The Greater Fool – Live in Vancouver

Garth Turner (photo credit PH, 8-20-2012)

Last evening I was among a mostly under 50 year-olds crowd of 1200 who jammed a downtown Vancouver hotel ballroom to hear blogger, financial advisor,  Garth Turner shape perspective and confront disillusionment with realities of real estate markets.   Turner, former member of parliament, business journalist and author of numerous investment advice books, has become somewhat of a rock star, feeding his “blog dogs” at greaterfool.ca.  His entertaining and cautionary posts on real estate ( “house porn”) bring website hits measured in the millions.  His talk last night was billed as “a chat about the future of real estate and where money is best placed in a volatile world.”
His fast-paced presentation revolved around The New Normal – characterized by glacial economic growth and weaker commodity prices, and indebted families spending less.   He referred to the frenzied buying in the Vancouver real estate market  between 2009 and 2011 as the “delusional period”.   “In 2012, the 15% price correction and 30% collapse in sales foreshadows what is yet to come.”  By the time things trough here, he sees a 40% per cent drop in average price, with a return to 2005 levels.  He connected the dots – illustrating how a price correction trend underway in 2008, averted at that time by emergency interest rates and looser lending rules, has been re-established in 2012.  Turner’s response to those who say “But it’s different here—everybody wants to live in Vancouver.”  “Everybody wants to live here, but nobody can afford it!”.   Turner suggested that it doesn’t take selling pressure to result in lower prices, with a reminder that the law of supply and demand will govern what happens.   Check out the accuracy so far of Turner’s 2012 predictions offered back in December here.  His summary of last evening is available here.

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