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Re: You buy a house for half a million dollars and...

jsan33 — Sat, 10 Apr 2010 10:43:04 -0000

Canadian housing Boom Boom (crash) around the corner. Everyone with even a shred of intelligence understands that Canada is on the edge of our very own housing crash. I have read blog after Blog from the US that states that Canadians are in the very same state of delusion that gripped the US before their housing crash. It's too bad some Canadians just can't see what is so plainly obvious to the rest of us. The Canadian government through the CMHC can only keep this bubble inflated for a little while longer. Market forces will eventually take over.

http://market-ticker.dennin...

http://blogs.reuters.com/ro...

Re: You buy a house for half a million dollars and...

jsan33 — Fri, 09 Apr 2010 20:43:47 -0000

I usually don't pay any attention to this but I noticed over the last little while Edmonton's Real Estate inventory just keeps climbing and climbing.

This Blog has died pretty much because it is not being updated. If it were once again updated regularly, people would probably come back.

Re: You buy a house for half a million dollars and...

jsan33 — Mon, 05 Apr 2010 19:41:15 -0000

Many home owners should have rented. “The cover of Your Money Milestones: A Guide to Making the 9 Most Important Financial Decisions of Your Life, written by Moshe Milevsky

A strong argument can be made that it makes sense to buy your first home at the age of 50, after renting for 25 years, writes Moshe Milevsky”

Many homeowners should have rented

Re: You buy a house for half a million dollars and...

jsan33 — Mon, 22 Mar 2010 12:49:41 -0000

To add to my post above, the increase in personal debt is staggering. Oh yes, this should make for a strong economy going forward.

- Credit card balances are up 458% in 11 years.

- In 1999, outstanding residential mortgage debt was $399 billion. Eleven years later, it has expanded by 242% to $965 billion.

- Home equity lines of credit have become the drug of choice for Canadian consumers. They use them to finance everything from cars to furniture to home renovations, and of course, mortgages.
Between 1999-2010, lines of credit grew 820% to $205 billion.

- By the end of 2010, Canada's household debt-to-disposable income will be roughly 155% (currently 146%).

The Country of Fiscal Prudence

Awash in a sea of debt

Re: You buy a house for half a million dollars and...

jsan33 — Mon, 22 Mar 2010 12:45:39 -0000

Here are some interesting links if you haven't seen them before. They really emphasize why we have a housing Bubble. They also really show how the Canadian public has gone from a fiscally responsible group with decent savings to an all out spending frenzy. Is it any wonder why we have a housing spike in most of Canada during a recession? This goes against all logic yet it happened. What we have is clearly a made in Canada, engineered by the Conservatives housing Bubble. The CMHC and once in a generation low interest rates was the carrot, a generation of very naive and fiscally foolish new home buyers were the prey.

Again, the demise of this bubble becomes more obvious as the foundation being used to grow it is possibly the weakest foundation that you can have. When you have roughly 90-95% of the mortgages all securitized CMHC mortgages, you realize that hose who are buying are the ones who can afford it the least.

Canada Moral Hazard Corp.

CMHC: Canada\'s Freddie and Fannie?

Re: You buy a house for half a million dollars and...

jsan33 — Mon, 22 Mar 2010 12:25:42 -0000

Ok, you tell me why inventory begins to spike up when the fear of prices hitting peaks begins to grow? Who would be selling if they actually own the house to live in? Are they trying to sell at peak because they want to move up to a different house? Wouldn't they first buy the new house than sell so that they would not be homeless during the transition? This should create more even numbers.

You sound pretty angry for someone who purchased their house in 1995? There should be much less emotion in the housing market, the problem is Bubbles drive up the fear levels. This is easily understandable because history shows just how painful a bubble can be for those who unwisely bought at the peaks.

Too many amateurs are investing in Real Estate. Just as in stocks, the professionals are selling as the strength peaks but more importantly before it peaks while the amateurs are buying. If anyone thinks that there is more upside at this point than there is downside, they are clearly amateurs.

Affordability rules and a neutered CMHC thanks to their ballooning insured debt levels means that eventually the CMHC taps will have to be shut off or shut down significantly. Higher interest rates added to the mix means that the only thing left to increase the affordability of housing is lower prices, gravity than takes over.

