Thursday, January 29, 2009

Future insight?

Some experts believe Canada's housing market lags the US one by up to 2 years. If that is truly the case, this piece in the TC today gives us interesting insight into the future of the Victoria real estate market. Here's the highlights, with my comments below, and my emphasis in bold:
Yes, residential real-estate remains in the throes of the worst downturn since the Great Depression. Yes, home prices are the lowest in six years and still falling. And yes, it still takes three quarters of a year to sell a house.

Nevertheless, the market might have turned a pivotal corner last month, if a surprising increase in existing home sales is any guide.
A surprising increase in existing home sales, if it turns into a lasting trend, may well be a guide. Only time will tell. But what is telling about the reasons behind the surprising increase is more important:
prices appear to have fallen enough in some regions to make buying cheaper than renting, particularly in the West
I thought the West was different? Isn't the West where all boomers go to die? Isn't the West where incomes are so high the pot of gold at the end of the rainbow is in the trunk of everyones' BMW? I guess not. Or if they are hiding gold, they're not spending it:
U.S. home prices plunged a record 18.2 per cent in November

Average home prices are at similar levels to what they were in the first quarter of 2004

Home prices have dropped so much in some areas of California that monthly mortgage payments on single-family detached homes are comparable to apartment rents

The inventory of existing homes for sale fell 11.7 per cent to 3.68 million units in December, translating into 9.3 months of supply. "But, six months is the natural rate of inventories, so supply remains high,"

Three "truths"--if we allow history to be our guide--about the Victoria real estate market:
  1. Over the long-term, real estate values go up
  2. In every correction over the past 30 years, at the bottom of the trough it became cheaper to own than rent an equivalent property
  3. Our real estate market has consistently lagged similar US markets by roughly 1-2 years
Will we see a similar piece in 2011 encouraging us to take bold action by making the switch from renting to buying in a falling market in the TC? We won't have to, I'm guessing, because the TC and the real estate industry organizations who advertise within will encourage us to take bold action on a semi-weekly basis to take advantage of "once in a lifetime opportunities" the whole way down... no matter how long that takes.

117 comments:

patriotz said...

And yes, it still takes three quarters of a year to sell a house.

No it doesn't. It just takes the sellers 9 months to get real on prices.

Price a house low enough and you can sell it as quickly as you want, in any market. Well not in Detroit, but certainly just about anywhere else.

VillageBC said...

I'd say we are into year 1 of the 1-2 year lag. Capitulation might happen sooner simply due to the overwhelming media coverage of everything negative. I don't really expect bargains (I use the term loosely) to start regularly showing up until this fall.

Spring is here, sales are up. Not a single mention of inventory that is also rising. Haven't seen numbers, but I would bet that is rising faster then sales.

roger said...

VillageBC said:

Spring is here, sales are up. Not a single mention of inventory that is also rising. Haven't seen numbers, but I would bet that is rising faster then sales

In the last thread I posted these graphs: MLS sales and MLS listings.

Sales always start to go up after the December doldrums. You can clearly see that listings far exceed sales in any given January. And sales this year are starting from a December low that is way down from anything seen in recent years.

PCS shows total inventory is up by approximately 360 listings. I predict sales will be less than 350 which will be way down from last January's 464.

So next week will be "spinorama" presented by the good folks at VREB. With sales down and the inventory starting to soar again they will have their work cut out for them. If the median and average prices are down as well the MSM will be forced to write a fairly gloomy article.

Just Jack said...

Single Family 113
Duplex 5
Condominiums 57
Townhomes 30
Manufactured 4

Total 209

Jan 1 to Jan 29

womp said...

Just Jack - you're the best!

I will be very surprised if medians trend upward again in January. The prices I'm seeing on Matrix are overwhelmingly lower than 4 months ago.

omc said...

median and averages may or may not be down as per last month, but what is for sure down is the price for the amount of house you get for the houses that actually sell. Conservative predictions are that we are in the VERY early stages of the job loses and we sould be approaching 9% in the summer.
Much more of a bearish take on the same data that is is used to suggest the US housing may be at bottom.


Thanks for the stats Jack, wonder how the realtors will explain that one!

roger said...

I previously said:

I predict sales will be less than 350 which will be way down from last January's 464.

Just Jack said:

Total 209

Thanks for the info Just Jack. Boy was I off the mark. This month is a disaster. Why are agents saying they are seeing all this "activity"? Lots of conditional sales in the last 10 days or wishful thinking?

The article in the TC next week will be interesting reading. I think they better open both exit doors for the owners coming onto the market in February.

omc said...

A landslide of new listings in my PCS price range in the last few days, but they are all at last years prices. That isn't going to be too good for their stats.

hhv said...

Cue Fred Carver rant about how pending sales and conditional sales aren't the same thing and we're back-end loaded with many offers that will magically transform into "sales" in next month's stats... except they never do.

Just Jack, once again, thank you!

hhv said...

So there were 239 sales last month (Dec 2008) and 209 so far in 2009. I wonder how the TC will reconcile their "activity picking up story" with sales numbers that actually show activity slowing down month-over-month?

hhv said...

Just passing on some evening reading:

1. Turning Japanese: the audacity of reality

2. Who's exuberant now?

3. Community reinvestment: obama's contribution to the housing bubble

Anonymous said...

I'm seeing new listings coming on at what I would say were at least mid 2006 prices in Sooke. I wonder when the SFH builders will wake up.

Anonymous said...

hhv said.....

Cue Fred Carver rant about how pending sales and conditional sales aren't the same thing and we're back-end loaded with many offers that will magically transform into "sales" in next month's stats... except they never do.

***********************************

Fred isn't coming around this blog anymore. He gets his reports now from the US NAR.

Fred's Market Trends

Fred even has his own blog now.

Anonymous said...

That dude is awesome. Doesn't he know that cutting and pasting a news release under the byline of "by Fred Carver" is akin to plagarism?

My favourite, from his blog comments (empty): "Typing the current month is used to prevent robots from entering comments."

LOL...

Anonymous said...

Fred doesn't just have one blog - he has two.

Fred's Blog

Check it out. Fred gives you the latest on the Victoria market and why you should sell now.

Anonymous said...

See, when I hear a realtor saying that there is all this activity I think of listings and not sales.

I guess we'll see when the January and then February numbers come out.

S2

Anonymous said...

RE: Fred.

It's so nice to see someone so obviously desperate trying to hold onto their career by marketing, marketing, marketing, when they really should be going to trade school.

