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Straight talk about Calgary real estate
Bob's real estate blog 
Nothing to fear, even Turner postponed the apparent the crash until 2017…LOL
the readership is amazed at how they will have to wait almost 10 years from turners original crash prediction of 08 to buy the cheap RE they have been hoping for, I have to say that the whole thing is is quite amusing…LOL, LOL
This was my favourite comment on Gartho’s blog today: “I suppose the moral of the story is to buy a house that you can afford (if you want one) and live your life.
The futility of trying to predict the future should be quite clear to anyone who has been frequenting this blog over the past few years. Economists cannot predict with any degree of accuracy what will happen next week, let alone in 2017.
I think anyone who is allowing such predictions to influence their major life decisions should seriously consider this. It’s human nature for all of us to seek out news sources that support own personal world view – that’s why some read the Post, some like the Star, and some are attracted to articles that predict cheap housing in the near future.” That was made by someone with common sense(which isn’t very common on that blog)-Bob
Great logic from old gartho. I wonder if his sheep are smart enough yet to see through his BS?
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At an average annual return of 7%, that equal to $584 a month (a balanced, diversified portfolio averaged 6.98% over the last nine years, including the 08-9 melt).
So, the total monthly cost of owning this place is $2,463, or $763 more than renting – a 45% premium.
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He conveniently forgets to subtract the increase in value of a house “over the last nine years”?? In the last 9 years a house has doubled in price which equals tax free capital gains. Far better then his little taxable 7%.
Plus he assumes no appreciation in value in the next 5 years AND his 7% will continue happily on its way. Amazing how he thinks he can NOW all the sudden predict the future accurately, when in reality he has been DEAD WRONG for 6 years and counting.
Using his idiotic formula his story makes sense….LOL…what goof!
And his sheep drool all over this crap.
Tooooo funny.
Actually, the future can be predicted to a certain degree. You just didn’t listen to the right person. Try to make a distinction between those who make a living by investing and those who make a living by writing on investing.
I always chuckle when I hear some news writer predicting oil to drop to $xx. If he has any confidence in the prediction, he could easily make millions and why would he stay at his $80k / year boring job?
wsn – there is nobody that can accurately predict anything, once in a while they get something right but that’s about it. Take Bill Ackman for an example, he is losing his shirt on jcp and hlf, he made money on other calls so it even’s out but as you can see he is not that accurate. The stock and RE markets are way too big for anyone to get it right all the time.
Well, I know people like to come on here and bash Garth, but I think he has at least kept people who have no business owning a house out of the market. When I hear the ads (there’s a ton of them on Calgary radio) for condo’s telling people they should buy a place when they only make 32k a year, I feel sick. So many people I know do not make educated decisions when it comes to real estate, close friends have taken out near the max they were approved for…with volatile jobs. They have no wiggle room. My wife and I have great jobs, and in hindsight, should have bought in ’09 when it dipped, but again, no one has a crystal ball. We live a good life and renting works for us, and despite the low rates, the cost of mortgage interest and maintenance is about the same as our rent. They’re both sunk costs, lost money.
We’ve had a good return on the money we’ve saved, but I’m pretty much ready to cash out when I see the dow at 15,000. We’ll see how people can handle the higher interest rates, but I’m hoping it’ll cool off Calgary’s hot market.
It appears you’ve made some healthy choices for your life. My guess is that most who listened to Garth Turner regret their decisions to not buy a home when prices were much lower. It’s accountability, not bashing. -Bob
It’s not about bashing Turner, if Turner actually posted comments that challenge him but he doesn’t. Turner is an adviser who makes his money by investing others and so he has a vested interest the same way as the realtors he loves to slag. He might of saved some people but I’m sure he did a dis-service to many more, people have always liked RE over any other asset as a collective, it’s a tangible investment, many don’t trust the stock markets and have the stomach for the volatility that has taken place in the last 10 years, so they put their money into something that allows them to sleep at night. It’s also forced savings for many, maybe not the most efficient but better then seeing your portfolio crash and then cash out at the wrong time as most people tend to do, most adviser like Garth wont even touch people with less then half a million in assets so there is a large pool of people who don’t have much help at all.
Unrelated to my earlier post, but one reasonable cause for anger is houses cost double now what they cost in 2003 in this city. Yet the average wage has only kept up with inflation. So basically anyone born in the mid 80’s who didn’t buy a house out of HS or soon thereafter is having to pay a much higher premium than people who were fortunate enough to have been in the game. Low interest rates have kept the month to month “affordabitlity” in line, but we’re basically getting the shaft if we’re looking to buy now. This is a fact. The really sad part is, I am more than aware of it, but am slowly beginning to accept that this is the new standard and am going to have to shell out $500k to get something decent within a 20 minute commute of downtown (excluding the NE, but who wants to live there?)
@Calgary Renter
1) The typical Calgary/Edmonton household income is roughly $90k/year. That’s the target readers you should keep in mind when you read an article. Those making $32k/year as a household are really out there on a statistical curve, and should be addressed with a different article.
2) Those who don’t make wise choices in their lives actually have the best chance of success by buying a house, instead of buying a new car, or expensive shoes, or … drugs.
Calgary Renter, it’s highly unlikely that someone making 32K/year would even quality for a mortgage in Canada.
Banks are required to limit a borrower to a maximum gross debt service ratio (GDS) of 39%. GDS is the share of a borrower’s gross household income needed to pay for home-related expenses, such as mortgage payments, property taxes and heating expenses.
They are also required to limit a borrower to a maximum total debt service ratio (TDS) of 44%. TDS is the share of a borrower’s gross income needed to pay for all debts, including those relating to home ownership.
A person grossing 32K a year would be limited to spending $12,480/year (or $1040/month) on mortgage, taxes and utilities. There’s not much that you could buy for that! You’d have to have a ginormous down payment and most people making that kind of money would never be able to save that much.
Calgary Renter – I’m in agreement that housing in many parts of this country are overpriced, I see it as a negative on our economy as people have to shell out more money for a roof over their had which leaves less money for other things. The government basically created this mess regardless of how much people want to blame realtors, if the rates stayed at norms we would of never had this boom and no realtor would of been able to convince someone to buy a $500k shack with an 8% interest rate. The first people in line for these cheap mortgages are obviously the biggest winners, as I said on Turner’s blog before, the biggest catalyst to a housing decline will be the job market because rates will not be going up much more, Turner has been going on about rate increase since 08 and were still scraping the bottom of the barrel here. If people have no jobs they don’t shop and that goes for housing as much as a sweater.