Re: You buy a house for half a million dollars and...

jsan33 — Mon, 22 Mar 2010 00:45:30 -0000

I don't pay too much attention to the numbers but it sure seems like the Edmonton housing inventory is getting rather high again? What, are the Flippers....I mean "investors" starting to get nervous and trying to bail?

Re: You buy a house for half a million dollars and...

jsan33 — Tue, 23 Feb 2010 21:47:37 -0000

Disaster economics seems to be the common theme among governments. For them to think that they can use debt to strengthen an economy that is already down and out ....Because of HUGE debt.... is beyond irrational. It's Keynesianism gone mad!

Buffett's Partner: 'It's Over' for U.S. Economy

Deathbed of Keynesian Economics Will Be in U.K.: Matthew Lynn

Re: You buy a house for half a million dollars and...

jsan33 — Mon, 22 Feb 2010 20:23:54 -0000

I'm Conservative, quite conservative but I will call a spade a spade. It is bad enough that the Conservatives changed the qualification rules to make getting a mortgage considerably easier. It's bad enough that they keep raising the CMHC ceiling so that more subprime loans can be pumped out and more risk is given to the tax payers and taken away from the banks. What they did twice last fall was the final straw in my books. To actually go to the banks and buy 75 Billion dollars worth of mortgages from them just so they could be free to pump out more mortgages.

There is absolutely no denying it, the Conservatives were hell bent on creating and pushing the bubble to levels not seen before. Why? Were they trying to goose the economy on the backs of the housing sector to make their party look good? They have to know that it will end just as it ended in the US. It is following an almost identical path. Or are they trying to bring this economy to it's knees? Usher in a North American Union such as the EU? What they are doing just makes no sense to me? Can they be this reckless?

From last fall:
Ottawa to buy $50B in mortgages, hopes to spur loans

Re: You buy a house for half a million dollars and...

jsan33 — Sun, 21 Feb 2010 02:09:30 -0000

I have no idea whether or not the Liberals would have done better or worse (the NDP would have been a disaster) but when you look at the track record of the Conservatives regarding housing they pretty much created the perfect storm. When they got into office they brought in the zero down 40 year mortgage. They than raised the CMHC limit from 100 Billion to 200 Billion. This was quickly reached as they stoked the flames of the housing market and proceeded to raise the limit by another 150 Billion. We are now at around half a Trillion dollars worth of government backed mortgages all under the watch of the Conservatives.

If this is not a policy that literally poured jet fuel on the housing market nothing is. Definitely rock bottom interest rates is a huge part of it but without the very willing backing of the CMHC, I can absolutely guarantee you that the banks would not be allowing such large mortgages. They are not stupid, but they realize that if the government (tax payers) are willing to let people take mortgages up to 3x larger than they used to allow, why not. There is no risk to them, it is a win win situation for the banks.

Re: You buy a house for half a million dollars and...

jsan33 — Sat, 20 Feb 2010 13:13:51 -0000

Here is a Wall Street Journal article from last year that shows just how the US National Association of Realtors and their chief economist at the time played the game.

Realtor groups and associations should have no national voice as they are purely biased to the upside. It means more money for them.

Canada is no different. Our Realtors and Realtor Association are the same bunch of snake oil salesman that unfortunately the public get most of their home buying misinformation from.

http://online.wsj.com/artic...

Re: You buy a house for half a million dollars and...

jsan33 — Sat, 20 Feb 2010 12:49:11 -0000

The strength in Real Estate over the last year really has been grossly exaggerated thanks to Toronto and Vancouver. There is no doubt that their prices have taken quite a leap up. Calgary prices have rebounded a little bit while Edmonton prices year over year are actually down. One of the few places in Canada where prices have actually continued to drop year over year.

Thanks to the Conservatives and their disastrous housing policies ever since they came into power from allowing zero down 40 year amortization mortgages and to raising the CMHC debt ceiling by hundred 's of Billions and ordering looser qualifications, we have seen a Bubble in Real Estate. Add to this interest rate levels that we have possibly never seen as low in Canada before and what did people expect, housing to slow down?

But, as stated a thousand times, this game will not go one forever. It can't. The amount of loans doled out by the CMHC (Canadian Tax payer) over the last couple years is staggering. This cannot continue forever. We are holding half a TRILLION dollars in mortgage guarantees. They will have to without question close the taps one of these days.