Dumb Canuck said...

The oh shit moment hasn't yet sunk in for new listers. Should be interesting when it does. Buyers already understand. When X doesn't even come close to Y, then there's a moment of truth ahead.

patriotz said...

Community reinvestment: obama's contribution to the housing bubble

This is part of the neocon propaganda campaign to blame the housing bubble on lending to minorities. Funny there was such a big housing bubble in places such as Idaho, which has minorities at all, except the Indians who already have their own real estate.

The plain fact is that at no time was any bank ever required to make loans without down payments, at excessive valuations, with excessive debt service ratios, or without verification of borrower income (liar loans). This is something the banks decided to do themselves.

Anonymous said...

That's true. Nothing in the law forced banks in Nevada, Arizona, Colorado, New Mexico, and California to write millions of homes loans and even home equity loans without even checking for legal US citizenship, let alone proof of income.

Except possibly DEregulation, which is a conservative legacy.

patriotz said...

Home prices have dropped so much in some areas of California that monthly mortgage payments on single-family detached homes are comparable to apartment rents

Note that many areas in California have very substantial property taxes and HOA fees, which means that buying is still no bargain even if the mortgage payments alone are cheaper than renting.

hp said...
This comment has been removed by the author.
hp said...

The TC article starts with a wrong assumption:
"Nevertheless, the market might have turned a pivotal corner last month, if a surprising increase in existing home sales is any guide."

The increase in exisiting home sales was really not statistically significant.

Calculated Risk has a post discussing this with a long term graph:
http://www.calculatedriskblog.com/2009/01/existing-home-sales-increase-in.html

Also, he notes that a large part of these sales are foreclosures and short sales, at least 35-40% of the sales.

CR predicts that exisiting home sales in the US will continue to decline in 2009 and likely will not bottom until 2010.

So it is wishful thinking to say that the US housing market might be "turning a pivotal corner".

Anonymous said...

The markets are turning a pivotal corner all right... the only problem is, once you've gone off the edge of a cliff, you can turn every which way you want and you're still going ALL THE WAY DOWN.

hp said...

More than 100 foreclosure/judicial sales listed in Calgary

Mike Fotiou at
http://calgaryrealestatereview.com/ lists 118 current MLS listings in Calgary that are foreclosure/judicial sales. He says that in March/08 there were only 8 listed in the entire Calgary MLS system.

It seems that Calgary is on the same path as US cities - once property values begin to decline, some home owners have negative equity. Some of these negative equity houses and condos end up as foreclosures. Sales of these properties will drop average house prices, since the banks generally do not like to keep them on their books.

I expect foreclosure activity to pick up here in Victoria, also.

Just Jack said...

Far more reaching than low or no document loans for new purchases are the home equity lines of credit (HELOC).

Perhaps 3 to 4 percent of the housing stock is exchanged each year. But how many families have maxed out their lines of credits? Far, far more than 4 percent!

In the late 1990's, lending institutions began to push the global lines of credit. One time legal and appraisal fee and you were set up to draw 75 to 80 percent of the value of your home. Some of these people have returned year after year to the bank, as their home prices increased, to increase their HELOC to pay off credit cards, buy a condominium, vacation, etc.

Its the use of these lines of credit that all of the boom towns in real estate have in common. People were using their homes as ATM machines, not worrying about the price of an object, but what the monthly payment would be. The faster the run up in prices, the greater use of the HELOC as people were living beyond their means. We became dis-savers and spent more than our take home pay by drawing on the HELOC.

When prices stopped increasing in the USA, this is when people could no longer refinance themselves out of debt because of poor credit scores or loss of income. As time went on, more and more homes went under foreclosure. The lines of credit, secured by their home, became the Albatros around their neck.

Victoria has only had decreasing price for 10 months, and the job layoffs are now just beginning.

Victoria's real estate market is a Boeing 747, on automatic pilot, heading for a mountain top. Our fate is following that of cities in the USA, like Phoenix, San Diego, etc.

What will Victoria's market be like this time next year? Look south of the border!

roger said...

TC had this article in the business section today:

Saltspring Island house for sale in a Dutch auction

Owners of a Saltspring Island house are going Dutch to get their property sold in today's sluggish market.

When the clock ticks over today, the price for the former bed-and-breakfast will drop another notch to $472,000. Every 48 hours, the price clicks down by $1,000.


A 15K reduction in a month on a 470K property won't get much excitement from buyers. Even VREB had this to say:

Chris Markham, president of the Victoria Real Estate Board, has never seen a Dutch auction for a local property and is not a fan of the idea. "I don't see anyone saying, 'What a great business model.' "

Markham said the goal is likely to garner media attention, adding it's more typical to reduce the price by greater amounts to entice buyers.


But then he adds this delusional advice:

Sellers also have the option of holding on until the market improves, Markham said. "Our market is slow but we are going back to normal."

Normal?? - slumping sales, soaring inventory, prices down all in the midst of a recession.

hhv said...

Roger, in Chris's defense, despite the past 7 years of craziness, low sales, high inventory and inflation-matching prices is pretty much the state of "normal" in the Victoria market. Once the market hits its cyclical bottom, we can expect to see "normal" for some time...

Nick said...

Canadians refinancing mortgages to pay off debts"

Record low interest rates are spurring more Canadians to refinance mortgages to consolidate debt, a trend that is expected to grow as Ottawa moves to loosen lending conditions and encourage spending on housing.

While refinancing your mortgage at a lower interest rate can save you money even after paying a penalty, experts warn there are dangers to taking out bigger mortgages with home values dropping and unemployment rates rising.

[SNIP]

Meantime, statistics kept by the Canadian Bankers Association show the number of mortgages in arrears has grown to 0.31 per cent in November, or 12,048 mortgages, from a total of 3.9 million mortgages nationwide.

That's a 22 per cent increase in the number of arrears compared with 0.26 per cent or 9,862 in November, 2007, when there were about 3.81 million mortgages in Canada.

The rise in mortgage levels and arrears comes as Ottawa announced plans in its federal budget Tuesday extending the Insured Mortgage Purchase Program by an extra $50 billion to $125 billion.

Anonymous said...

"Sellers also have the option of holding on until the market improves"

That' why so many OM signs on the list. Once the sellers realize the reality and addmit the reality, there will be tons of BOM signs and press the price down. For buyers, the longer you wait the more you will lose.

roger said...

