The shocking truth about the value of your home

New evidence shows that Canadian prices could go down, and stay down, for a decade

http://blog.macleans.ca/2009/02/23/the-shocking-truth-about-the-value-of-your-home/


That’s part of the reason why David Lereah, the chief economist for the U.S. National Association of Realtors (NAR), kept pumping out the optimistic outlooks. He has since complained publicly about the pressure he was put under by his bosses at the NAR to toe the line. Now the U.S. is mired in the worst housing crash the country has ever seen, and Lereah has been discredited. He’s left his job at the NAR, lost millions in his own real estate portfolio, and he has been largely ostracized by his former colleagues.

We shouldn’t smugly assume that the same couldn’t happen here. One of Canada’s top economists, who spoke on condition of anonymity, says that he questions a lot of the numbers coming out of the real estate sector in Canada. “There’s clearly a lot of spin,” he says. Even the CMHC, which promotes home ownership and depends on home sales to sell mortgage insurance, has an interest in seeing the market prosper. “There is quite a lot of uncertainty regarding the market in general right now, and there are too few uninterested parties who are giving any sort of reasonable analysis on that outlook.”

That leaves just one question: if the Teranet futures market is right, and house prices are about to embark upon a long, slow decline followed by an anemic recovery, what will that mean for Canada? On the positive side, it will mean thousands of families who can’t currently afford houses may gradually see them fall within reach. But the negative fallout will be painful, long-lasting and will touch us all. It will mean more lawsuits against people like Riaz Kassam, who get trapped by tumbling prices. It will mean a huge drop in the wealth of millions of Canadians, as their biggest investment slowly sinks in value. It will mean consumers clamping down on their spending because they feel poorer, contributing to the general economic decline.

CREB (Calgary RE board) Director Wegerich said " I think it's picking up and I'm fully encouraged by what I'm seeing right now. She claimed that it was a great time to buy a house because Prices are at an ALL-TIME low!


feb 2006 sfh sales 1,804
feb 2007 sfh sales 1,982
feb 2008 sfh sales 1,252
feb 2009 sfh sales 825

feb 2006 condo sales 918
feb 2007 condo sales 845
feb 2008 condo sales 562
feb 2009 condo sales 343


The SFH average price is now $415,568.....down $90,352 from the 06/07 peak......a 17.8% decline.

The CONDO average price is now $268,970.....down $63,267 from the 05/07 peak.....a 19.0% decline.

The SFH sales volume is now 825.....down 1,447 units from the 03/07 peak....a 63.6% decline.

The CONDO sales volume is now 343.....down 683 units from the 03/07 peak.....a 66.5% decline.

Listings are rising again......up almost 20% from their lows. And spring isn't here yet......

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What message she have for people who lost 90K?
How do you read CREB’s Director Statement after reading data and current economic conditions?

Chief economist Mark Zandi of Moody’s Economy.com forecasts a possible “mild depression” scenario, in which the average price of a home — already down 27 percent from its peak — could fall another 20 percent. What he does not tell how far home prices could fall in a worst-case, 1930s-type depression scenario.

As much as 80 or even 90 percent fall was witnessed from peak to trough during depression.

Meanwhile, commercial real estate prices could fall with equal speed. The issuance of commercial mortgage-backed securities plunged 95 percent last year … S&P expects their delinquency rates to triple this year … and the resulting credit shutdown is already driving prices into a tailspin.

Keep well,

Cheers!

I just heard on the radio that bank of canada going to reduce prime rate again to around .5%

would it possible that will boost sell ?

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'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)

Quote:

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Originally posted by Blue_Peafowl

I just heard on the radio that bank of canada going to reduce prime rate again to around .5%

would it possible that will boost sell ?

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Sanjeev Manocha, MBA
Real Estate Sales Representative
Accredited Buyer Representative (ABR)

Re/Max West Realty Inc, Brokerage
96, Rexdale Blvd., Toronto

Mobile: 416-843-7600
Office: 416-745-2300
http://www.manocharealty.com" rel="nofollow">LINK

You will hear lot of news from media, Banks and Real Estate Board's expert that it's a life time opportunity to buy home. But it's not going to make any change as common man is struggling with other high priority issues and they understood the game played by banks, media, RE boards and anyone whose getting paid by pimping RE or stock market.

If you think low interest rate will improve RE market then you are more optimist than Obama. These low interest rates are not going to do anything but creating problem for long term.

Government cannot produce the funds out of thin air; it must raise them from taxpayers. Means- down the line there will be 10% interest rate. Nobody is talking about that as this is not foreseeable problem right now. Can you afford current overpriced home at 10% rate?

http://www.europac.net/#

The mere introduction of paper money into this economy only increases the ability of the butcher, baker, and candlestick maker to bid up prices (measured in money, not trade goods) once goods are actually produced again. The only way to restore actual prosperity is to repair the destroyed equipment and start producing again.

The sad truth is that the productive capacity of the American economy is now largely in tatters. Our industrial economy has been replaced by a reliance on health care, financial services and government spending. Introducing freer flowing credit and more printed money into such a system will do nothing except spark inflation. We need to get back to the basics of production. It won’t be easy, but it will work.

President Obama would have us believe that we can all spend the day relaxing in a tub while his printing press does all the work for us. The problem comes when you get out of the tub to go to dinner and the only thing on your plate is an IOU for steak.


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I am not a RE professional and here is my take:
If you can keep your home then it’s a best scenario for you. If you can not and want to sale then do it today means ASAP as you have very small window to jump out. If you are a buyer then keep away from RE. Where is the bottom in RE? You will get it as RE market will not going to jump overnight.

Quote:

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Originally posted by Blue_Peafowl

I just heard on the radio that bank of canada going to reduce prime rate again to around .5%

would it possible that will boost sell ?

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BNN.ca has devoted whole last week discussing about "Real Estate", i heard these discussions and thought they were realy good.

Incase you are planning to buy, it might be good idea to listen to them.

http://watch.bnn.ca/#clip142896

http://watch.bnn.ca/#clip143317

http://watch.bnn.ca/#clip143764

http://watch.bnn.ca/#clip144168

http://watch.bnn.ca/#clip144597

Enjoy in your free time