Category Archives: Fearmongers

False prophets of doom: Garth Turner and Ross Kay

Trust me1After reading this, you could be forgiven for thinking the headline should have been False “profits” of doom.

Garth Turner’s been wrong about the Calgary housing market for six years. When asked about previous predictions which have not panned out, he either denies that he ever made them, despite hard evidence of the written word(HIS written word), or he shrugs it off and blames his readers for being gullible enough to believe him. His blunders have been well-documented on this blog. My blog stats show the most-read blog post this year has been Garth Turner’s track record speaks for itself.

Trust me4He can get away with spouting poorly investigated pronouncements because of his entertaining writing style, and the unquestioning audience who believe him to be the housing-crash messiah.

Turner praises Ross Kay who makes unsubstantiated claims about Calgary real estate data. I’ve repeatedly asked Ross Kay for the infamous list of 317 sales which he claims were double-counted. He will not provide his data. He will not give his methodology. He finally got perturbed by my requests and sent me this final email: “This will be the last communication on this topic.”

Trust me2The onus isn’t on CREB. Kay is the one making accusations, therefore he should provide the 317 “private sales” to start with.  How convenient that he won’t, right?  He claims on his website that he’s not restricted by CREA or other regulations. He won’t provide the evidence because then he’d be giving his accusers evidence that he’s full of crap.


Ross Kay will sell you the “interpretation” of this “secret” data, but not the data itself

What the heck is Ross Kay’s motivation for being interested in the Calgary real estate market? How does he come up with his data? He has no direct access to the database, so where does he get his information? He boasts that it’s triple-verified. By who? Kay has not come through with any evidence to back his claims, but wait, could this be his reason, as he states on his website: “The only accurate interpretation of this data can come from RossKay.com.”  Translation: he’ll sell you the “interpretation” of the real data, but you will never actually see the hard numbers or the methodology. Anyone can make up numbers, but I would have to give him full marks for entrepreneurship and actually attempting to sell them.

Ross Kay is unburdened by data, evidence, or transparency

Ross Kay criticizes the credibility of CREB, yet he will not disclose his data. Ross Kay claims on his website that he is an advocate of open and full disclosure. How does he justify that dissonance?

Turner has a history of creating frankenumbers and questionable data, so it should be no surprise that he’s in bed with Ross Kay.

Ross Kay states on his website: RossKay.com is independent of any and all fiduciary duties related to MLS® data allowing for full independence, open and full disclosure and finally data review that is statistically valid.

Ross Kay, let’s have the open and full disclosure.

“Good news like strong home sales is potentially bad”

Skeletons2Anyone who’s followed the forecasts of the well-educated economists,  the pundits like Garth Turner, crazed attention-seeking bubble bloggers, or lowly realtors, the housing market predictions have been a comedy of errors(except for the realtors). Most would excel at being contortionists. Reversing direction so many times has produced dizziness and clouded analysis(see quote on blog header from Calgary Rip-off).

Porter: Strong sales means we’re drunk

The graveyard of bubble blogs

The graveyard of bubble blogs

All the bases are now covered. After reading for eons from guys like Garth Turner that the precursor to a crash is lower sales combined with higher prices, we now have Bank of Montreal chief economist Douglas Porter taking the opposite view, saying strong sales are bad news. “Canadians are already drunk on housing, so imbibing more means the inevitable hangover will be all that much worse.”

Madani: Persistent, consistent, and always wrong

“It’s astonishing to me that people are not picking up on this. If you see volumes crash and prices still rising, you shouldn’t be thinking everything is fine, you should see that as a warning sign.” David Madani from Capital Economics has been predicting a 25% drop in prices every year for as long as I can remember, and true to form, he’s back with the same prediction. I won’t be too hard on him, however, since he’s a Bugs Bunny fan. “Homebuilders are having a Wile E. Coyote moment” as when the perpetually ill-starred cartoon character realizes he has overshot the cliff and looks down to see nothing but air under his feet.

lucy-footballGarth Turner: I didn’t say crash

If Garth were a cartoon character, it would have to be Charlie Brown. He’s been ready to kick the football many times, only to have it pulled away at the last second, time and time again. Every year, some new development is the harbinger of the long-awaited crash: Higher interest rates. 35-year amortizations. Mandatory 5% down payments. 30-year amortizations. Unemployment. 25-year amortizations. Lack of first-time buyers. Now, this year, the silver bullet is the recent capping of CMHC guarantees. For six years he’s been lining up in anticipation of a big score, but rather than kicking the ball through the goal posts, he’s tripped at the line of scrimmage.