HHV,

So do you agree with Chris that "Sellers also have the option of holding on until the market improves"

:>)

Anonymous said...

oops,

For sellers, the longer you wait the more you will lose.

Anonymous said...

i think Chris don't know what he is saying. i only know he will spin everthing and comes with "anytime is a good time to buy and to sell"

make the deal and let me get the commission.

roger said...

Today's News Stories

Economic slide deeper than feared

The Canadian economy shrank for the second straight month in November, figures released Friday show, adding weight to the view of the federal government, the Bank of Canada and many private sector economists that the country has joined the global recession.

The November decrease was almost twice as deep as the consensus forecast among economists, which pegged the likely contraction at 0.4 per cent, and some commentators said the showing means the economy almost certainly contracted by more in the fourth quarter than the 2.3 per cent most recently forecast by the Bank of Canada.



Turner to tackle housing crisis, myths

Homeowners in B.C. can expect the value of their properties to decline throughout 2009 and 2010, says former MP and best-selling financial author Garth Turner.

Turner, who accurately predicted the Canadian housing meltdown in his 2008 book, Greater Fool, says Ottawa's "failure" this week to provide any real middle class tax relief in the budget guarantees the growing recession will bring with it a further collapse in Vancouver-area and Lower Mainland house values.

"Despite recent hugely misleading predictions by local real estate officials, expect this collapse to happen," says Turner.

"The momentum of the housing market is clearly downward, as we can see from a drop of more than $150,000 in the average house price in Vancouver."

"But more critically, sales volumes have fallen dramatically and listings are about to balloon as many people try to sell in the traditional spring market. Unfortunately this year, there won't be one."

Turner is also levelling criticism at B.C. real estate pundits and gurus, including the B.C. Real Estate Association for what he calls, "misleading, fabricated and dangerous" comments on the direction of the housing market.

"The fact remains the average family in most B.C. markets cannot afford the average home, so during a time of job stress, rising unemployment and a falling economy, there is no other direction for house prices to go but down. It doesn't matter how cheap interest rates get, homeowners are going to see equity fall fast."

Turner is warning many first-time buyers, who got into houses or condos with little or nothing down, will soon be in negative equity, with mortgages exceeding the value of their homes.

victorianna said...

I just had access to a presentation made by the chief economist of a big five bank. One of the graphs she used was very significant for real estate bears. In the prediction for 2009, the graph showed the U.S. real estate price line continuing to trend steeply down to the end of this year. The interesting bit was their prediction for Canadian prices. This bank predicts that Canadian prices will plunge more steeply, and meet the U.S. downward-trending prices (in terms of percentage lost from peak) by the end of 2009.

patriotz said...

"Canadians refinancing mortgages to pay off debts"

Now that's one for the Oxymoron Hall of Fame.

Nick said...

patriotz said: ""Canadians refinancing mortgages to pay off debts"

Now that's one for the Oxymoron Hall of Fame."

That's for sure, although good news for fiscally prudent people. I look forward to cleaning up at bankruptcy auctions.

VicGal said...

Just curious is anyone is going to the HoweStreet.com Money Expo happening tomorrow (Saturday) at the Victoria Conference Center?

Apparently Garth Turner will be speaking as well as other Finacial people. Might be interesting!

hhv said...

"So do you agree with Chris that "Sellers also have the option of holding on until the market improves"

Sure, as long as they don't find themselves in a must sell situation. But I'm guessing they'll be waiting a long time for a market improvement.

Just Jack said...

If the sellers are holding on - then they really are not sellers.

For example:

A person with a home having a market value of $400,000 finds an agent who will list their home for $800,000. Are these truly "willing" sellers? I don't think so. They're just wasting the agents time and money. In my opinion, these type of sellers have a negligible impact on the market place.

hhv said...

JJ,

I've been having this ongoing conversation with a builder friend of mine. He does very unique homes and renos then sells them. He's of the impression that his homes aren't "market homes" because the product he offers is truly one-of-a-kind. As someone who has an appreciation for truly unique homes, I tend to agree with him.

However, I maintain in our conversations that the state of the market will very much influence his potential buyers. He seems to think it won't and all he needs is someone to come into the home and turn to their spouse and say "this is the one, honey, i have to have this home." To which I reply, the market will always set your price: you can't ask for 2008 market prices when other homes are selling for 2007 or earlier equivalents, potential buyers will just not bother looking at you when you're so far off the mark.

As someone who understands buyers and sellers better than I, what are your thoughts on the truly one-of-a kind market?

These aren't million dollar properties with bells and whistles, these are $500-$650K, unique conversions and character homes with layouts and designs you just don't see done in homes being built today.

roger said...

I think there is another class of sellers that are trapped and unable to sell even though they want to unload now.

Say someone bought a house 8-18 months ago and put down 10% or less. On top of that they would have CMHC insurance and unless they were FTB's property transfer tax. When they go to sell it will cost a little over 3% for agent fees (6% on first 100K and 3% on balance). Prices are down at least 10% and so they would end up owing the bank money if they sold. And they probably don't have any cash in reserve so unless the bank will give them an unsecured line of credit loan they can't sell. In the US some banks are letting the sale go ahead and eating the loss as a short sale.

Even if they did sell they would end up renting because they would not have the downpayment for another house.

I feel sorry for these folks. Many bought thinking they would stay for a couple of years and then move up the property ladder. Some are now stuck in a small condo or a suited house with tenants and no way out. They just sit there hoping they can continue to make the monthly payments and watching the market value keep dropping.

roger said...

HHV,

I think your friend is used to selling to emotional buyers. The resident agent on KIV has mentioned this aspect of buyer mentality on more than one occasion.

When the market was hot buyers were under a lot of pressure to make a quick decision. TV shows were pushing the granite counters, stainless appliance and colour coordinated decor and appealing to folks emotions. Buyers believed that prices were going up forever and so why not buy what you really want now.

Falling real estate prices, ballooning inventories and recession talk every day will result in a shift in buyer mentality. Buyers will now focus on taking their time which reduces impulse driven or emotional buying.
Getting a good deal will become more important as well.

In summary, market forces will be brutal to those who are out of whack with current market prices. Those that kid themselves will just chase the market down with price reductions.

Anonymous said...

I recall hearing and have the general presumption that it takes about 5 years to break even on a house purchase. This makes some sense considering preoperty purchase tax, closing costs etc.

