I've read his books and agree with his forecast of a real estate correction. I first made that prediction myself in Feb 2007. Garth started his blog in 2008. I've told every buyer that I expect to see lower prices. For the most part, I've been wrong.
Ringleader Garth and his lynch-mob delight in mocking and ridiculing the predictions made by economists and the real estate industry. With his inflammatory language, he gleefully whips his blog dawgs into a frenzy, each one spurring the next to greater depths of despair and misery, as they stalk the internet for vulnerable victims. (Thankfully we have computers - the victims are subject only to cyber-lynching.)They terrorize the blogosphere and senior citizens. This comment is typical: "It would give me great joy to see a massive RE crash devastate all the OLD people financially and force them out on the street!" (Brian on 08.22.10 at 10:56 pm)
Garth can take credit for some accurate predictions, but let's look at some of his other prophecies which were supposed to have happened by now...
Almost two years ago, Garth Turner said:
“Don’t be surprised if these things happen:
* Neighbourhood food shortages as just-in-time delivery systems are disrupted
* Electricity brownouts starting as early as the summer of 2009
* A pension crisis as retirees find out about unfunded liabilities
* Real estate prices in Calgary, Edmonton, Fort Mac at 50% of 2006 levels(they're actually 2% higher in Calgary)
* A wave of mortgage defaults. Yes, in Canada.
* Scaling back of 2010 Olympics in Vancouver
* Bankruptcy of major Ontario homebuilders
* Martial law in some US and European cities to quell protests of unemployed
* Seasoned firewood climbing to $300 a face cord"
The above was posted Dec 17, 2008 on "the Greater Fool" Where risk lies
In the comments section of his blog, Keith in Calgary(also known as Carioca Canuck) said:
"I believe EVERYTHING from the “don’t be surprised if these things happens” category will occur within 18-36 months……..we’re well on our way there already, with half the list completed, or darn near close to it.
Here are the things I believe will happen from your “I hope these things don’t happen” category……
1-Failure of a major Canadian bank, leading to emergency merger.
2-Banks ordered temporarily shut and restrictions on cash withdrawals.
3-Auto industry collapses, despite bailout. Ontario grows rust belt.
4-Economic activity falls by 10%, unemployment hits 20%.
On Aug 22, 2010 Turner said:
There is zero credible evidence Canadian banks will falter.
On Aug 26, 2010 Turner said:
there is no bank problem. Nor will there be one in this lifetime – not in Canada.
As for the auto industry collapsing, GM set to offer shares to the public
It makes me think of this famous quote: "I'm an old man. I've seen many troubles. Most of which never happened."
The price of seasoned firewood today? $100
Garth Turner http://www.greaterfool.ca/ enjoys shooting fish in a barrel, with his frequent insulting diatribes about economists, the media, and realtors. It's easy. It's sensationalistic. It sells. It gets an audience. He enjoys bullying the disadvantaged. To each his own, I say. But when he starts criticizing Weyburn, he’s crossed the line. 
It's ironic that a failed politician from Ontario feels compelled to mock this prairie gem. "It might be because of divorce or unemployment or job offer in Weyburn - three devastating life events." Me, I'm entitled to disparage Weyburn and there's plenty of grist for the mill, as I grew up down the road. But coming from a third-rate politician and pseudo-author from Eastern Canada?
Weyburn produced the Greatest Canadian of all time who also happened to be a first-rate politician. I don’t even see Garth’s name in the top 50.
Weyburn is the birthplace of W.O. Mitchell, possibly the country's greatest author, and winner of two Stephen Leacock awards. Canada's most prestigious literary award is named after him. I've read Garth's books, and while they're good, the Stephen Leacock award will continue to elude him.
The Weyburn Mental Hospital was home to some of the first LSD experiments and origin of the word "psychedelic."
Bob Truman was born a stone's throw from Weyburn. Like I said, I'm entitled to mock.
This was just an appetizer. In my next post, we'll take a look at some of Turner's predictions.
Oh, if you're looking for a job, there's a link on here http://www.weyburn.ca/. You can also buy a serviced, good-sized residential lot for $54,000.
