Category Archives: Predictions

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.

“So we project 60 to 90 days from May 19th that MLS sales will be reported that will reveal the market died on May 19th.”

Garth Turner and Ross Kay

Garth Turner and Ross Kay

Garth “I didn’t say crash” Turner has been discredited numerous times because of his hallucinatory predictions, followed up by self-inflicted amnesia. He’s admitted that if he can’t find a source for his theories, he simply makes up his own data. He’s now hitched his wagon to Ross Kay, a fortune-teller with startling revelations.

I’d never heard of Ross Kay until Garth publicized this sensational prediction, but being endorsed by Garth Turner is a warning sign of sketchy and unreliable data. I wouldn’t have given Kay a second thought, except he’s also accusing CREB of double-reporting sales. We analysed this in my previous post and have shown there is no evidence for Ross Kay’s claims. Waiting on Ross Kay’s open and full disclosure. I’ve asked Kay numerous tmes to produce the evidence, but he has gone silent.

Let’s now look at Ross Kay’s prediction that the market died on May 19, 2013 and see how it relates to Calgary’s data four months later. (Ross was sure it would manifest itself within 60 – 90 days, so we’ve given him a couple extra months for good measure).

The following blog post was written by Garth Turner on May 29, 2013 on the Greaterfool.ca http://www.greaterfool.ca/2013/05/29/a-downward-spiral/ :

The day it died (by Garth Turner, GreaterFool.ca)

In 2008, GTA realtor Ross Kay invented an ‘engagement index’ to statistically chart house horniness. For five years he’s been diligently amassing data, filtering and weighting it, and watching in fascination as 60 to 90 days later changes in his index appeared as official published real estate data.

His track record (he says): 100%.

Hours ago he released what he considers ‘drastic’ results, in a warning to his clients. “Over the course of the last 9 weeks, our index has revealed a downward spiraling real estate marketplace, with results that will not reveal themselves in MLS sales data until finally reported by Organized Real Estate Associations,” he wrote on his site. (This has been removed from his site – Bob)

In a note to me, he adds:

“On May 19th, 2013 we recorded the lowest value of Canadian consumer engagement in real estate since 2010.  What is scary here is that on April 8th 2012, we reached an all time high engagement value.  The May 19th numbers for 2013 represent about a 72% decline over that peak number.   This massive decline raises grave concerns not being reported in newspapers across the country.

“So we project 60 to 90 days from May 19th that MLS sales will be reported that will reveal the market died on May 19th. Our numbers have not been wrong since 2008. So as it turns out the peak of the real estate market in Canada was April 8th 2012, as posted here on Greater Fool.  Peak pricing was established and as recorded MLS sales prices now show, anyone who bought in competition around that date paid too much.”

Is this credible? Obviously we’ll find out in a couple of months…

******
How did Ross Kay’s prediction play out in Calgary? Was Ross Kay 100% correct? 50% correct? or dead wrong?

September 2013 price is up 9.2% compared to last year.

September sales are up 20% compared to last year.

Inventory, which you would expect to increase in a dead market, is down 20%.

Would there be bidding wars during a dead market? 18% of homes were sold for list price or higher in Sep.

Not exactly the sign of a dead market.

The most serious threat to Calgary real estate

Trudeau

Justin Trudeau will follow in the footsteps of his father and demonize Alberta in order to get elected

“Screw the west, we’ll take the rest”

I have no doubt that previous strategies of the Liberal party will be resurrected come election time. It was Liberal Senator and campaign chairman Keith Davey who, in the 1980 election, summed up his party’s strategy as “Screw the West, we’ll take the rest.” Liberal prime minister Jean Chretien used Alberta as a foil for everything he claimed would go wrong if his Liberals were not re-elected in 2000, and it was Mr. Chretien who said he preferred to do politics with anyone but Albertans.

“It’s all Alberta’s fault.”

Trudeau6As we get closer to an election, and reality sets in, and Trudeau sees his support plummeting, he will do the same thing that his old man did to get elected. Demonize Alberta. Alberta has become the economic engine of the country, however, so there are serious consequences for the rest of the country as well.