Not trying to be callous, but someone buying at the past 18 months peak and doing it on 10% or less down will not get my sympathy. If you have done this and now have to walk away, do it at a brisk pace; 5 years of paying off that mistake [to arrive at 0] will have the same effect as walking away from your credit rating and saving for the next 7 years.

It's a dollars to dollars decision and nothing more.

msr said...

hhv,

I think in the future your friend will be able to find a market for his products, 'luxury' homes will still sell. However, in the short term I think he will have serious difficulty moving his creations.

All luxury products are going to fare poorly over the next few years and luxury homes will take the worst of it. His home will simply sit on the market indefinitely at 2008 wishing prices or be sold at a small premium of 'similar' homes.

His work may be superior, but is it $100,000 superior?

Anonymous said...

Another seller unloads feeling disappointed....

Gorge Lowball

roger said...

Ever wonder what a real estate agent spends every month??

Here is what it costs a Remax agent in the Fraser Valley. Victoria expenses are probably about the same.

Remax Agent Monthly Expenses

patriotz said...

I feel sorry for these folks. Many bought thinking they would stay for a couple of years and then move up the property ladder.

I don't, and you gave my reason in your second sentence - they are speculators.

hhv said...

Gorge Lowball:

Don't the marketers understand that "build equity" and falling market are counter productive and pretty much oxymoronic?

Anonymous said...

I'm not sure buying with the intent of moving up the ladder translates to speculating. It's simply attempting to build equity through time.

All else being equal, buying between properties will have the same ratio regardless of where the RE prices are.

patriotz said...

It's simply attempting to build equity through time.

"Attempting to build equity through time", i.e. buying in expectation of future price increases, is the definition of speculation.

Anonymous said...

Did you miss the rest of the post Patriotz?

"All else being equal, buying between properties will have the same ratio regardless of where the RE prices are."

I.E. owners buying up in any market are not "making money" nor necessarily speculating that they will. You don't "make" money on your principle residence, unless you decide to sell and rent for 5 years, now you're speculating.

Smart owners buy only what they can afford and look to move up over time if it makes sense.

patriotz said...

No I didn't. I was taking issue with the first paragraph, not the second.

I reiterate - if you expect to sell a property for more than you paid for it you are a speculator, regardless of what you plan to do with the proceeds.

Anonymous said...

HHV said "These aren't million dollar properties with bells and whistles, these are $500-$650K, unique conversions and character homes with layouts and designs you just don't see done in homes being built today."

For damn good reasons. Clawfoot tubs look quaint until you climb into one and find the walls of the tub ice cold because there's no air insulation between the inside and outside walls like in tubs since the 1950's.

Postage stamp kitchens were fine when the only person who'd ever go in there was the cook or the butler.

One bathroom hovels unless the place was chopped up into a suite on each floor and in the basement.

Small windows making prisons out of homes where the sun rarely shone made sense when the fireplace was the only source of heat.

I could go on. There is a reason why PROGRESS is called PROGRESS. Sometimes cheaper construction more than makes up for horrendously dated design for lifestyles that haven't existed since before the FIRST Great Depression.

Unless you've been brainwashed by "This Old House", propaganda for buying something that needs to be completely redesigned and rebuilt from the ground up to the immense profit of Home Depot, reno contractors, and no one else.

Houses "with good bones" need to be razed. Perhaps that might be the best thing to come out of this crash. Victoria might well finally move into the 1970's.

vg said...

I remember when people used to reno their place in special ways so they actually lived in them and enjoyed them , not try to flip them. This is where the mentality is now forced to change for a very long time.

They had a very long segment on CNN last night debating the housing problem and they emphasised the hockey stick price chart going back to 1989.

The bottom line was you can try and rescue the forclosures all you want but prices have to come down much more til people have confidence that prices have stopped dropping and that isn't happening yet down there. If they are talking that in the US then we have a very long way to go.

Anonymous said...

"No I didn't. I was taking issue with the first paragraph, not the second."

The you're commenting out of context as they go together.

Anonymous said...

Building equity can also be achieved through mortgage pay down. The hope being that the house would appreciate by a modest amount for inflation and the rest would be from mortgage payments. This is hardly unreasonable and has been my plan since I bought my place 5 years ago.

Anonymous said...

Patriotz, what's your take on this analysis re: deflation vs. hyperinflation?

Hyperinflation Special Report

This guy has really got a lot of real statistical evidence to back up his take.

hhv said...

anon at 7:56... your definition of character and unique are very different than what I'm talking about.

omc said...

I certainly see the difference between expecting to sell your house for more than you bought it for years later and speculation; goes back to the basics of economics and inflation. Nothing at all to do with what we have seen in the last few years locally. At the same time you go to move up, the other houses are worth more too so you only really shield yourself from inflation. I don't think that is greed or even slightly silly. If I bought 5 years (a house not condo) ago I would go and make myself another cup of coffee and not loose any sleep over it.

Hey ROGER, could I ask you to post the stats for this month's toal sales when you get a chance. Thanks

roger said...

Here is the latest on Vancouver for the month of January from Paul B's site:

Sales came in at 764 v. 1,819 last January. That's a 58% drop in sales activity. Inventory reached 15,066 listings, resulting in a 51% YOY increase in inventory.

MOI is sitting at 20 months vs. 5.5 months in January 08.


Just Jacks report yesterday shows that Victoria is about the same. The TV stations will be all over this in a few days when the official stats are released.

roger said...

omc said:

Hey ROGER, could I ask you to post the stats for this month's toal sales when you get a chance. Thanks

I will post all the stats on Monday when the official numbers come out. Preliminary figures from Just Jack show that sales will come in under 50% of last January.

omc said...

Thanks Roger! Can't wait for the realtor's spin on that one.

womp said...

My prediction for the VREB report:

"Even though sales are down, Chris Markham noted that the market is really heating up and that many Realtors are reporting increased activity since the middle of January."

Metaldwarf said...

I just returned home from the Howestreet.com Money Expo 2009 at the Victoria Conference Center. I only stayed for Garth Turner, as everyone else seemed to be selling something I didn’t care to buy.

The opening video by Doug Casey on “the greater depression” was very doom and gloom, end of the world, sky is falling, type stuff. He is a gold bug and shows it. Fun to watch and giggle but not my style.

The room was filled with a few hundred chairs, and it was standing room only in the back. I was quite impressed by the attendance. From my view at the back left of the seats I saw a sea of bald and grey heads laid out in front of me. The group was primarily populated with seniors and boomers, I was likely the youngest in the room at the tender age of 24.