Most predictions could have been made by a monkey(Photo from the GreaterFool.ca)

Most predictions could have been made by a monkey(Photo from the GreaterFool.ca)

His futility has resulted in him saying that he never wanted to kick the ball in the first place. When confronted with the truth, he blames the victims for listening to him: “it was your decision.” Never one to be encumbered by facts, he has managed to keep a loyal following with his fantastic writing ability, sexual connotations, and lewd pictures. If nothing else, he knows that sex sells, understands herd mentality, and that people easily forget. In other words, he’s another Smoking Man but with good grammar and spelling, but not as intelligent. Cult followers have a difficult time thinking for themselves, but they should pay attention to these 10 warning signs. For example, #4  “Unreasonable fear about the outside world, such as impending catastrophe, evil conspiracies.” Yikes.

From the Calgary Herald: Canadians appear to be drunk on housing and approaching a hangover

Garth Turner’s track record speaks for itself

Does Garth really drive a Harley? Can we believe anything he says?

Does Garth really drive a Harley? Can we believe anything he says?

The tone of the  comments on Garth Turner’s GreaterFool.ca has taken a pronounced turn. Many readers(and many more whose comments were deleted by Garth) of his blog have finally realized the emperor has no clothes. His long-awaited, much-anticipated housing crash didn’t occur. Garth now denies that he ever predicted a crash, despite writing a book entitled “After the Crash.” The peasants are becoming restless with the never-ending promises of ultra-low house prices. Promises which never become Garth’s fabled houseageddon. Some recent comments which would have been anathema a few years ago…

If your financial advice was half as good as your writing, I’d be buying a nice place in calgary for 360k, not 500k.

I want prices to fall, but its not falling at this point. It’s not as bad as Garth makes it seems. 

Spin it any way you like, over 8,000 sales in July for the GTA is a strong month and hardly an indicator of a collapsing housing market. 

The truth is that individuals who have been waiting on the sidelines for this event to occur have unfortunately lost an opportunity this time out.

Why is it when anyone posts an opposing view here that they get attacked, called names and chant delete him, delete him? 5 years and waiting for the big collapse maybe a tad frustrating? 

If anything, guys like Garth and Peter Schiff that keep calling for crashes just cause others to lose money by waiting for ever.

I’ve been waiting since 2006 for this mythical crash. Maybe in 2053?

Garth there are no signs that real estate is going down at this time in toronto…..after all these mortgage changes it still has held up…..if it is harder to buy now then why after one year has there not been serious cracks in the market…

And the wait continues and the predictions continue to be incorrect. 

When will prices be at the same point of when this blog started?

The resiliency of the market has stunned many experts over the past few years – I believe the best advice is to just to get on with your life, and view “Nostradamus type predictions” as “for entertainment purposes only”.

Remember when Garth was selling survival gear and squirrel recipes? Now pretending it never happened: http://shop.xurbia.ca/

Garth’s realtorhate is running at a fever pitch. He now has a knee-jerk reaction to any commenter who disagrees with him. In adition to accusing them of being a realtor, he also calls them liars. Lashing out, making assumptions that are insulting and judgemental, could be a sign that he’s losing his grip.

Turner is a harsh critic of the media, but he forgets that at one time, he was quite happy to take money for advertising which today would be classified as “advertorials.”

