ago.  I just said our place was worth more 2.5 years ago. We actually watched this house tumble 20k before we bought it and that was already 40-50k down from the peak.

Anyways I think a good lesson here is people need to do their own research when making big decisions.  I began reading Garth books 15 years (only read 4)  ago but i have never completely followed his advice.  I take what I like from him and use it.  I never expected a full out housing crisis here but some of his points were pretty good so i knew at the time there was some correcting due.  What Garth and pretty much all authors do is list very good points and not even lies but they purposesly will omit other good points to illustrate what they want to.  Do your research people.

Bob has done a pretty good job in the last while to not argue any side and just throw stats and observations on this site.

RBC nudging up their fixed rates a little bit more tomorrow....

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2010/04/rbc-raises-fixed-rates-14.html

RBC says: “We have held off from handing [rate increases] on to consumers but now it has become necessary. The rise is tied to our long-term funding costs which have gone up considerably.”

No other banks have followed RBC yet, but they likely will soon.

CM this happened yesterday. Most others have followed suit.

Kevin over at EHB makes a bold claim that this rally is done...

http://edmontonhousingbust.com/2010/04/death-rattle/

"As we can see, as soon as 2010 rolled around, inventory again started to take off, and surpassed the 500 threshold. I was hesitant to make any declarations in light of the January and February numbers, as while in excess of +500, it wasn’t by extreme margins and wanted to make sure it wasn’t just and anomaly caused by the recoil from fall delistings.

But with the March release of numbers, any doubt was removed… stick a fork in this rally, it’s done. And according to the preliminary April numbers, we’re in for another similar jump this month.

The same story also appears to be playing out in markets right across the country this spring. Even the CREA acknowledged the massive wave of listings, almost 100,000 nationwide. We in Alberta has seen this show just three years ago, we know how it plays out… now the rest of the country is going to get unfortunate opportunity to find out for themselves. "

Pajha said:

"Garth is the man we need to listen. He always shows sympathy to the poor family who could not afford a house.

You guys are rich ones. please let him alone."

So is Garth... Ever wonder why that is?

I think this comment on Garth's blog today sums it up nicely(comment #57 from Bubo)...

"Reading this forum for the last two years I got tired to hear the same thing, again and again, that real estate in Canada will crash. Sorry, I know Garth you never said it will crash, it will have a correction.

In the last two years home prices went up 40-50%. Just in Montreal for the last month prices increased 7%. I know it’s crazy to think that it’s sustainable on the long run but it’s still holds true for now. Two years ago you said prices will go down 15-20%. Now you saying the same thing, just a correction of 15-20%. Just stop making these ridiculous predictions because nobody can predict the future. The same house I wanted to buy two years ago for 235K, now it sells for 299K. With the low interest rate a lot of people could of paid the mortgage within 8-10 years. So stop preaching about not the right time to buy houses. You treat people like everybody is so stupid here in Canada.

Your blog is still informative and I know you have books to sell. Do not deflect from the original course. And now comes HST story….."

Solution: leave. — Garth

On a long enough time line, the probabillity of any unlikely event happening becomes 100%. It's the beauty of being a prophet.

I just happen to think that the time line has been long enough for Garth's predictions to come true. Primarily because: houseprice/income ratios are super high, low interest rates are going away, the 0 down 40year mortgages that were available a couple of years ago will need to be renegotiated in 2011/2012, higher unemployement,bond rates, etc.