Dave Rutherford interviewed a fellow from the Fraser Institute this week. He said that he is very concerened about the level of securitized mortgages that the governmnet is now holding and he also said the government needs to get out of the business of mortgages. Without question if this were to happen, home prices would come crashing down as there is NO WAY the banks would be handing out the size of loans they are currently handing out if the risk was their own and not the Canadian tax payers as it currently stands.

The Conservatives royally screwed up and created a housing mess and more Conservative voters such as my self need to realize this.

Housing Bubble brought to you by the Conservative Party of Canada

How Harper Gov't Pushed Financial Deregulation Here, Abroad

Canada's sub-prime mortgage time bomb

Re: You buy a house for half a million dollars and...

jsan33 — Mon, 15 Feb 2010 21:38:32 -0000

New mortgage rules are coming, announcement tomorrow. I really wonder how serious this government will be considering they created the mess.

Ottawa ready to tighten mortgage rules

Re: You buy a house for half a million dollars and...

jsan33 — Tue, 09 Feb 2010 22:18:41 -0000

In my opinion, the politicians absolutely know that there is a bubble and that it will burst. Just like in the US. It is all about politics. The Conservatives game was to inflate the housing bubble as hard as they could which just like in the US, gave a temporary boost to a faltering economy. They know full well that when it ends, it will end as bad as it did in the US.

It is a short term game to try to gain more votes and if they are really lucky a majority. This is what politics has become. It is less to do with the long term health of a nation and almost everything to do with the short term health of their parties and their careers.

They are already saying that Vancouver has reached the peak of affordability. This is with interest rates at levels that are pretty much as low as they can go. The only thing currently keeping the bottom from dropping out is the fact that interest rates have not yet budged up.

What they have done over the last year is basically taken a bubble and filled it full of hydrogen. They have pulled what would have been future home buyers into the present and have allowed those that probably would not have qualified to temporarily rent a house from the bank.

Re: You buy a house for half a million dollars and...

jsan33 — Sat, 06 Feb 2010 12:32:05 -0000

This really shows how phony China's economy really has been. It has basically been an economy juiced by huge government stimulus and poor lending standards. When the banks throw money around you will see growth but it eventually comes to a screeching halt.

China Defaulting Loans Soar, Insolvency Lawyer Says

Re: You buy a house for half a million dollars and...

jsan33 — Sat, 06 Feb 2010 12:24:08 -0000

You know there is a problem in the housing industry when even the big banks suggest that prices are getting out of control. It's time for this insanity to be brought back down to earth.

Honestly, the Conservatives have really helped create this housing mess. I say this as a Conservative. It's now time for them to bring it under control and reign it in.

Big Six banks urge Ottawa to tighten mortgage rules

Re: Weekend Open Thread

jsan33 — Thu, 28 Jan 2010 20:06:38 -0000

So much for some Americans walking away from their mortgage. I guess the term "signing your life away" fits when it comes to a mortgage.

Lenders Pursue Mortgage Payoffs Long After Homeowners Default

Re: Weekend Open Thread

jsan33 — Mon, 25 Jan 2010 20:52:48 -0000

This is what happens when a government tries to entice people back into the market. It draws in allot of what would be future home buyers. Sort of like what has taken place here in Canada over the last year or two. What happens when you suck future home buyers into the present lured by temporary cheap rates and easy CMHC qualification? It takes away allot of home buyers from the future so when the shoe finally drops, it drops hard.

"US sales of previously occupied homes took the largest monthly drop in more than 40 years last month"

December home sales down nearly 17 percent

Re: Weekend Open Thread

jsan33 — Mon, 25 Jan 2010 20:46:52 -0000

At least one large Oil company has had their fill of the Tar Sands.

"Shell will dramatically slow its future growth in the Fort McMurray area....."

High oil sands costs driving Shell elsewhere

Re: Weekend Open Thread

jsan33 — Mon, 25 Jan 2010 20:44:36 -0000

I thought by number one you meant they were the most affordable. That is until I looked at the graph. Vancouver sure is number one. Number one in the list of the least affordable places on this planet (or at least for the countries on the list). But don't forget, Vancouver has run out of land because it is on the ocean......oh wait a minute, so are half the cities on the list.