Pretentious, vacuous, and bumbling, Justin Trudeau has the support of many Canadians based simply on his looks and his name. His platform consists of smoke and mirrors(legalizing marijuana). Trudeau and the Liberals stand for nothing except the goal of attaining power at any cost. Scarier still, Trudeau has most of the media eating out of his hand and asking him no difficult questions.

“Justin Trudeau and Justin Bieber have more in common than just a first name. Both guys are also adored by legions of love struck fans. Except in the case of Bieber the fans are teenage girls, whereas for Trudeau they are the Canadian media.”

In November 2010, Trudeau told a Quebec television show that he was tired of Albertans running the country and that, whether it was Jean Chretien or Brian Mulroney, Canada is better off when Quebecers are running the country.

“Canada isn’t doing well right now because it’s Albertans who control our community and socio-democratic agenda. It doesn’t work.”

Trudeau was then asked if he thought Canada was better served when there are more Quebecers in charge than Albertans.

Trudeau replied: “I’m a Liberal, so of course I think so, yes. Certainly when we look at the great prime ministers of the 20th century, those that really stood the test of time, they were MPs from Quebec… This country – Canada – it belongs to us.”

Trudeau3“This anti-Alberta attitude is deeply held in the Liberal party.” 

He’s also on the record for saying “…it would be a bad idea to abolish the Senate, because we have 24 senators from Quebec and there are just six from Alberta and six from British Columbia. That’s to our advantage.”  He is defending the status quo Senate because it gives Quebec disproportionate power at the expense of the West. 

Alberta has been a tried-and-true whipping boy of Liberal politicians. They have nothing to lose because there are no seats to be won by Liberals in Alberta, but they have tons to gain in central and eastern Canada. I expect he’s learned this lesson well from his daddy.

Baby Trudeau has accomplished nothing in his life except to charge schools and charities with speaking fees while he’s supposed to be in parliament, all the while collecting his MP pay from the taxpayer. Charities with lobbyists who later approach him for favours.

Will Trudeau Jr. follow in the steps of Trudeau Sr. and plunder Alberta?

Will Trudeau Jr. follow in the steps of Trudeau Sr. and plunder Alberta?

“Alberta will suffer if Trudeau becomes prime minister”

If he  becomes prime minister, Alberta will be plundered as occurred during the national energy program when real estate tanked and thousands of people lost their homes.

Two years ago, on the night that Stephen Harper was elected, I predicted on this blog that Justin Trudeau would become leader of the Liberals, and that our real estate values would be in jeopardy if Trudeau became prime minister. I have no doubt that as the pressure mounts for him to get elected, he will revert to the divisive style of regional politics that Liberals are known for.

“Justin Trudeau is a dabbler – he dabbled in teaching, dabbled in the arts, dabbled in acting, dabbled in activism. Now he’s dabbling in politics.” 

Trudeau has absolutely no idea what it’s like to work for a living. He is a silver-spoon millionaire who pretends to understand the middle class average guy. I hope there are enough intelligent Canadians who can see through the thin veneer of this airhead. He is an opportunist with little intelligence and no abilities. His most important decisions to date revolve around managing the $1.2 million trust fund which was bequeathed to him.

I hope I am wrong in thinking that Canadians would give this lightweight the reins of power on Oct 19, 2015. My greatest fear is that they will buy into the name, the looks, the hair, the smile, the youth, and completely disregard his agenda that will decimate Alberta, and consequently Canada.

“The best argument against democracy is a five minute conversation with the average voter” -Winston Churchill

Garth Turner chuckles: “Too bad.”

In a recent article in the Financial Post Magazine, Garth Turner of the GreaterFool.ca doesn’t show much empathy for the people he misled with his predictions…

Garth questions other people’s integrity but has no problem posting outright lies on his blog

Garth questions other people’s integrity but has no problem posting outright lies on his blog

Housing permabear, blogger and former MP Garth Turner thinks “those people that are waiting for a U.S.-style cataclysmic dump are never going to see it.” He admits he was unsure in 2008 “because the world was pretty wonky.” But Turner sounded awfully sure when he told Ottawa Citizen readers on Mar. 27, 2008, to look closely at the “real estate disaster now in full flower to our south” because “it’s coming here.” What about all those readers who think he mistimed the market? “Well, too bad,” he says, then chuckles…”

Read more in the Financial Post Why real estate doomsayers continue to be wrong

Read even more  Garth Turner’s track record speaks for itself

Garth Turner – milking the gullible

Garth Frankenturner

Garth Turner misleads his readers about Calgary

On my blog statistics page, I can see what words are used for searching. Top of the list today…

garth turner is wrong
calgary housing market
calgary house market
calgary housing price
garth turner
bob’s real estate blog
calgary property prices
calgarly real estate market
garth turner fraud

free web stats

Why 3 years?