  • Paying for time:
  • Wendy Mesley of CBC: I just wanted to ask you one question about how many financial links there can be to people on your show before it starts to get sticky.       Garth Turner: I’ll only answer that by way of saying that, ah, because we’re not the CBC and we don’t get money given to us, that we have to run a business for which revenues are generated and the bulk of the revenues are generated by selling sponsorships and advertising and what we call billboards.

His yearly predictions have been notoriously incorrect, with real estate boards across the country coming through year after year with more accurate forecasts. A pattern of making incorrect predictions.

Okay, so no crash. How about a correction and slow melt? Well, maybe lowering the amortization from 40 to 25 years should do it. Requiring a 5% down payment will most certainly bring it on. Sorry. Finally, a new silver bullet comes to the rescue. Monday’s announcement of a cap on CMHC guarantees will prove to be the catalyst. Garth hopes.

Turner is obviously feeling the heat. He had the misfortune of getting into a twitter battle with Calgary’s(maybe even Canada’s) top real estate stats guy, one person who Garth should never tangle with, because he will always come out looking second-best:  http://calgaryrealestatereview.com/2013/08/05/garth-turner-attacks-media-reporting-real-estate/

  1. You entirely miss the point. The culprit is the media reporting. Your blog post attacking me is weird.

  2. @garthturner Not you, your tactics. Always spinning, cherry-picking, massaging stats. Schtick is wearing thin & people seeing through you

  3. @MikeFotiou Mike: No smart person builds business by tearing down others. Your blog post will make no difference to me, quite a bit to you.

  4. @garthturner People want and deserve the truth. Your credibility outside your echo-chamber blog is waning. Was just some friendly advice.

  5. @MikeFotiou You, sir, are no judge of my credibility.

  6. @garthturner You’re absolutely right, my apologies. Your track record speaks for itself.

Five years later, what are they saying?

Garth Turner, the GreaterFool

In 2008, when he wasn’t mercilessly insulting realtors, he was touring the country, pounding the table and adamantly advising everyone to refrain from buying a house. He even published a book entitled “After the Crash.” Now he blames the victims of his advice:

  • Here’s what he said Oct 28, 2008: “I forecast a minimum valuation drop of 15% in Toronto and 40% in the West.”A 40% drop would mean a median price of $234,000. Today’s median is $440,000. Epic fail.
  • “You will be basically unable to sell your home.” In Calgary, there’s such low inventory, you are “basically” unable to buy a home. 

Calgary Rip-Off

The following came from a notorious Calgary-hater who posted on my blog many times saying how he detested Calgarians and that he would never buy a house here. Five years, ago he said:

  • “My wife seems to think there wont be a bad crash in Calgary, and that the median wont correct to $250K. We had a big argument about this. I think it will crash hard by what I am seeing.”

    Somewhere he reversed direction:
  • “Dont wait in hopes that prices will come down because in Calgary you will wait forever.” – Calgary Rip-Off, proud Calgary home-owner http://www.greaterfool.ca/2013/07/23/aliens/

He doesn’t agree with his buddy Garth:

  • “The only thing ridiculous(about Calgary) is housing. And the argument that you can force house prices down by not buying is nonsense. “

The Economist: “Canadian housing bubble set to burst”

…and here’s a comment from a reader:

‘The problem with all this talk of a “bubble bursting” in the Canadian real estate market is that the Economist have been saying this for many years now. How many years will they keep this up until it actually happens?..’

Read more Canadian housing bubble set to burst

RBC has a completely different take on the situation:

Calgary-area buyers continue to benefit from a strong provincial economy,  accelerating population growth and attractive affordability,” said Craig Wright,  senior vice-president and chief economist, RBC. “RBC (affordability) measures  for Calgary compare favourably against both historical norms and the national  average, keeping it one of the more affordable housing markets in Canada.”

Read more:  Calgary more affordable

“…the beginning of the end in Cowtown.”

