NOTE: This is a re-print of an old blog post I made in 2009 in response to this piece by Garth Turner, where he attacked this post. I think I got more readers in a day than I had in six months prior! As I look at this in 2018, history has proven me correct. Thank goodness, or else it would have been quite embarrassing to be the Greater Fool.
Wow. I guess Garth and his pack of loyal followers decided to visit our humble blog, to the tune of 600+ visitors in 24 hours.
Make yourself at home. Grab a coffee.
Thanks goodness for Google Alerts, I suppose.
You could have at least warned me you were coming. I’ve been meaning to clean up and redesign this site. 🙂
Garth, I find it amusing that you see my post as an attempt to “discredit” guys like you.
If there’s any positive thing that can come from my father-in-law being in critical condition at the hospital, it’s that I don’t take attacks like this too seriously.
Everybody knows the historically low mortgage rates will go up eventually. My post wasn’t about the real estate market in 2015… it was about May and June of 2009.
Likewise, you are completely right about failing companies, consumer debt, our tax system, the car industry, and all the other bad stuff out there.
I know fear-mongering sells a lot more books than happy thoughts, but come on. You manage to paint all home buyers as overextended lemmings jumping off a cliff to certain doom.
Are there people that shouldn’t buy homes now? Yes. Are there Realtors and Lenders who are eligible for malpractice suits in their professions? Yes.
It’s hard to believe, but in spite of all that, some people who buy homes today will actually be okay in ten years. Some might even be wealthy as a result of the choices they make right now.
The world is not going to end.
And instead of nail-biting about all the bad stuff out there, some of us will keep busy creating value for others that is substantially greater than the amount we’re compensated.
Regarding the comments made…
Bono, the bank would never let anyone spend 65% of their income on a house, so I’m not sure what you’re talking about. Good luck with that thinking.
Same with your comment about homes not being worth 1/3 of what they sell for. Market value is the price a buyer is willing to pay and the price a seller is willing to accept, so obviously other people see the value.
I’ll gladly buy your house without even seeing it for 1/3 of the price you bought it for.
Let me know.
Gordie Canuk – it’s so funny how you read somewhere between the lines in my post any predictions about the future.
There were none.
It’s no big secret that lower interest rates and a more positive media spin on real estate were the factors that changed the market between January and May. When the rates go up, house prices will likely decrease. Historically, that’s the relationship. No surprises there.
And what’s interesting is that buyers will pay the same amount per month for a home a year from now compared to today.
It all comes back to affordability. When the teachers, nurses, and everyday workers can’t afford house prices, a correction occurs.
It’s not economics. In fact, most of the issues in our economy are a result of human psychology.
People will take things as far as you let them. And the financial institutions have been letting out a lot of slack on the rope.
Who is to blame for a drug problem? The addict, or the dealer?
The answer is both.
And I agree. There’s a lot of things that are broken with this economy. The middle-class is disappearing as people are being sorted into “haves” and “have nots”, with the great majority falling into the latter category because they’re over-leveraged.
But there’s also a LOT of people who will be just fine.
Richard Pearson, it would be great if I could control everyone’s finances and the economy in general after I help them find a home. But I can’t.
You don’t have any idea what interest rates will be in 5 years, and neither do I. And I don’t think it’s fair to place all of the blame on a Realtor for any changes in the market. The client needs to do their homework and assess the risks too.
Ultimately, I’m there to consult and do what’s best for the clients, knowing everything we know right now.
After that, it’s about living within your means and saving for a rainy day.
Greg, my personal “sales” and the statistic I was quoting about total sales in the Greater Toronto area are completely different. I’m sure it’s more fun to read what you want to read, instead of what’s actually there. I’ll try it sometime.
So let’s review… I’ve been called a shill, an idiot, an industry hack, a pump and dump Realtor, a crook, and a Realitwhore.
There’s some hateration going on. Holy cow.
Isn’t it great to have anonymity over the Internet? Decency goes out the window when there’s no accountability.
You guys need a hug from someone. Seriously.
God loves you. So does Garth Turner.