If you're ready to be shocked, and grateful for your present living accommodations, and enjoy a laugh or two, take a look at this Bob's old house
Some of my long lost relatives organized a family reunion this summer, and after I got used to being called "Robert" again, I had a great time renewing acquintances with my cousins, aunts, and uncles. Those who hadn't seen me for 30 years had a hard time recognizing me without my former 'do.
When I look at how high our standard of living has become in the interim, it's hard to imagine the derelict home we lived in. My cousin from Illinois, Laura-Jean, surprised me with some old black-and-white photos that brought back memories of my childhood including the photo of the old house which I've linked to above. Life was hard.
How hard was it? Well, we walked two miles to school every day, barefoot, uphill in both directions. Okay, not that hard.
My family of origin(eight of us) lived on a mixed farm in the dustbowl of southeast Saskatchewan. In addition to growing grain and raising livestock, to help make ends meet, we milked a half-dozen cows every morning. Not with a milking machine - but by hand. After putting it through the cream separator, the milk was bottled and we delivered it to homes in town - all before going to school.
School. How many people do you know who started grade one in a one-room schoolhouse? When lunchtime came, Mrs Nordby filled a tin can with water which had a nail-hole in the bottom, and that's how we washed our hands.
Never owned a new ball glove or bike, but I was very adept with a pitchfork(I can handle lots of BS). With the benefit of hindsight, some of the disadvantages were really advantages. Hauling bales and milking cows turned me into a muscle-bound hunk(without the use of steroids). I could climb the rope in the gym faster than anyone else. I was the arm-wrestling champion(except for Donna Emde who must have worked even harder than me, but she was a year older).
We didn't have a television. I had to read books instead. Consequently, no spellcheck required here.
I've hilled more potatoes than you will ever see in 10 lifetimes. No one had yet heard of the benefits of eating organic food, but we enjoyed it everyday.
Nothing was confidential. News spread quickly on our telephone's party line, but people knew their neighbours and helped each other. I still remember the phone number: 5 ring 2-1.
Luxuries, holidays and fancy restaurants did not exist in that world, but I came away with a great appreciation of life and living. It created within me a culture of self-reliance, thrift, and an entrepreneurial spirit.
And farm girls. This one was definitely outstanding in her field.
As for my reference to the footbal team in the previous post, my days as a hard-running, slashing fullback paid off in a championship season with the High school football team. Can you pick out my number?
The more fanatical they are, the harder they fall
Did we ever think we'd see the day when blogger Calgary Rip-Off would become an advocate of purchasing real estate? He said today on "the Greater Fool".....
"I have been waiting for a horrific crash on the current rip off that still is Calgary housing and I just dont see it.
As much as I would hope you are correct and Calgary is toasted, I just dont see that, which is why I am watching the mls status daily. If I see any indication that things start to skyrocket(like the 2007 crap), I will get into a house of my choice(actually my wife and mine) asap, This goes against my true wishes of Calgary going to hell for housing values, but I must be practical-or be priced out-forever"
"If things start to skyrocket" - Any chance of that happening? If prices briefly stabilize or rise, and inventory continues to go down, will we see Calgary Rip-Off leading a horde of new buyers?
"priced out forever" - Wow! That's dramatic. When I used to play high school tackle football, and we played a team with really big intimidating guys, our coach would say "The bigger they are, the harder they fall." The notorious Calgary Rip-Off has done a "180" and fallen hard.
This is just too much fun. 
Sellers wanted
A rare species nowadays, puchasers of real estate. My recent listing in Crescent Heights has brought a lot of them out of the woodwork. The house has been C/S for 3 days, and people are still calling.
If you have an updated character home within walking distance of downtown, I may have a buyer. Preferably on the north side of the Bow River, under $650,000 with a double garage or the ability to build one.
Contact me by email bobtruman@shaw.ca or call 403-650-2514. I answer the phone myself. No answering service to contend with. You'll save yourself a bundle of commission, too, by avoiding MLS.
