Category Archives: Greater Fool

Where will Calgarians be buying holiday homes?

The iconic Three Sisters near Canmore, AB

The iconic Three Sisters near Canmore, AB

An article in the Invermere, BC newspaper touches on the subject of real estate values in resort communities such as Canmore and Invermere. The reporter sought input from me and the reknowned expert Garth Turner of GreaterFool.ca fame. Columbia Valley Pioneer “Real estate market in valley may not be stable expert warns.”

The market in Canmore has turned around remarkably in the past six months. Inventory is low, attractive homes are selling quickly, and Calgarians are buying them up. Prices are on the increase.

Calgary prices post-flood

It’s enlightening to look back and see what the experts were predicting about Calgary real estate immediately after last June’s flooding. One got it right, one got it wrong. Mike has the details on his blog http://calgaryrealestatereview.com/2014/06/08/june-1-7-2014-calgary-real-estate-statistics-trends/

Waiting on Ross Kay’s open and full disclosure

ross-kay

Ross Kay

Ross Kay has made some claims, unsubstantiated, that CREB has engaged in double-reporting of sales. His allegations came to light in a recent blog posting on GreaterFool.ca., a blog written by Garth Turner.

I’ll be the first one to call out CREB if they have inconsistencies in their reporting. My first and foremost goal is to provide accurate statistics to my readers and clients.

Says Kay: “If CREB removes the 317 private sales in August not similarly counted last August, total sales are really up 14.24%, not 27.5%. And removing private sales from listing means there are only 6,447 active listings now – a 28.17% decrease.”

I’ve repeatedly asked Ross Kay for a list of the 317 sales. Crickets.

Ross Kay is an advocate of open and full disclosure. I say, bring it on!

ComFree, one of the largest FSBO brokerages that lists on MLS, weighs in. “CREB has included ComFree MLS® listings in its sales stats since we became a brokerage in 2012. And those listings that are only featured on ComFree.com (and do not include an MLS® listing) are not included in CREB’s stats and are not counted as “private sales…In August of 2012 our brokerage was already offering MLS® listings on REALTOR.ca to our sellers. So that certainly does not account for the rise in listings on REALTOR.ca in August 2013!” Calgary Real Estate Review

CREB has released this statement: One outspoken critic of organized real estate recently wrote a blog in which he questioned the integrity of the data at some real estate boards in Canada, including CREB®’s. CREB® would like to assure you that there is no significant double-reporting of sales in our MLS® System, nor is there any distortion of data involving the reporting of so-called “private sales”, as the blog’s author referred to them. “There is no such thing as a ‘private sale’ in the MLS® System – all sales are recorded and treated equally,” says Ann-Marie Lurie, CREB®’s chief economist.

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.”

Kay initially returned my emails but stopped when I asked him directly for his “317.”

“When pressed for hard numbers, he doesn’t respond”

The methodology by which Ross Kay has invented his secret frankenumbers is, as far as I can tell, known only to him. He’s  all too happy and quick to dish out vague allegations but when pressed for hard numbers, he doesn’t respond. He’s critical of CREB’s data, yet won’t disclose his method of collecting data, or the data itself. The media has been giving him a free ride with no hard questions.

As Garth said in the title of his blog posting, “Who can you trust?

My emails to Ross Kay requesting the info are reprinted below:

Oct 1: Are you going to provide this information so we can see what we’re missing?  I’ll take you at your word that it is for anyone to read. My readers are waiting. I’d rather that I have all the information so I can provide to my readers a proper and well-informed comment.  

 Sep 30, 2013: It’s easy to solve this issue. Could you send me a copy of the audit so we can all comment intelligently on it? It would be enlightening to know what we are overlooking.

Sep 28: You can put this controversy to rest by furnishing MLS numbers or addresses of the supposed 317 “private” sales that sold in Calgary for August. There’s nothing to hide, and there is no proprietary information if it’s already on MLS.

Image

Market update Sep 1 – 13, 2013

Inventory vs sales and price2

What were they predicting?