Re: Weekend Open Thread

jsan33 — Sun, 24 Jan 2010 14:10:52 -0000

- Interest rates are at the lowest level in a Century. They are not normal rates, they are temporary "emergency" rates.
- CMHC have been backing more mortgages (due to government order) in the last couple of years than in there entire 57 year existence before this. They will eventually hit the wall as our CMHC backed debt hits dangerous levels.
- Canadian household debt has hit record levels never seen before.
- Governments have taken on staggering levels of debt which will force huge future cutbacks, higher costs for households and possibly higher taxes.
- Huge stimulus spending has given the economy a smaller than expected sugar hit with little left to sustain the economy when the stimulus ends.
- All of this worldwide government debt is sure to push up future interest rates as governments compete with each other to try to get others to fund their debt.
- Baby Boomers are set to start retiring en masse. government tax revenue will drop while Canada Pension and medicare costs will soar. The baby boomers will be going into retirement mode and will most likely start downsizing and spending much less.
- The US is for the most part broke. States and cities around the US are out of money. Unemployment in the US is much higher than the official numbers. The US is economically toast.
- China's economy has been stimulated into a Bubble. They have been building cities that sit empty and allot of people are expecting their economy to crash or at the least come to a grinding halt.
- Many countries in Europe are broke.
etc. etc. etc.

The last 10 to 20 years were driven by totally fabricated debt and credit driven economies. Everyone was buying new houses, new cars, houses filled with all of the latest toys and electronics, trips, basically living high on the Hog. How could they?? Credit, Credit, Credit. Home equity loans, multiple credit cards etc. We have now hit the wall. families are barely making ends meet and this is at a time of emergency level (temporarily low) interest rates. Many will be wiped out if rates even pop up a little.

House prices in Canada never ever should have gone to the levels they are currently at. I see nothing on the horizon that would sustain these prices. How far can they drop? Just look at past Bubbles (US, Japan, Spain, etc.) and you will see that they can drop like a stone and never recover.

It is different this time, we have spent our way into an historic economic hole and there is no easy or quick way to dig ourselves out.

The GDP numbers in the US for the last quarter will probably look quite good when they come out. This will be due to the massive stimulus spending (cash for clunkers, new home buyer rebate, etc. etc) and due to the fact that companies were rebuilding very low inventories. The big question and fear is what comes after this? What is left to drive the numbers?

Re: And then they'll say they never saw it coming

jsan33 — Sun, 17 Jan 2010 21:12:41 -0000

Honestly, nobody likes to see this because allot of people and families are getting hurt but it is a reflection of a continuing to slow Alberta economy. I am not cheering on pain in this Blog, I am cheering on affordable housing and hopefully the end of real estate speculators.

I won't lose any sleep if the speculators lose their shirts. They profit at the expense of families and individuals who can least afford it. They are due for a bad karma hit just like their US speculator counterparts.

150 jobs lost as Edmonton drill maker shuts factory

Re: And then they'll say they never saw it coming

jsan33 — Sun, 17 Jan 2010 21:07:00 -0000

Does anyone know what the commercial vacancy rate is in Edmonton? I have mentioned this before but I am shocked at how many for Lease signs there are in front of commercial strips here in Edmonton. There are allot on the main drags but when you get off onto the side streets practically every building has a for Lease sign out front. I have never seen so many for lease signs.

Re: And then they'll say they never saw it coming

jsan33 — Sun, 17 Jan 2010 20:56:06 -0000

Don't worry, China will save the world or so the chant went. It should seem obvious to most people that after a Boom, you always get a Bust. After torrid growth, on the other side comes the inevitable bust followed by years of no growth or stagnant growth.

I think allot of the real estate "investors" that have jumped into the market over the last several years just do not understand this concept. They mistakenly believe that after skyrocketing growth, there is a pullback followed by more skyrocketing growth......or so their "get rich in real estate" manual led them to believe.

Crisis expert says China's boom to end soon

Re: And then they'll say they never saw it coming

jsan33 — Fri, 15 Jan 2010 20:14:14 -0000

This is one of Obama's promises when he was campaigning. Of course those that make their money by oil speculation will howl and say it won't solve anything but I have been hearing how there has a been a TON of speculative cash moving back into oil over the last several months. Many have said that the current price is absolutely no reflection of the current demand which has actually been dropping in the US and is once again speculation driven.

Watchdog okays plan to rein in oil speculators