We managed to get to our first Leafs game last week.
That’s Aidan and myself at the 5-2 win over the Flyers…a game in which Tavares scored a hat trick.
I don’t know if it’s just me or what, but our captain, John Tavares, is looking like he is skating faster this year than he ever has.
It’s giving me a strange confidence in the team even though the start to the season has been a roller coaster of terror so far.
We are on our 3rd goalie so far this year already, and this weekend we may play our 4th and the season is barely a month old!
The great Auston Matthews hasn’t found his scoring touch yet and our defence is always in question.
But…
Because I’m an insane, die-hard, life long, Leafs' sufferer, I have been trained to have high expectations in the face of insurmountable odds.
So with that I will say…this is the year that we win the Stanley Cup…it’s basically a lock!! LOL!
Let’s turn our attention from one messy situation to another…
The Canadian and Toronto real estate market.
There’s no doubt things are slow out there, very slow.
This is in fact, the highest real estate rate increase that we’ve ever seen since our family had serious real estate trouble back in the early 1990s.
That’s when rates went up roughly 3% in 30 days and the market bottom fell out.
A property that our family was “flipping” went from $750K to $450K in about 4 months.
So it’s shocking to us to see this number of listings on the Toronto real estate market.
Check out these charts from Ben Rabidoux’s service, EdgeAnalytics.ca:
It’s stunning to us that in the face of the slowest real estate market we can remember…
And, in the face of tremendous interest rate increases…
We only see 2.5 months of inventory on the single-family home market. Even the condo market, which swings much more wildly, currently only has 3.5 months of inventory.
Absolutely shocking.
This tells us there is an epic standoff happening.
Sellers are just deciding to sit this out. They are choosing not to list their properties for sale at the moment, because if they were we would see much higher months of inventory on the market.
Longer term, with Canada increasing its immigration target to 500K people per year (double what it was ten years ago), and no big increase in housing supply, we may be looking at the floor in the market right now.
By very early Spring we should know for sure.
If rates keep riding high and people are forced to sell, the Spring market is where we’ll see a ton of new listings.
So if these numbers start jumping up in the Spring, we may see further price movements down.
But if inventory levels stay around here then it would seem to us prices aren’t going to move much further.
And of course, there are so many variables to this:
There’s so much to this.
The real estate market can change its dynamic in an instant.
But the bottom line is this…
We’ve always believed that you should never buy a piece of real estate that you’re not comfortable holding for at least 10 years.
So even when we were doing 2-3 year rent-to-owns, we would never buy them unless we felt we could hold the property comfortably for ten years.
We’ll keep sharing this type of data so we can all keep a close eye on what’s going on.
And one more thing…
Look, in the last few weeks, we’ve seen some shocking stuff happen.
In the UK, as we shared last week in the email, pension funds who believed they owned assets were almost sold to cash because of volatility in the UK bond market.
Meaning that pensions that thought they owned things like a REIT were just going to be sold to cash in an instant.
Right now in crypto land a huge exchange, FTX, looks like they were doing funny business and trading money that may not have belonged to them.
Many people are being caught up in the mess and can’t get access to what they thought they owned on that exchange.
In today’s world, perhaps more than ever, you need to have CUSTODY of your good assets.
It’s why we like good income properties.
They can be a hassle to own sometimes but the title is in your name directly and no one can “sell your asset to cash” in an instant against your will (as long as you stay in good standing with mortgage, taxes, etc.)
It’s why we like gold. Not the paper/ETF stuff. Gold bullion that you can take possession of and put in your safety deposit box.
It’s why we like Bitcoin. We can take it OFF the exchange and custody it ourselves with no brokerage or exchange or financial institution having their hands on it.
Is custodying assets yourself a hassle?
Yes.
Does it give you peace of mind when you see pensions blowing up, exchanges blowing up and freezing accounts?
100% yes!
We are moving from a world where:
Inflation was the number one problem...to a world where “credit worthiness” of the financial institutions you deal with is your problem.
And finally, to a world where LIQUIDITY of where you have your investments is a problem.
Prepare now and prepare accordingly.
It’s a mess out there but if you do your homework you can dodge a lot of what lies ahead.
Keep learning, keep reading, keep studying…know what you own and hold direct custody of at least some assets.
The good news is this:
Times of great change bring great opportunity.
Stay alert to all of this.
And when the Toronto Maple Leafs win the Stanley Cup this year everyone is invited to the parking lot party in front of our offices that we’ll have!!
Let’s focus on that!! LOL!
Hope you’re having a great week, everyone!!
Tom & Nick
