And the band played on...

Some may be blissfully blind, but others appear to be gleefully blind.

And throughout it all, our American cousins shake their heads in disbelief.

Over at seekingalpha.com Rolfe Winkler looks at the Canadian housing bubble and declares, "so much for Canadian sobriety."

Winkler notes that the average price for a single detached home in the Village on the Edge of the Rainforest now exceeds $1 million, that prices have climbed 23.3% in just 12 months, and that prices are now nearly 3% higher than they were before the housing market crashed.

The Americans know where we are headed.

Of course the gleefully blind proudly proclaim that "because of the economic rebound. And the Olympics. And the warm winter [here]. Vancouver is different."

The rational is always, "it's different here".

Meanwhile Winkler makes the point that all R/E contrarians make:

"Household debt to income in Canada is now more than in the US. All the usual metrics to gauge whether housing is overvalued, eg House Price/Income or House Price/Rent are at levels up to over 30% from their long-run average. These are normally consistent with an overpriced market that is due for a correction; the question is when, as often these things persist for much longer than most people dare to guess. If Canada’s banks are behaving so responsibly, where are households getting so much leverage?"

Cause for concern?

Not according to the Bank of Canada who, according to Reuters, says "Canada's housing market is not in a price bubble but seems firmly valued."

That will be a quote for the ages.

This all comes just days after a CIBC study found that household debt - mostly mortgage debt - is growing three times faster than income.

And all of this comes at a time when many analyst share the sentiment that "the current rebound in the economy is a statistical mirage orchestrated by record amounts of monetary and fiscal stimulus that are simply unsustainable and actually risk precipitating a very unstable financial and economic backdrop in coming years."

One blogger I follow compares the current economic conditions to the Titanic disaster and suggests that we are at about same point in time as that famous ship was after it struck the iceberg.

Instead of a band playing on deck as the vessel took on water, we have the equivalent of an IMAX theater, complete with surround sound, to keep us occupied as we meet our fate.

Regretfully, I couldn't agree more.

May I have the next dance?

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Email: village_whisperer@live.ca
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