Overall Garths talk was good, he had a very entertaining slideshow of various newspaper clippings, many including funny pictures which were worth a laugh. Garth spoke throughout for the first ¾’s of the talk, giving a review of all the things that have brought us to the current predicament, easy credit, past bubbles, etc. he made some comparisons of houses in Detroit ($300) and Vancouver ($1Million) which was lifted directly from his blog a few months back. Overall he gave thoughtful conservative advice but didn’t bring any newfound revelations, at least not for the crowd whom will be reading this post. Many of the topic he covered have been discussed here at length and was merely a rehash for me. I did, however, see many many people scribbling on notepads throughout the presentation, so for some people I am sure it was an eye opening experience.

The last quarter of the talk was on what actions we can take to best protect us if things continue for the worse. Surprisingly Garth was very tame on this subject; there was no talk of squirrel soup or living off the grid. The advice he offered was common sense, but to many I think some of the ideas were strange and new as pens franticly scribbled his words.

Contribute to an RRSP or TFSA… really should I be doing that?

Pay down debt… but I like owing other people money.

RRSP Loans… what are those?

There was brief discussion of making debt tax deductible, an incredibly shallow example of the Smith Maneuver was mentioned, as well as the concept of an RRSP meltdown. More pens scribble beside me.

At one point I glanced at the lady sitting to my left, in pink writing she had written “RRSP meltdown” followed by question marks and enthusiastic exclamations points. I leaned over to her and offered some information I wish has been mentioned by Mr. Turner but had been omitted, “RRSP meltdowns work, however, they are risky. It is possible to lose more money than you can save.” A quick glance to her husband and she drew a line through the words. For those not “in the know” the Smith Maneuver and an RRSP meltdown both involve leveraged loans and investments. If the investments perform poorly you can lose not only your own money but the money you borrowed. There is a lot of risk involved in these strategies, just ask anyone who has been doing either strategy this year, they likely are not too happy about it. I am not against these strategies, I plan to using them personally but if someone has never even heard of them they likely do not possess the investment knowledge required to comprehend the risk associated with them. /end personal rant.

After doling out some simple good points to live by, pay down debt, make your investments tax efficient, have a rainy day fund, keep some food on hand in case of emergency; common sense stuff really, Garth took questions from the floor. Most of the questions were very specifically about the person asking them so I won’t go into detail. I raised my hand to ask a question but was unfortunately not called upon, I was really hoping to ask if we could trade squirrel recipes.

All in all it was a good talk, a little simplistic for my liking, and all very based around common sense. It was worth going too but nothing new was offered to those of us who frequent these blogs.


Bullet point run down
- If you want to sell your home in the next 2 years do it NOW and be aggressive
- Garth is bullish on stocks
- Garth is bullish on energy
- Garth is bearish on gold
- Garth is hopefull but hedging his bets
- Garth thinks it will get worse before it gets better.

roger said...

Metaldwarf,

Thanks for taking the time to post a recap of Garth's talk. Looks like he soft pedalled it a bit.

Glad to see you posting again. Hardly hear from you anymore! Hope you are still around in the summer when we have the next beer get together (at 20% down from peak)

msr said...

womp,

Don't forget to bring up the terrible weather keeping buyers from leaving their homes. :P

Metaldwarf said...

Roger, I am still around just lurking that's all.

I haven't had much to add and I have been very busy with my business.

I will for sure be around in the summer. I am also supportive of more frequent gatherings.

I also wanted to say thank you, Roger for your continued informative and excellent posts. I read the bear blogs almost daily and I read everything you post or link. Keep up the good work.

roger said...

Metaldwarf,

Thanks for the encouraging words. I only wish there was a way to get the info out to a wider audience. There are still hundreds of buyers every month that could save some serious money if they just waited a while longer.

On the bright side the MSM is starting to tell it like it is. I expect this month we will see a series of stories on falling sales and prices, unsold condo inventory and the recession.

It is amazing that people will continue to buy the biggest purchase of their life even when they are told it will be cheaper in 6 months. If you look at the US just about every economist and financial forecaster is calling for more price drops but millions keep buying every month.

roger said...

California is a nice place to live and many people move their to retire. But..... prices are droppinmg like a stone. Here is the latest median price chart from Mish

Median nominal prices in CA are now down 53% according to CAR and 48% according to DQNews - and those declines are in 19-20 months!

He also has a graph of the latest Case Shiller data here

VicREBear said...

I was at Garth's presentation, too. I was a little surprised at the soft tone, having expected more fire and brimstone. Garth did mention his expectation that Victoria houses would lose 30 percent of their value over the next year or two, eliciting stunned silence in the room. I also got the impression that a lot of what he was saying was new to most of the Boomers in attendance. I guess they expected to be told how to make out like bandits by exploiting current conditions, not that they should pay down debt in expectation of things getting worse, not better. All in all, a fairly good talk, toned down for a generally ignorant and flighty audience, I think.

patriotz said...

I certainly see the difference between expecting to sell your house for more than you bought it for years later and speculation;

Expecting to sell something in the future for more than what you paid for it is the definition of speculation. Note that the two words have the same root which is also found in spectacle, spectator, etc. The buyer's rationale or motivations are irrelevant.

As for US hyperinflation, it's not going to happen because it would result in the end of superpower status for the US. Hyperinflation invariably leads to the end of great power status. No exceptions. As to how it can be prevented, check out a guy called Paul Volcker who is now one of Obama's chief advisors.

vg said...

Thanks for the Garth meeting comments, I had a ticket to go but couldn't make it. Will be interesting to see if the TC even covers the meeting. Can't see them plastering the 30% comment after all that pumping the past 2 weeks.


Like they said in the CNN segment I mentioned previuously, you can't prop up a bubble that has popped. You have to let it settle out and that takes time after the largest credit crap shoot in history.

vg said...

Garth has updated his blog with
the heading "Victoria Bust". Hilarious...was that SP getting his autograph ?

Anonymous said...

Patriotz, and why would the US be immune to the fate of every grasping military Empire before it? An overextended worn-out trapped "volunteer" military fighting a war on three fronts (Iraq, Afghanistan, and now Pakistan and soon, probably even Iran given Obama's neophyte idiocy); in debt more than any other country or Empire in all of human history; absolutely no manufacturing base whatsoever; a "nation of clerks" whose jobs are all being outsourced to India or dissolved by the tens of millions; I could go on.