I am an ardent proponent of the MLS system as the preferred method of buying or selling at the best price, but
you may be a seller who doesn't want your home on MLS
Surprisingly, a lot of sellers don't want their home on MLS and would just like a buyer to show up without all the inconvenience of continually prepping the house for showings, then leaving the home for at least an hour, especially if you have pets or kids. Another reason is the privacy. Many people prefer that the neighbours don't know.
For buyers, it's a real benefit when you can negotiate without the pressure of other buyers standing in the doorway.
If you are a buyer, and can't find what you're looking for, give me a call or send me an email, and I'll be happy to post a Homes Wanted for you. As well, if you are not yet set up with an Auto Notification for new MLS listings, I'll set it up for you. You'll be notified at the same time as the realtors of any new listings.
Compared to the 645 SFH sales which Squidly predicted for July, the final tally of 915 looks downright astonishing, and is 42% higher than the prediction.
For those who prefer to deal with reality, sales were down 37% compared to historic averages. The Crash/Confidence index is still low at -25, but improved considerably from June's -48. The long-awaited bubble-induced panic to sell did not materialize, and July marked the first time since Jan where new listings were down compared to the previous year.
The SFH median price finally made its long-expected drop, to $400,000 which was down $18,900(4.5%) from June but still up from July 2009 when it was $390,000.
Forgotten and neglected, condo median prices dropped a miniscule $1,900(less than 1%) from June.
You can see the entire July 2010 Stats at What's New.
Stats to Obsess Over
2010 compared to the historic average(9 yrs) for single family homes |
| Sales
(A) | New listings (B) | CC Index A-B |
Jul | -37% | -12% | -25 |
Jun | -35% | +13% | -48 |
May | -25% | +12% | -37 |
Apr | -19% | +25% | -44 |
Mar | -14% | +20% | -34 |
Feb | -24% | +3% | -27 |
Jan | -29% | -15% | -14 |
CC Index: The lower the number, the more likely we’re heading for lower prices |
Calgary Stampede on hold
The rush for sellers to list their houses has taken a breather. Whether it's temporary or part of a trend is too early to tell.
SFH new listings for the first 13 days of July are down 14% compared to the historical average, and down 5% compared to last year. In June, new listings were 22% higher than last year.
Sales are down 40% compared to the historical average, yet inventory is not increasing. The sales/new listings ratio for July is 45%, up from June's 39%. We're on track to have about 850 sales in July.
The Calgary "stampede" didn't happen as expected. Not yet, anyway.
A number of our readers were kind enough to humour Calgary Rip Off and reply to his recent comment. In his rebuttal, he says that he’s better than you, makes more money than you, and will save your life!
Calgary Rip Off says:
"Given that I make MORE money than most of the people giving advice on here(I pay more for my rent than your mortgage which is laughable-you would likely be dead or homeless if you hadnt bought when you did), and my wage is GUARANTEED, I am thankful for all the free advice though, much of which is as pointless as a dump after a load of exlax. It keeps going and going.
Keep in mind that buying a house is not like getting a loaf of bread. I havent bought cause my down payment isnt quite big enough...yet.
Someone said life will pass me by. Actually, I pass life by. Everyday I am above ground and not cremated...its a bonus. How do I know this? Im the guy that you will likely see if you have a heart attack....seriously. Im part of the lifesaving team. You all should feel blessed that my brain is so big...bigger than Calgary!
So, coming from someone like me, Calgary real estate continues to be crap shacks...Mario Tonegucci and Marty Hope would be proud. And I should have Duckett's job.
In the meantime I am a serf to a Lord, my landlord, and in an executive home the nicest Ive ever lived in, in my life. Complete with basement and 50 watt Marshall Stack and heavy Olympic Barbell(for cleans and jerks and snatches). Ill leave that with the musical illiterates here.
I can outshred you all and outthink you all.(fist bumps)"
There's a wonderful summer in store if you are a realtor who enjoys lots of hiking, canoeing, and time off. Also, if you are a home-buyer who is looking forward to lower prices in the fall. For the first 23 days of June, sales are 39% lower than last year, and 34% lower than the historic average.
