Civility Lost

When someone criticizes real estate pundit, Garth Turner, their blog often gets inundated with not-so-friendly comments from Garth’s followers. Case in point are these comments left on Greg Williamson’s blog recently.

It seems Greg put out a web video about future mortgage payment shocks that questioned Garth Turner’s grim real estate views. Turner’s followers barraged Williamson with some of the rudest blog comments we’ve ever seen.

This is not meant to be a commentary on Turner or Williamson’s viewpoints.  Each have their own valid beliefs.  The point is this.  There’s no place for hate-filled commentary in a rational debate.  If adults can’t get across their points with civility, they don’t deserve the airtime.

Props to Greg for standing up and publicly defending himself.  He did not delete one post (that we could see), despite commentators hurling expletives and making numerous tasteless references. Greg is far more tolerant than we would have been.

  1. I do agree that a real discussion should be civil and we should avoid getting personal. This is not productive. Seems people have had it with the tired mantra that real estate will only keep going up and that now is a great time to buy and so forth.
    I guess, he should have seen it coming?

  2. Chris,
    You’re absolutely right about people becoming more skeptical of the real estate industry’s positive spin machine.
    I think it creates a credibility issue when stakeholders constantly preach about “buying opportunities” every time there’s a month-over-month price decline.
    Hopefully more real estate practicioners learn to admit they don’t have a clue where prices are going. The things that matter most are what we can predict, like the client’s personal finances, risk profile, long-term goals, and their available real estate/financing alternatives.
    Cheers,
    -rob

  3. I’ve left a comment over at Greg’s blog, and I think he’s doing a great job. I’m finally at the point where I’m going to have to write a post about why Garth Turner is a pretty sleazy book salesman. He’s scoring points at Greg (and a lot of other people’s) expense, and that’s not cool.

  4. I think the biggest problem is having to listen to people who profit from selling real estate continue to tell us to buy. I consider myself an investor and right now appears to be one of the worst times to buy in a decade. If you are buying a house, you might be okay, but I think the prospect of buying will look better sometime into the future and not exactly right now.
    Doesn’t this moment appear very much like an unsustainable bubble? I certainly do. Even if “Canada is different” which is unquantifiable by any measure other than continued consumer spending. Meaningful measures like job loss, are all bad and very comparable to the US. Real estate agents should be clawing back on the cheerleading and get back to grassroots so as to better help their clients achieve their goals instead of broadstroke comments about real estate in general. Find your clients good deals and you’ll sell real estate. It’s simple.

  5. I have noticed that Garth’s statements regarding interest rates have been contradictory and lacking analysis. For example in this post Garth advocates choosing a variable rate mortgage by comparing to an obscene 10-year term. link
    Here is an article from April where he states that “Low interest rates are here to stay so avoid rush buys”.link
    Now he is boasting that he accurately called increasing rates. From June 10th link
    Some days ago, I made three predictions. In a year…
    * The prime rate will have doubled.
    * Oil will be $100 a barrel.
    * The dollar will be at par.

    And here he mentions when a 5-year term resets payments will be double from June 16th. link
    Anyway, should you buy? Sure, if you want no cash reserve and less disposable income. If you want to impress your friends and prove you’re not defective. If you can handle mortgage payments which will likely double when you renew in five years.
    Garth did not elaborate on the scenario that would cause payments to double.
    The question here is how much would interest rates have to rise for payments to double? I figure rates would have to more than triple from 4.39% to 14.5%
    Assume mortgage with the terms:
    25-year amortization
    $300,000 initial amount
    4.39% 5-year fixed rate
    =
    $1642.13 monthly payment
    At the end of 5-years the mortgage balance would be less. For payments to double the new mortgage would need to be:
    20 year amortization
    $262,906.73 balance
    14.5% rate
    =
    3284.68 (double original)
    So for payments to double interest rates would have to go from 4.39% to 14.5%. If Garth says this is likely then he is contradicting his earlier post regarding going variable even with his insane example of the 6.85% 10-year term.
    Of course this doesn’t matter to Garth because being entertaining sells more books than number crunching.