You seem to think Obama and his Volker and "Helicopter Bernake" can keep pulling rabbits out of hats indefinitely. They can, but the rabbits are very, very dead, and that always seems to upset the kiddies at the magic show.

Whether you believe or not that the Federal Reserve has the best interests of the US at heart (I absolutely do not given the overwhelming evidence to the contrary) there is much to be gained by destroying the US as a superpower, or merely helping the US to destroy itself.

If you happen to live in Europe, and specifically, GB.

Saying it can't happen because it's unthinkable is like saying real estate won't ever go down because the consequences are unthinkable.

Indeed, all economic evidence leads to only one possible conclusion; the only question is a matter of how soon and how quickly, and I'm sorry, this guy has got the goods and the real stats to back up those goods.

Hyperinflation Special Report

olives said...

Roger, those stats from California are stunning, especially the 68 percent drop in only 15 months from $799,000 to $255,000!!!!!

Metaldwarf or VicREbear, was there any defensiveness or denial evident at the Garth presentation?

Anonymous said...

Metaldwarf

better to be getting these lessons at 24 then when grey haired or bald, eh?

S2

patriotz said...

Hyperinflation doesn't "happen", it is deliberately created by governments. From Weimar Germany to Mugabe's Zimbabwe.

The UK lost the biggest empire the world had ever seen without experiencing hyperinflation.

The US is not going to create hyperinflation because it would be against their interests.

Anonymous said...

Patriotz,

The US is issuing trillions in new debt to finance their massive bailout / stimulus. This debt is almost exclusively purchased by overseas governments and investors. IMO the level of US debt is approaching such astronomical levels that they will have trouble realistically paying it back. They will resort to printing more paper money and the result will be inflation. More money in circulation = inflation by definition.

Peter Schiff has a good podcast where he goes on about this exact topic.

Anonymous said...

No government chooses hyper-inflation. They just let their debt levels get too high for their struggling economies. Then they resort to the printing press to try and get out of trouble.

patriotz said...

Resorting to the printing presses is a choice. It's the easy choice, rather than implementing a more transparent system of taxation (inflation is a tax) or cutting spending or reducing corruption, which is the harder choice.

Anonymous said...

The US has an eight year history of doing unbelievably suicidally stupid things against its own best interests. I see no reason whatsoever for those policies to change in any way despite the lies the opposition made to get into power. Certainly not from the backtracking they've done since obtaining power and the flip flops before.

The Fed is the entity printing up the worthless paper cash, and the Fed has no connection whatsoever with the US government. It is a privately held corporation whose major stockholders are foreign (to America) bank interests.

I respectfully submit again that those interests have nothing to gain whatsoever by maintaining the superpower status of the US and everything to gain by crushing it as a problematic offense contractor Empire run amok.

hhv said...

Anon, here's a well-respected alternative view to Schiff's hyper-inflation theory... just because he called the housing collapse, doesn't mean he's right about all things economic.

roger said...

During 2008 Tony Joe of VREB used to spin stories on a weekly basis but he doesn't hold a candle to the new Winnipeg REALTORS® president Deborah Goodfellow.

Association president optimistic real estate will flourish in 2009

It’s Winnipeg’s time to shine, according to 2009 WinnipegREALTORS® president Deborah Goodfellow.

We’re that ember in the fire that can send a spark across the world,” she said.

She mentioned the Canadian Museum for Human Rights as an example of a project that will ignite Winnipeg’s economy, creating other investment opportunities and spin-offs.

Goodfellow said low mortgage rates are putting more buying power into home buyers’ hands. “You’re getting a lot for your money. And, people can lock into the low rates for a long time.”

“I tend not to listen to reports from California or Edmonton about dramatic declines in the real estate market,” Goodfellow said. “That’s not our market.”

“I’ve been telling clients since October that we are an anomaly in Canadian real estate — we never experience the extreme peaks and valleys of other markets,” she added.

“As a fellow from Toronto said, we are an island unto ourself.”


The only thing missing is the boomers are coming and everyone wants to live here. Maybe they will be covered in the next press release.

Anonymous said...

HHV and Patrotz: Look, Mish is a broker. He has an ENORMOUS stake in the financial system staying afloat.

The entire system collapses, all paper currency is worthless, brokerage houses and paper investments no longer exist, and the world is back onto a gold and barter standard, and where does that leave Mish?

If he's put his money where is mouth is, as broke as everyone who listened to him.

The US is justifiably collapsing. The US is being collapsed, more accurately. Those who prepare will be far far ahead of those who are hoping for a comeback.

This is it, folks. The Big One. Things are never getting back to "normal". The inmates no longer know how to run the asylum. The wizards have no mojo left.

As for our "little" island, the day when goats, chickens, clotheslines, windmills, gardens, and TRAILERS are going to fill the backyards of Oak Bay and Broadmead mansions aren't that far away.

We, who have never seen a Great Depression in our lifetimes, are about to get a front row seat to one that will make the 1930's look like the boom years of the 1980's and 1960's.

hhv said...

Anon, Peter Schiff is a broker... Garth Turner sells "apocalypse now" books. Everyone has a financial stake in all sides of the hyper-inflation/deflation debate.

The fact remains that there is very little "overwhelming" evidence for either side being the "truth."

Nick said...

I was at Garth's speech yesterday as well and it was certainly interesting. As metaldwarf said, he followed a video presentation by Doug Casey, a goldbug who seemingly predicted that the world was about to end. After that guy, Garth seemed like Little Miss Sunshine! He certainly toned down the emergency preparedness elements of his new book After the Crash. I imagine he realized he might have caused a few heart attacks amongst the greyhairs if they heard a full morning of pessimism. :)

I was interested in the reaction of the mostly elderly crowd after the talk. I tried to listen in on a few conversations and I heard at least two seperate conversations with older gentlemen saying variations of "he's probably right, but I think my property will hold up just fine." There's still an awful lot of emotional investment in the Victoria real estate market...

Anonymous said...

I didn't think it was possible for someone to be more bearish than Mish.

roger said...

VREB will release the sales stats for January sometime tomorrow. We have already heard from RE industry insiders that sales are going to be around 50% of last January sales. You may have heard the comment that last year was an unusual year and comparisons should be made to more "normal" years. Last year was the worst for SFH sales in six years as shown in this chart:

SFH Sales - A Quarterly Comparison

VREB will be doing all it can in the press release to invigorate the troops and spur the public to buy. Talk of sales picking up since December, increased spring "activity", low mortgage rates, federal budget etc. will be in the press release.