‘The real estate executive says July sales statistics from a historical standard were “tepid” and adds the numbers gets “the big headline” because the comparison is to a period when housing sales were slumping badly.’

http://business.financialpost.com/2013/08/15/canadas-housing-market-the-one-that-no-one-can-predict/

If you’ve followed my blog, you’ll be aware that I’ve been comparing the present year to the average of the past 3 years when I compile the market updates. The story in the Financial Post illustrates the reason why. A single year can be an outlier, an anomaly. It can severely distort the overall picture when comparing to a single year.

In the same article, David Madani of Capital Economics gets thrown under the bus for his history of incorrect predictions. He’s been predicting a 25% correction consistently for 30 months. If the Canadian market declines 25% from today’s prices, it will be pretty much back where it was when he started his forecasts. Now that Harold Camping has met his maker, perhaps Madani can take his place at the table.

It would appear that CREA is the voice of calm and reasonableness: “Canadian home sales have staged a bit of a recovery in recent months after having declined in the wake of tightened mortgage rules and lending guidelines last year,” said Gregory Klump, chief economist with CREA, who expects August results will also look strong as they are compared to a weak 2012.”

Accolades to First Foundation

When Madani first made his prediction in Feb 2011, it was rebutted by a mortgage broker who wrote, “people are not over-leveraged, that our incomes are sufficient to pay our obligations, and that the fundamentals are solid for a good, old fashioned, boring real estate market where reality overcomes emotion and conjecture.” It wasn’t sensationalist enough to attract any headlines, but it was accurate. Why David Madani is wrong

I’m not sure how a guy like Madani is able to keep his job in the light of such incorrect forecasts. On Capital Economics home page it states, “we have gained an enviable reputation for original and insightful research.” Good thing they don’t claim that it’s accurate.

“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.

Bad news for renters

NenshiMayor Nenshi predicts the rental vacancy rate could come close to zero

This is not just bad for renters, but I also believe it’s bad news for Calgary in general. If people can’t find suitable, affordable accommodation, we’ll soon see a lot of negative fallout such as higher prices for home buyers, an exodus of people for more affordable locations, lower in-migration, students without accommodation, and a flood of pets at the animal shelters.

From the Calgary Herald: Calgary and Edmonton had the lowest vacancy rate of any major Canadian city in April, at 1.2 per cent, according to the Canada Mortgage and Housing Corp. Calgary rents jumped by more than seven per cent over a 12-month period, the biggest annual rise in Canada, as the average rent for a two-bedroom apartment reached a record $1,202, CMHC reported.

Tammy Panchuk, who owns 40 rental units with her husband, said they don’t have any vacancies now, and when there are openings they advertise on only one website because the inquiries become “overwhelming.”

Calgary is now among the fastest-growing cities in North America, according to new civic census data released this week, and Panchuk expects the narrowing rental market will force many would-be renters to buy instead.

“I deal with a handful of investors,” the Calgary real estate agent said, “and none of them have any vacancies whatsoever, and if they do they are snatched up just like that.”

If we had the lowest vacancy rate in April, I shudder to think what it will be now, after the flood. Read more Rental market worries rise in Calgary

Image

Market update Jul 1 – 15, 2013

Inventory vs sales and price2

Bloodbath postponed for five years

“House-aggeddon” was supposed to have happened every year between 2008 – 2011.  No luck.

After the mortgage rule changes, a devastating crash was predicted for 2012. No luck.

A crash of biblical proportions was forecast for 2013. That one’s gone by the wayside.

Now its been delayed for another five years according to this gem from GreaterFool.ca: . “If so many people are rushing to lock-in pre-approved mortgage rates while home prices are still high, how bad is it going to be in 2018 when the rates are closer to 10%??? Its going to be a bloodbath!”

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/