Jan 14, 2013 MacLean’s Magazine headline: “Inside the Great Real Estate Crash of 2013. The sudden cooling in Canada’s housing sector seemingly struck without warning.” WTH? Sales up 37%, price up 12%, is not exactly a sudden cooling. Overheated would be more accurate. MacLean’s Crash and Burn

Jan 2013 Ben Rabidoux, analyst, from the MacLean’s story: “The demand for oversized homes is expected to fall.” Calgary has already set a record in 2013 for the most million dollar homes sold in one year. Luxury home market breaks annual sales record

April 2013, Garth Turner of GreaterFool.ca blurted out this forecast: “The beginning of the end in Cowtown.” End of what, inventory? Garth has the audacity to say in this post “realtors lie.” If Garth can misconstrue realtors’ accurate predictions into lies, what does that make Garth? When bulls croak 

Two years ago, Garth  ejaculated: “That the Calgary market will crack is a given. It’s different here, until it isn’t. Which is soon.” So far, his crack has resulted in the median price being up $40,000. What did he mean by soon?

Dec 20, 2008, Garth said he “expects housing prices will plunge another 30 per cent next year –  on top of the 11 per cent drop so far this year.”  http://www.ctvnews.ca/garth-turner-says-hard-times-have-just-begun-for-canada-1.353465#ixzz2fpRqGVha

“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. “

Garth Turner – milking the gullible

Do not readI was alerted by Jeff to a number of recent comments on Garth Turner’s blog  trashing me.  Gratuitous untruths from anonymous cretins, as usual. As I’ve said before to Garth, “if he quits telling lies about me, I’ll quit telling the truth about him.” Garth gets upset when anyone holds him accountable for his misleading statements, and his way of fighting back is with more misleading statements. He likes to dish it out, but he can’t take it. Did you know that he once threatened to sue me? For someone who regularly insults and demeans people, he’s got a pretty thin skin.

Garth TurnerJimmy posted this comment a while back about Garth Turner and his blog. It will serve adequately as my rejoinder: “This pathetic blog truly is pathetic. I’m no realtor, and in fact I myself am hoping that real estate moderates. However, your repeated reminders of how you told us this or that would happen indicate a level of narcissism. The fact is, the housing decline you’ve been leading your impoverished followers to believe would happen for years has not materialized.

Garth gets his day off to a good start by reading my blog

Garth gets his day off to a good start by reading my blog

The mortgage rules changes will not induce correction — only a rise in rates will do that, and there’s not indication its going to happen any time soon. Face it — you have a legion of bitter, low-income wannabe home owners who would delight in the economy being trashed if it would mean that they could obtain a mansion in Bridal Path for $100,000. I don’t know who’s worse: the realtors or the bitter wannabes. Or maybe you are the biggest villain here for milking the gullible masses to suit your own ends, and for letting your ego and your need to be right get in the way of your message.

It was three months ago when Gartho predicted “…the beginning of the end in Cowtown.”  Since then we’ve had stable prices and increased sales.

The flood: for the record

Garth Turner has been notoriously wrong with his predictions about Calgary real estate. You’d think he’d know better…

CREB says…“While it might stave off a bit of activity on the sales from what we originally were thinking we were going to have for the rest of the year, I don’t think it’s going to be significant,” says real estate board economist Ann-Marie Lurie. “If there are less listings on the market because some of these properties are coming off, it actually could improve pricing activity in some of the other areas. You could actually see prices really continue to grow at the rates we’ve seen. So I wouldn’t expect much change there.”

Garth Turner(GreaterFool.ca) says…Then Calgary would be unique. Flood experience in other urban centres (like Brisbane in 2011) shows house values dropped by about 20% in affected areas, and as much as 60% for periods ranging between months and years. In fact in Brisbane (twice the population of Calgary) the average house price for the entire city – flooded or not – dipped between 10% and 30% for months after.

Other studies show that over a long period of time, there’s a flood discount, with properties that were underwater appreciating at a slower rate than those which stayed dry. http://www.greaterfool.ca/2013/06/24/the-deluge/

After his epic failings in the past, Garth has become quite reluctant to come out and make a definite prediction for Calgary, but it would seem in his contorted way that he’s predicting Calgary will follow in Brisbane’s footsteps with a 60% drop. No, a 20% drop. Sorry, I meant a 10% – 30% drop.

Update Aug 31, 2013: Stay renting. This is not the time to buy in Cowtown. -Garth Turner http://www.greaterfool.ca/2013/08/30/divine-guidance/

Garth “FrankenTurner”

When the data doesn’t agree with your agenda, there must be something inherently wrong with it. When the data agrees with your agenda, it’s infallible. A wonderful and poignant comment was posted on the GreaterFool.ca blog by my favourite character over there, Smoking Man:

#40Smoking Man on 07.03.13 at 10:21 pm

Gee Wizz garth, Franken numbers ha.

They weren’t Franken numbers last fall when we were in seasonal decline..

Definition of Franken number = when stats go against someone’s wishful bias.