For me the important numbers are sales and inventory. Poor sales and ballooning inventory will result in significant price reductions over the next six months. Prices may be "sticky" until the spring sales season shows that the market has fizzled out.

The other thing to watch for in tomorrow's release is the average and median numbers. Expect around 130 SFH sales to be reported. When numbers are this low it only takes a few million dollar sales to skew both numbers to the high side.. That is why I prefer the CMHC numbers, which exclude waterfront and acreage sales, for observing market trends. These numbers will be available around the middle of the month. You can find a graph of this stat here.

Anonymous said...

Does anyone know how much MLS 256488, 3-1405 Mallek Cres sold for? Thanks.

hhv said...

Roger,

Already heard from a REALTOR I follow on twitter that preliminary January sales statistics are out and they "look good."

Perhaps JJ if you're around today and have access, you can give us a heads up?

Yesterday, JJ gave us 229 total sales for January. Not sure if this will be the "confirmed" number tomorrow or not. If it is, then Jan 2008 numbers were 422, and January 2006 numbers were 246.

I expect to see an "activity picking up theme" of course, but when we look closely, we can see that sales were basically on par with December 2008, which was a dismal weather/holiday month, so it really puts the "activity picking up" theme under the microscope.

The real key numbers will be total listings and total new listings vs sales. Total listings are considerably higher than over the previous several years, what I want to see is a significant jump in new listings. I expect to see 11 months of total inventory. If sales to new listings is higher than 50% I will be surprised.

PB is predicting SFH avg and median prices at $525K and $475K respectively. If that's the case, that shows a big drop in prices in the upper ranges.

My PCS isn't showing a lot of low end sales or low end haircuts. But I am seeing a fair amount of condo listings in "exclusive" neighbourhoods like Fairfield and Royal Oak falling under the $250K mark for the first time in 2 years.

Anonymous said...

HHV said...

My PCS isn't showing a lot of low end sales or low end haircuts.
-----------------------
Low ender with discount

Another haircut

Anonymous said...

Looks like the market is on fire and the bears are suddenly all worried. Interest rates are at record lows and more and more buyers are flocking to Victoria due to the mild weather and red hot economy. It's good to be an owner.

vg said...

"The above statement is from a person who claims to have additional portfolios invested with Schiff over the past 2 years. In total (not just this portfolio), my contact says he invested $70,000 and is now down to $27,000. That is a loss of 61%.

I have talked with another person who claims to be down 72%, and many others who claim 40% or more.

Schiff's entire invest thesis seems to boil down to "Buy and hold foreign stocks, foreign currencies, and commodities, come hell or high water, and hold on to them." Hell has arrived for those following Peter Schiff's philosophy."


Why wasn't this Shiff clown shorting the US market 100% if he was so sure everything US was going down ? looks like he didn't have the balls. How come he didn't anticipate the foreign effect of cashing in large troughs of US dollars if he's such an expert on advising people on investing in foreign currencies ? cause he hasn't a clue what he's talking about. 60% loss ? that's disgusting.

Doug Casey is just as bad,he cost his followers just as much buying up junior gold stocks that got hammered all last year.

vg said...

"Looks like the market is on fire and the bears are suddenly all worried. Interest rates are at record lows and more and more buyers are flocking to Victoria due to the mild weather and red hot economy. It's good to be an owner."



I was listening to some bond experts on the Michael Campbell show talking how the bond market is indicating interest rates rising soon. What will that do to buyer confidence ?

How is it good to lose large amounts of money every month ? oh right,that denial thing.

vg said...

PS how come all this talk of spring ? isn't spring in late March ? we still have 2 more months of crappy rainy weather til all the remaining sheep come out to lowball.

womp said...

vg,

Doug Casey was the first "speaker" at the Money Expo on Saturday. I say that with quotes because it was a video presentation.

I posted a bit of a review on my blog, but he came across as slightly nuts. He said governments will collapse, and if they don't, they should. He ranted about regulation and Obama and Roosevelt and Bush. He said to put 100% of your wealth in gold. He harped on hyperinflation over and over again. He advocated investing significantly in junior mining companies.

Strangely coincidental was the fact that there were a half-dozen junior mining companies with booths set up outside the speaker's theatre.

olives said...

My parents were checking out the Meadows townhouse complex in Sidney this afternoon. Apparently completed last August and still 17 of them for sale. The open houses are being reduced to 2 - 4 on weekends because apparently they haven't been getting anyone come in at all between 12 and 2.

The realtor on site advised them that if they chose to put in an offer, rather than make a lower offer than the asking price they should request GST included and a suggested $40,000 + "decorating allowance" - which would be returned to them by cheque.

I suppose not to anger those who have already purchased, but also wouldn't this skew the stats? I wonder how many sales of new townhouses and condos are also using this deceptive sales price method.

roger said...

Olives said:

The realtor on site advised them that if they chose to put in an offer, rather than make a lower offer than the asking price they should request GST included and a suggested $40,000 + "decorating allowance" - which would be returned to them by cheque.

If the buyer mortgaged the property and then got a "decorating allowance" cheque after the deal closed this might be construed as a fraudulent transaction. The bank needs to be aware of the purchase price after all discounts have been made.

roger said...

Further to my last post. Here is an article on mortgage fraud

Anonymous said...

Mining stocks are paper.

Real goldbug survivalists want gold. Not paper.

Anonymous said...

Spot on about the mortgage fraud. In years past this cash back scheme would have been caught by having an Appraisal on the property. In most cases, appraisals are not done on purchases of new condominium or town houses. The lenders accept the purchase agreement as prove of the properties worth. This is part of the deregulation of the lending institutions and loose lending policies that have occurred over the last decade.

That is now changing, as the lenders are just starting to get stung by not doing their due diligence. These cash back schemes are becoming common practice. House builders do a similar cash back scheme, but with a landscaping allowance.

For high ratio financing, the borrower is suppose to have the down payment in their bank acount 30 days before the sale completes. This would make it difficult for buyers with limited funds to do this scheme. But that does not mean that you could not borrow the down payment from a relative for 30 days until your got your cash back from the builder. But in truth, few lenders confirm this detail.