As you can see from the table below, the crash/confidence index has dropped a few more points(it was at -46 last week):
Stats to Obsess Over
2010 compared to the historic average(9 yrs) for single family homes |
| Sales
(A) | New listings (B) | CC Index A-B |
Jun 1-23 | -34% | +16% | -50 |
May | -25% | +12% | -37 |
Apr | -19% | +25% | -44 |
Mar | -14% | +20% | -34 |
Feb | -24% | +3% | -27 |
Jan | -29% | -15% | -14 |
CC Index: The lower the number, the more likely we’re heading for lower prices |
Last year in June, the CC Index was at +25.
One month ago, on this post Lowest sales this millenium, I predicted SFH median price would be below $398,000 by October. Do you think it will take that long?
As interest rates rise, more people are selling their properties - and diving into rentals, driving up rents as well. When everyone becomes a renter, who will the landlords be? Read more in the Globe and Mail Homeowners sell, start renting instead
…but don’t be a hypocrite
The following quotes are from the moderator of "Alberta’s most popular real estate blog"(aka Edmonton Housing Bust):
“and for the most part these ‘forecasts’ and ‘industry experts’ go unquestioned”
“I suspect there was little consideration for the numbers they pulled out of their ass last month, when they yanked them out this month.”
“I guess what struck me is that this is the first real main stream article to really take the real estate industry to task for their so called “forecasts” and statistics, and in many cases just flat out calls them out.”
Now, you’d suspect anyone pointing fingers so blatantly would be the first to hold himself accountable, right? The moderator of that blog would be the first to look at his own forecasts and their outcomes? Hold yourself to a higher standard and all that?
Especially after promising “we’ll review them as the year goes on," while never missing an opportunity to review the other guys' forecasts?
The forgotten review
Let's do it now and see what transpired:
The average price of SFH in Edmonton increased 4% in 2009, and here were the predictions:
Edmonton Single Family Home prices |
| Prediction for 2009 | Error |
Kevin at Edmonton Housing Bust blog | -14% | 18% |
Canadian Real Estate Association | -9% | 13% |
CMHC | -5% | 9% |
ReMax | 0% | 4% |
Edmonton Real Estate Board | 0% | 4% |
It turns out CREA, CMHC, ReMax, and EREB were all more accurate than Edmonton Housing Bust. After dozens of posts slamming the real estate industry and the media, maybe in the interest of fairness we would have seen one lonely post about the outcome of those predictions?
If I make a prediction it will be diarized and flagged in everyone’s calendar and blackberry. When the magic day arrives, it will be analyzed, dissected, and slap-chopped by the blogosphere. If I'm wrong, I'm toast. If I'm right, I'm still toast. Bubble bloggers have contorted themselves into pretzels to try and prove my predictions were wrong, even when they were correct.
Talk is cheap…when you’re anonymous
Every industry has its challenges and problems and should be held accountable(especially offshore oil drilling!). The internet has become a great tool, but it is also a “bully pulpit” for people who have an agenda. Worse, they’re anonymous and unaccountable. It’s easy to be an authority when no one can question you, and when you don't have to put your name behind it. If they do question, it gets deleted.
One thing most bloggers don't seem to understand is that the mainstream media will only publish material for which they have a source - a real person, with a real name. If you want to be taken seriously, quit hiding and put yourself out there. If you don't have the confidence to identify yourself, and stand behind your words, then you have no credibility in the eyes of the public. (That's why I have some respect for guys like Garth Turner.)
The next question which arises is "Where are all those discerning, critical, readers?" Fanatical followers who think theirs is the one and only true way, and they reinforce the moderator’s opinions by supporting them and never questioning. Similar to people who think their religion is the only sure way to get to heaven(I have news for all of you…LOL).
It's scary to think that not one person on Alberta's most popular real estate blog had the vigilance to ask the question. Perhaps they are too busy being indignant and self-righteous.
So blast away at the real estate industry and media. I’m not defending them. But don’t be a hypocrite about it.
Admitting you were wrong keeps you humble, too. Like me.
http://edmontonhousingbust.com/2009/01/forecasts-09-part-one/
As a kindred spirit, I have a lot of empathy for Garth Turner and his blogging endeavours. It appears that even he feels the frustration that can beset you when you're a popular blog moderator. In case you missed it, here was his "apology" posting: http://www.greaterfool.ca/2010/06/11/im-sorry-not/ He writes: "Instead of discussing, they attack. Rather than accepting another view, they trash the person holding it." Know anyone like that?
