El predicto

You’re not just a chickenshit cockroach, you’re a sawed-off has-been, fear-mongering, bullshitting charlatan. Your so-called predictions will end up being more toilet paper, asswipe. – Blog comment, December 31, 2011.

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Once a year I start a new document for comments I choose not to publish. Like the one above. So far in 2012, it runs 135 pages, single-spaced. In fact ten of those pages were inspired by a single blog post – the one I scrawled out on New Year’s Eve, giving predictions for 2012.

This post was so popular, it even inspired one realtor to post this Haiku:

Your posts are stupid. You are a dumbass, Garth.
At your age, I recommend that you get a real hobby.
Look at all the idiocies you posted here.
Look at yourself in the mirror now.
Shake your head sideways.
Who cares about the market?
Renting just plain sucks.
You SUCK.

What inspirational words did I pen to move so many people one year ago? And after 12 tumultuous months of market turmoil, political action, economic roiling, five million hits and 310 blog posts, how did this little cockroach do? Let’s count.

Prediction: The condo market will crumble.
Obviously right. Late last year condo sales in Toronto, for example, were sizzling. Now they’ve collapsed 26%. Buildings are being cancelled, construction’s down 65% and resales are piling up. “But the demise of the virile condo market is not just a condo story,” I said. “Virgin buyers are the fuel for real estate’s continued fire, as young people discover it’s way cooler to rent the same unit for less more and more freedom, the entire food chain of housing will be affected. Consequently, this is a big story.” And it’s far from over. Score 1.

Prediction: Vancouver will be so 2009.
“The region’s unlivable for average families, and real estate’s become the new porn,” this blog said a year ago. “This year will mark the definitive end as the pendulum swings back. If you sold in the first four months of 2011, you were a genius.” Sales in Vancouver have sucked now for seven months. The average single-family home price is down 12.25%. Richmond’s nuked. The Westside is illiquid. Prices are indeed rolling back to 2009 levels, and won’t stop there. Score 1.

Prediction: Mark Carey will actually do it.
He did it all right. He quit. Not the outcome I expected when I said, “Rates will rise in 2012 as Brother Carney takes aim at the very thing which poses the greatest long-term threat: our piggy opinion of debt.” Instead of raising interest rates two quarter points, he scolded Canadians for their profligate ways, then took a job in England for $1 million a year. Score 0.

Prediction: Volatile markets will reward.
A year ago doomers flooded this blog predicting 2012 would be the year America croaked, taking financial markets along with it. Nope, I said. “This year the market will be volatile, but end with a double-digit gain.” With a day or two to go, things could change, but thus far the benchmark S&P index is ahead 12.06%, and a nice, stable balanced portfolio (40% safe stuff, 60% growth assets) is up about ten per cent. Not too shabby, and worth a 1.

Prediction: Europe will bore. Greece will choke.
While I thought a year ago those debauched, tax-evading Greeks would default on a bond or two, I also said it wouldn’t matter. “The big news is there’ll be no big bank failures, no currency collapse, no defaults by any countries that actually matter.” As we now know, Greece voted to stay in the Eurozone, Spain was bailed, France and Italy got new leaders and nobody talks about Europe any more. Yawn. Score .5.

Prediction: Obama will win. US real estate hits bottom.
“Won’t even be close. Within months of the re-election, the American housing market will finally hit bottom and start the long, slow advance.” Obama swept to power, of course, with an unequivocal mandate. Meanwhile the numbers are clear: the American real estate market is in full recovery mode, with Phoenix prices 20% higher and 186 bids recently for a townhouse in Washington. Resale prices, new home construction and sales are all surging. Don’t bet against America. Score 1.

Prediction: House prices will fall.
Prices in December, I said, will be lower than in January – which is a fail. Yes, they’re declining with SFHs worth about 12% less than in the Spring in both 416 and Van. But that 15% national decrease ain’t happening yet. Of course, it will. Score 0.

Prediction: In fact, all asset prices will fall.
A year ago I saw us standing on the threshold of deflation. Still do. I’m sticking with this one: “Houses, cars and iPads will get cheaper, at the same time the cost of gas, insurance and food rises. Asset deflation means what you owns loses value. Price inflation means what you make buys less. This is lousy news if the bulk of your net worth is in your house or a bank savings account.” Priced a tablet lately? Get a salary increase this year? Score 1.

Prediction: F will tighten.
Last DecemberI gave the elfin deity big odds to trash the 30-year mortgage and return to the traditional 25-year term as a way of deliberately cooling off the market. That’s exactly what he did. And it came with special sauce – CMHC insurance stripped from high-end homes and an end to the cash-back, no-money-down mortgage. As a result home sales have been in y/y negative numbers for eight months, and the little guy has apparently been bronzed. Score 1.

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Prediction: Most people won’t get it.
The conclusion a year ago: “The back story is one of falling asset values, rising markets, a moribund economy, higher inflation and commodity prices, declining real estate, tighter credit and few jobs.” That means people who spent 2012 paying off 3% mortgages, buying bond funds, holding gold, being afraid of financial markets or putting their TFSAs into GICs, just wasted a perfectly good year. The good news? There’s another one just like it starting in a week.

My 2013 predictions will appear Monday. Hold the abuse.