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May 13, 2016 | Pressure

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

BANK OF MOM modified

Three young women. Three cities. Three stories.

As you might imagine, this pathetic blog generates a lot of mail. I weed out the Nigerian bank executives offering large finder fees, the dumbass lawyers who think I just defamed someone for quoting their own Facebook page, outraged mothers, irate realtors and females attracted by my chiselled pecs, and read the rest. It’s a trip. Especially when it comes to what real estate is doing to people’s brains, and their families.

So here are the three from the last 48 hours I wish to share with you. Zoe in Toronto. Kate in Van. Linda in Calgary. The first two need to know about the last.

Zoe’s story
“Longtime reader, came to see you give a talk in Mississauga (thank you for that). My husband and I are early 30’s with a toddler and a perfect Puli dog, renting in a nice area of Toronto. We bring in about 170k combined (mostly thanks to my rock-star electrician/engineer husband) I’m a front-line public sector worker that loves making Canadians happy but also appreciates the flexibility for my son rather than a higher salary. We have zero debt and about 300k in total liquid assets that I’m managing in a diversified portfolio. Maxed RESP. Good pensions for both of us.

“Why do I write? Because it’s HARD to keep on this contrary path long term…it’s HARD to have your in-laws (and almost everyone else) think that you are the only reason their son isn’t “actually” successful because he rents like “a failure”. I just have such a hard time with the idea that people outright and vocally pity me. I know it’s easy to say to ignore them (and I do with occasional rebuttal) but as a contrarian and a female one at that…the pressure and anger thrown at me is very hard to deal with and nearly constant. Any attempt to rebut the housing cult arguments are met with further head shaking even to the point of questioning my fitness as a mother!

“I know you’re not a therapist (well maybe in some respects) but how do you propose holdouts deal with the pressure, the conventional wisdom is SO strong that I’ve had people call me vapid (to my face) for refusing to buy despite having substantial alternative financial success and a masters degree in a business discipline. I’m just unsure how to deal with this insanity moving forward. I just thought I’d let you know how heavy the pressure is on families that don’t give into the cult. Thank you for what you do.

Kate’s story
“What I can tell you is how much I love your blog. I love your advice, your humour and your down to earth way of looking at things is helping me to make better decisions. I also love to read your blog because I get negative comments constantly for not buying-even though we could get a million dollar mortgage; but if we spent that amount, we would have to use most or all of our savings, and then if myself or my husband gets laid off/loses our job, or interest rates rise, we are screwed. It is also hard because people look down on us and “wonder” why we still rent (which makes me feel like crap). Then there is the constant comments on how we need to buy now or we will never be able to buy anything.

“Anyway, I too believe cheap money is fueling the market and am willing to wait until rates increase and homes start to fall here in North Vancouver. I just hope that bloody well start to happen in the near future.

“Anyway, keep up the great work. I really appreciate it. And when house prices start to fall, and we buy a house at a price we can afford, a bottle of scotch to say “thank you” for all your hard work on the blog will be coming your way.

Linda’s story
“I’ve been reading your blog for 2 years now, and thank you so much for all your information you give.

“My partner and I bought a condo in Cochrane almost 3 years ago for $270,000 and are thinking of selling it and moving to Calgary closer to his work. However, with prices now, I’d be surprised if we could get $240,000 for it, and after all the realtor fees and legal fees etc, it would be closer to $220,000 putting us underwater and saying goodbye to all our “equity”.

“My question I was hoping you could give an opinion on is, will the Calgary and area housing market be better in a couple or few years or will it be worse? If it’s better, maybe it’s worth holding onto our place and selling when our mortgage is under $200,000 and the condo is worth $260,000 plus, but if it’s going to get worse, maybe it’s better to just cut our losses now and walk away with nothing or a bit of debt, instead of waiting a couple years and realizing that prices have fallen under $200,000 entirely. I’m heartbroken and torn.


Kate and Zoe – we live in days of a housing cult. It’s a speculative orgy in which many have gambled everything on a single asset, shouldered massive debt to do so, and are utterly invested in promoting it at every turn. As with all manias and addictions, the obsession has squeezed out respect for others, logic and perspective. When close relatives tell you to buy or else, they’re reinforcing their own decisions. It’s about them, not you. That’s when families fail. Over a stupid house.

Linda – you’ve learned. Remember this lesson. You could have lived in the same condo, paid less as a tenant, lost nothing, retained your freedom, and regret nothing. Is Calgary coming back, or on the precipice of harsher times? Nobody knows. But you gambled once, and lost. Why do it again? The greatest gift we have is time, not equity. You’re wasting it.

Okay, back to the Nigerians. At least they’re funny.

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May 13th, 2016

Posted In: The Greater Fool

One Comment

  • Avatar Fred Roberts says:

    For Linda – almost all the signs I am seeing is there will be much more pain coming in the oil patch. That doesn’t give much comfort but it may be better to cut your losses while you can.

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