Ok, I’m a little proud of this. I managed to get my library to buy a book for me and so I was the first one to read the copy I got. A brand new book and I didn’t pay a cent for it. I love my library!
Anyways, back to the matter at hand. I recent finished reading Greater Fool: The Troubled Future of Real Estate in Canada by Garth Turner. It’s basically just has one message to all Canadians. The sub prime melt down of real estate that is going on down south. Well something similar can happen here.
Obviously not a popular idea to write about. We Canadians have been on a diet of steady increases in real estate for so long we tend to forget about the last time the market went to hell on us. Good old selective memory and the cherished belief that things are different this time. I tend to agree with Garth that we have a bit of a bubble in real estate prices. When the average home owner can only afford their average house in a city with a 40 year mortgage something is not right. The real issue is how big is the bubble and how much of a correction will we have. Neither of these questions is answered in the book.
The other thing that bothered me about the book was the lack of organized thought. Garth seems to wander around a fair bit and repeat himself which makes section of the book not so enjoyable to read. I also disliked that many of the graphs he provides where printed too small so studying the data in detail is impossible to do.
Perhaps the thing that made my wife the most pissed off when she read it was the idea you should sell your house now to cash in before the bust and rent until the bust. I agree it is potentially an over reaction. Garth states that big house in the suburbs will be hardest hit and smaller houses (less than 1200 sq feet) that are close to services that downsizing baby boomer would like to buy should do alright. Really that advice is hardly new. Good location and a nice layout are key when buying a house. Ignore them at your own peril.
So overall I did enjoy reading the book. It is a nice slash of cold water to keep people from getting overly excited about their house going up in value. Something that many people could benefit from right now. Yes the book has it’s faults, but the message itself was interesting. Anyone else read this one yet? What did you think?