House prices to go flat?
There’s an article in today’s Vancouver Sun about the average cost of carrying a mortgage in Vancouver – It currently costs an average of $2,322 per month for a mortgage on an average house in greater Vancouver, and that’s IF you put 25% down. The subtitle on this article is ‘Vancouver area close to levels last reached before previous downturns.’
There’s a graph attached to the article that shows the two previous market peaks they compare today’s prices to and its kind of scary, both peak years had a huge drop after the peak.
“We haven’t been where we are today since 1994 and 1989 which were both peak years in their respective cycles,” Cameron Muir, senior market analyst with CMHC, said in an interview.
The study supports other surveys that suggest real estate prices will level off as homes become less affordable, although Muir doesn’t expect that to happen before next year.
Although the CMHC doesn’t seem to think prices will drop like they did after the two years today’s prices are compared to, they do think prices will level off, which is a soft way of saying they will stop increasing at the rate they have in the last couple of years. This is completely unacceptable! If I want an investment that will stay flat I’ll bury canning jars full of Canadian Tire money in my backyard. I suggest we boycott the CMHC until they can GUARANTEE that prices will continue to increase by 20% per year to infinity.
September 13th, 2006 at 5:52 pm
d_oush is really brainwashed by his own success. I remember when the Tokyo market tanked, you couldn't sell a house if your life depended on it! Just standing by a house for sale would cause the money in your wallet to melt!
September 13th, 2006 at 2:36 pm
HAHaha! anonymous, that was juvenile but funny.
September 13th, 2006 at 2:26 pm
clear thinking is not d_oush's bag…
September 13th, 2006 at 2:05 pm
I don't know why people still think they should invest in RE. Prices are slowly decreasing. Some places remain hot but it's not a good investment when there is a slight increase in prices. Not smart at all.
September 13th, 2006 at 1:53 pm
You do understand that all levels of the market can soften and prices can still go up in the short-term right?
September 13th, 2006 at 12:45 pm
"This does not mean that apples to apples prices are increasing. it means the bottom of the market is softening before the top of the market."Uh.. except I saw an argument recently that its the market for houses above 1 million dollars that is supposed to be 'softening' so which is it? If the market for cheap property and the market for high-end properties is 'softening' how come prices are still going up?
September 13th, 2006 at 11:16 am
"Sure, house prices will go flat, and maybe you'll be able to buy a loaf of bread for a nickle again too! Never mind that even with a lower number of sales in July and August prices are STILL going up. Face it, the secret is out. This city is a good place to invest and live. "What we saw in the US after the peak of sales was about a year of declining sales, increasing inventories, and increasing median prices. This does not mean that apples to apples prices are increasing. it means the bottom of the market is softening before the top of the market. For example, if below average home sales drop by 20%, but above avg home sales drop by 10% in volume, the median price will actually rise!You must look deeper than just the median and average price figures to understand the market
September 13th, 2006 at 10:55 am
d_oush said… Sure, house prices will go flat, and maybe you'll be able to buy a loaf of bread for a nickle again too! Never mind that even with a lower number of sales in July and August prices are STILL going up. Face it, the secret is out. This city is a good place to invest and live. Sales are crashing, inventory is rising, but prices stay up – see a problem? If you don't then I have some really great land in Florida to sell you. You just have to drain it and run from some gators, but I'm sure you'll see how great a deal it is.
September 13th, 2006 at 10:55 am
i wonder what the next big can't lose investment fad will be?beanie babies!
September 13th, 2006 at 9:58 am
D_oush, how do you remain so resolutely positive in the face of ever increasing signs that the party may be over? Is it drugs? Where can I get some?
September 13th, 2006 at 9:35 am
Sure, house prices will go flat, and maybe you'll be able to buy a loaf of bread for a nickle again too! Never mind that even with a lower number of sales in July and August prices are STILL going up. Face it, the secret is out. This city is a good place to invest and live.
September 13th, 2006 at 9:32 am
Yeah, by the time you see a hot investment thats rocketed up it's probably too late to reap the rewards.. I wonder what the next big can't lose investment fad will be?