  6. Thank-you Rob and Melanie, I am relatively new and not nearly as experienced as you and others in blogging “rules” but feel that in order to be humble and transparent I will show all comments (except really profane/abusive that clearly does not add productively to the ongoing conversation). You should of seen some of the ones I did delete…LOL (about 3 or 4).
    Anyway, I have been reading Garth’s blog for a long time and I just can’t believe what he does to some people who mistakenly ask him for his advice, not to mention his army of fanatics that get unleashed (I met them all).
    I decided after getting many supportive comments, and even more private messages to my facebook and twitter accounts that when appropriate I would try and hold a respectful forum for people to have a constructive conversation about the people that he destroys on his blog and answer their questions.
    I did one today and would appreciate your comments. Rob, you are so right about the real estate spin machine and I believe we have similar business models.
    As I have stated a few times lately, I believe our job as prudent real estate professionals is not to talk people who comfortably qualify for the house they are proposing to buy, out of buying, but rather ensure that they are aware of all of their options, solid mortgage planning strategies, and to ensure the mortgage plan fits their overall financial wellness.
    Keep up the good word, we can make a difference.

  7. The type of comments that the person received probably come from frustrated citizens who may have bought a house that is now losing money and are paying for their home using the highly dangerous mortgage products that are currently being offered to buyers.
    Realtors are fast falling out of favour with the public for the same reasons.

  8. Opinions make the world interesting. Everone is entitled to an opinion. The only “opinions” I do not respect are those that are badly distorted by fact.
    The two authors you mention have formulated their opinions on facts that while debatable, are reasonable.
    I would suspect that the”trash” comments are from people with little knowledge or facts on the subject.

  9. Mike,
    Those comments were not coming from people who are losing money from real estate they own. They are comments coming from people who own no real estate. People who took Garth’s advice and sold waiting for the market to completely crash. People who have probably never owned real estate in the first place. Some are hoping for 50% decreases. Hell, there is one guy with a newborn, living in a small apartment with the crib in the living room. He says he’s sitting on all his cash waiting for the big crash.
    I honestly don’t know what’s worse. Garth’s over the top scare tactics so he can peddle a few more books or his followers hoping millions suffer so they can profit.

  10. My issue with real estate pumpers today is the level of debt it takes for one to get into a home. I’ve been taught that one should not spend over 30% of monthly income on shelter (including heat, taxes etc.)This effectively prices first time buyers out of the market, unless they have wealthy parents putting up a six figure down payment (another moral hazard). With the level of student loan debt young adults are saddled with so early in life, owning real estate is practically impossible without becoming dangerously overleveraged. I, personally, feel it is irresponsible for lenders and brokers to be advancing huge amounts of debt to first time buyers that they will be stuck with for 35 years. Interest rates WILL go up. Who know how bad it will get but borrowing right now is very risky. We have witnessed unprecedented real estate carnage in the USA – why would anyone want to expose themselves to the same scenario here? Its irresponsible.

  11. The only thing irresponsible is someone who tells other hard working honest people how to live their lives.
    If I want to buy a house with 5% down and a 35 year amortization that is my business. Lenders won’t approve me unless they believe I’m good for the money. I won’t apply unless I believe I’m good for the money.
    If that is not sufficient for you then that’s your problem.

  12. The impression I get is that if the realtors and mortgage brokers had their way we’d all be spending 80% of our income on shelter and signing up for food bank hampers. Young people today are saddling themselves with unprecedented debt – being egged on by self-interested brokers who only seek to expand their bottom line. We have unprecedented household debt that far exceeds income. The level of professionalism seems to be sorely lacking in this industry. Real estate hubris brought down the US economy. Clearly (most of) Canada is following suit. Sad.

  13. Debate versus argument has always been an interesting one. In a debate, you are trying to make others see your side of the issue. In an argument, you are right and your opponent is wrong. In a debate, you don’t have to do a 180, but you can conceed that your opponent has a point. In an argument, you are right and your opponent is wrong (do you see a pattern here). If we use debate, and have an open mind that there are gray areas and other opinions, we would never have this type of black and white argument again. I appreciate both Greg and Garth’s points of view, but…neither is “right”. They are both just opinions.

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