This cash back scheme becomes more prevailent at the end of housing boom as builders search to find anyway to make the sale. In new condominium and town house complexes, the builders do not want to show a reduction in the list price. Mainly because they do not want the pre-sales to come back for a price reduction.

The cash back scheme is one of those where no one seems to be a victim and therefore most do not get reported.

The buyer gets their home.
The builder gets their sale
The agents gets their commission
The bank gets their mortgage.

Who loses?
You do!
The depositor of the bank pays higher banking fees for poor lending policies.

If your buying a new condominium or townhouse, never trust the sales told to you by the selling agent.

vg said...

"Real goldbug survivalists want gold. Not paper."


I'm sure you must have your cave in Sooke picked out too along with your stack of guns and ammo... not to mention a lifetime supply of Spam.

NanHousing said...

Here is an article in the Nanaimo paper about Nanaimo and Victoria real estate.

http://tinyurl.com/bhqxa4

They conveniently changed "real estate agent" to "real estate analyst" in the article to give the guy a more neutral stance. Googling his name I was able to find out he is actually an agent!

olives said...

Interesting Roger, thanks. Did I just expose them?

NanHousing said...

Some more from that article:

"Among the realtors I've talked to, and I have no empirical numbers to back it up, we think the asking price of houses across the city has come down by about 15% since the market peaked," he said.

He cautioned however that the decrease does not mean people will lose equity in their homes.

????????? That really is something if prices are decreasing yet people can still retain their equity! At the peak people would get close to their asking prices but these days 10% haircuts are quite common! 20% down payments could easily be wiped out since the peak!

hhv said...

"Housing prices in those markets have nowhere to go during this recession but down, said Nanaimo real estate agent Charlie Parker, who admitted house prices have dropped slightly in the Harbour City.

"House prices in Vancouver and Victoria rose so quickly it was just ridiculous. They have a lot further to drop in terms of dollars than Nanaimo as the market adjusts," Parker said."


Ah, yes... we're all going down, but Victoria is going to drop farther and faster, because hey, everyone wants to live "wherever the REALTOR is sellingTM"

roger said...

NanHousing,

I also track listings and sales North of the Malahat. Sales are much slower than Victoria. There just aren't many buyers around. Nanaimo is doing better than most areas but sales are way down from last year. Lots of price reductions as well.

In places like Parksville-Qualicum and the Comox Valley there are very few sales. I suspect the number of Alberta retirees moving there has dropped dramatically in recent months. Anyone visiting in the last few months would see all the snow and think Why would I buy here?

Anonymous said...

MLS #255056 unsold on market for 102 days.

comes back as new listing #258145 with lower price.

seems like activity is picking up with price drop and doom hopes.

I am waiting for the "bang" for Jan numbers and to learn some skills on how to spin.

roger said...

anon 8:06 said:

The cash back scheme is one of those where no one seems to be a victim and therefore most do not get reported.

The buyer gets their home.
The builder gets their sale
The agents gets their commission
The bank gets their mortgage.

Who loses?


The buyer loses by not having the discount just taken off the price:

- BC Assessment will use the sale price as one factor in the determination of the assessed value of the property next year. A higher purchase price will result in more taxes for the buyer and their neighbours.

- The higher the purchase price the more property transfer tax will be paid to the BC government on closing.

The winners are: the builder who doesn't face the ire of pre-sale buyers and the negative news that may result in more price reductions; the real estate agent whose commission is based on the purchase price and the BC government who will get more tax revenue.

hhv said...

Over in Vancouver, it's very common to see "free" cars with the purchase of a home... one developer in Richmond is even "giving away" a $70K luxury Mercedes SUV with a town home purchase.

Ironically enough, in their buyer's tips section of their website, under the heading "When do I make my first mortgage payment," they suggest a hefty deposit at the time of agreement to "ensure" you get the unit you want come closing time.

Incentives or not, if there is a monetary value to them, the bank should know about them and should refuse to lend on the purchase price because of that. Unfortunately, my bet is most developers employing these tactics will have a mortgage broker on site to "assist" you in getting the "best deal."

Anonymous said...

Things are changing fast!

Lowball Haircut

omc said...

VREB stats are up and they are not "looking good" as misrepresenting agents have said!


Read 'em and weep!

olives said...

My parents condominium group had unit for sale early last year for as high as approximately $480,000 (approx 1200 sq ft). For many many months now there have been two for sale (both a 1200 and a 900 sq ft) - which are now listed at excactly the same price - $389,000. Unfortunately for both of them there is a new listing in the building (another 900 sq ft) at $329,000 - Obviously someone who actually wants to sell.

NanHousing said...

Those Vic stats really are quite something. Massive drops YOY for Condos and SFH. WOW!

Surprised about wording of the release as well. Not much spin there. Can't beleive they put "lowest sales in 18 years" in there too. Guess they want to put some pressure on sellers to sell.

roger said...

January 2009 Statistics - Monthly Analysis

December 2008 shown in ()

MLS Sales - 247 (239)
MLS listings - 3678 (3824)

SFH Average - 526.1K (548K)
SFH 6 mo. Avg. - 546K (556.5K)
SFH Median - 475K (507.5K)
All SFH Sales - 141 (140)

Condo Average - 259.7K (280.5)
Condo Median - 255K (253.8)
All Condo Sales - 62 (53)

Town Average - 394K (389.4K)
Town Median - 382.5K (368K)
All Town Sales - 32 (28 )

Year-over-Year Analysis

GV - Greater Victoria
January 2008 shown in ()

MLS Sales - 247 (464) - Down 47%
MLS listings - 3678 (3027) - Up 22%

GV SFH Average - 526.1K (606.4K) - Down 13%
GV SFH Median - 475K (530.2K) - Down 10%
GV SFH Sales - 138 (228) - Down 39%

GV Condo Average - 259.7K (349K) - Down 26%
GV Condo Median - 255K (304.5K) - Down 16%
GV Condo Sales - 62 (125) - Down 50%

GV Town Average - 394K (423.3K) - Down 7%
GV Town Median - 382.5K (393K) - Down 3%
GV Town Sales - 32 (41) Down 22%

Anonymous said...

B.C. housing market in a deep freeze


Developers worry about how to keep companies going during hibernation that some predict won't break until after the Olympics


VANCOUVER — Ward McAllister has been through five housing-market crashes since he finished university in 1982 and started working in development. But he and other B.C. developers have never seen anything quite like this one.

"I wouldn't call this a crash. It's like a market freeze. It's like everything's been held in suspended animation."