The nutbars come with the territory, but I have to admit I had no inkling there were so many scary and unbalanced people walking amongst us. The chaos and disrespect of the internet is a good example of what will happen if civilization ever breaks down. I sincerely hope that anarchy never occurs because all these lunatics will have free rein.
I imagine most of these people in real life are spineless cowards, emboldened only by the anonymity of the internet, but it shows what's incubating in their minds. I have a better understanding of why Garth was advocating bunkers and canned food.
It's discouraging to bloggers such as myself, and I'm sure Garth too, when you try to enlighten, educate, give insight, and offer ideas and information which you otherwise wouldn't get through the normal channels, and get attacked for the effort. As I said, no good deed goes unpunished.
Sure, he has books to sell, but I am convinced that he's concerned with a higher purpose than mere profit. Money Road
I just finished reading Turner's latest book, Money Road. It was easy reading, has lots of good advice, and I would highly recommend it. Concerning real estate, there's one thing I'd have to agree with him on "the impact of higher energy costs on real estate preferences will be similar to that of an aging population, as smaller homes replace two decades of wasteful mini-mansions. It's not hard to see a great future for tight, affordable, manageable bungalows and townhouses in good urban neighborhoods with access to public transit."
I think we've previously heard that mantra from our regular blogger Worldclass.
And Garth, there were two spelling mistakes in the book.
The contest "How much will it sell for" is unceremoniously and prematurely over. The sellers have taken the Inglewood house off the market after 35 days. Rather than reduce the price, they are going to continue renting it out. We had five showings, all in the first week. One week after we listed this house, a very similar house came on the market for $350,000 and sold for $330,000.
We're still going to give away the prize. We put all the names in a hat and the lucky winner is Dag. Thanks to everyone who entered.
It's enlightening to look at the statistics for Inglewood(and very discouraging if you're a seller):
20 active listings with an average DOM(counting relists) of 114. There's been a total of 31 price reductions among the 20 listings.
3 homes have sold in the past 30 days for an absorption rate of 6.7(that's a 201-day supply of homes).
One listing has been on the market for 786 days.
Another listing has had 8 price reductions.
This begs the question, how many of those 6000 SFH listings are similar to this? If the seller can't get their price, will they simply vanish from the inventory? Or do you think most sellers will be more desperate and lower their price?
We're on schedule to have the lowest number of May single family home sales since the beginning of the new millenium. For the period May 1 - 25, there are 1033 sales. The next closest was 2008 with 1056. The highest was 2006 with 1627.
New listings for the same period are third-highest.
CCI
The Crash/Confidence Index(CCI) is at -35 today. History tells us that a negative number for the CCI is a predictor of lower median prices. If the CCI remains 100% accurate, we should see a median price below $398,000 by October. That would be a drop of $22,000, or 5%, from today's median of $420,000.
It seems contradictory to be predicting lower prices than January's, when the average price today is higher than it's been at any time except for the halcyon days of 2007, and it has risen $40,000 this year(9%). The influx of new listings, combined with all-time low sales, is leading to a glut of inventory which should put a lot of downward pressure on prices.
Stats to Obsess Over
2010 compared to the historic average(9 yrs):
For single family homes
|
|
Sales
(A) | New listings (B) | Crash Index A-B |
May 1 – 14
| -16% | +20% | -36 |
Apr
| -19% | +25% | -44 |
March
| -14% | +20% | -34 |
Feb
| -24% | +3% | -27 |
Jan
| -29% | -15% | -14 |
Crash Index: The lower the number, the more likely we’re heading for a crash. |
Highest avg price in 2 years
The 30-day average price reached a new high yesterday at $476,243. Lots of million dollar sales have ramped it up. The median price, which I put a lot more credence in, has not changed much at all this month.
RE: How much will it sell for?(previous thread)
You're welcome to send in guesses. I'll keep it updated.