Overheard on greaterfool.ca on April 1:  “It is not a bed of roses in Cowtown just wait and see over the next 2 mths.”

crocus2The 6% drop in sales in March is intoxicating to the doomers who can’t contain their excitement at seeing Calgary finally meeting the same fate as Toronto and Vancouver.  Even this insignificant blip created hysteria among the bubble bloggers, who are conveniently blinded to the realities of accurate data.

From a salivating Garth Turner this prediction: “… the beginning of the end in Cowtown.”

It’s been annoying and irritating to Turner to see the stability of the Calgary market, given his distaste of Alberta. In his frenzy to see Calgary crash, he’s conveniently forgetting that he once said, “one month means nothing.”

As for his credibility, Garth also predicted in 2008 Real estate prices in Calgary, Edmonton, Fort Mac at 50% of 2006 levels. ” That would put our average price at $200,000. Today it’s over $500,000.

Most fail to mention that new listings have been down, year-to-year, for 10 consecutive months, or that homes were at record high prices in March. How do you buy a house when there’s nothing coming on the market that appeals to you, or is in your price range?

April will be the first month where we see an increase in new listings,  Y to Y,  since May 2012. More selection will hopefully result in a moderation of the prices, also resulting in increasing sales.

To April 6, new listings are up 13% compared to the 3-year average, and up  5% compared to last year.

Spring will bring more listings, lower prices, more sales. It may not be a bed of roses, but crocuses are beautiful, too.

Calgary housing prices and sales on the rise in September

Only three days ago, we read in the Calgary Herald, Calgary housing prices and sales on the decline in September. This headline made front page news on the doomer blogs.

The bubble bloggers took this as a sign that Calgary was joining Toronto and Vancouver on the road to real estate Armageddon. What a difference 3 days can make. I can guarantee that you won’t be seeing any links posted to my headline on the fearmonger’s blogs. They’re not interested in enlightenment or accurate statistics. They prefer to reinforce their agenda with selective data which reinforces their group-think.

What should be of greatest concern is that the housing market in Calgary has a shortage of listings. Inventory is down 23% compared to last year. Can you imagine how much higher the sales increase would be if there was a better selection of homes for buyers?

Sucking and blowing

Have you noticed something missing from the bubble blogs over the past few days? Conspicuous by its absence?

When sales are robust and prices are climbing, it’s a daily occurrence to hear that the real estate board’s stats are unreliable. An untrustworthy source of information. You know, cooking the books.

Now that sales and prices are declining( a normal occurrence in summer), we never hear mention of it. Suddenly, the real estate board’s numbers are infallible. Impeccable, trustworthy, and incapable of error.

Sucking and blowing, both at the same time.

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It’s football season – again

Three times the mortgage rules have been tightened with little change in sales or prices in the Calgary market. Three times the blog dawgs were in a feeding frenzy for a few days. Three times they lined up to make the kick. Three times Lucy pulled the ball away.

For a fourth time, they’ve all lined up. What will be the result this time?

Go Stampeders!!(except when you play the ‘Riders :) )

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Examples of the trustworthy stats

A zealot from TheGreaterFool.ca, ironically with the name Questioning Calgary Stats left an anecdotal comment today: “Some comments on this blog provide examples of people who bought in Calgary in 2008, 2009, etc. and can only sell for a loss today.”

Let’s look at the facts. Over the past three days, 25 homes have sold which were puchased originally in 2008 – 2009. A total of 16 sold for more than the purchase price, or 64%. Not surprisingly, it appears that only the losers go to TheGreaterFool.ca.

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Bidding wars update

Over the past three days, 11% of homes sold for list price or higher. A tear-down in Rideau Park sold in one day for $30,100 over list. Selling price was $880,000.

In 282 years, Calgary home price will be $276,776

The Plunge-O-meter guy comes up with some totally bizarre predictions. He won’t be around to be accountable, but he predicts in the year 2294(yes, that’s 282 years from now), the average price in Calgary will be $276,776. It will drop an average of $66/mo for 3383 months. http://www.chpc.biz/plunge-o-meter.html

By comparison, he predicts the demise in Edmonton will be quick. In a short 23 years, Edmonton’s average price will be $216,187.