Unable to see the forest for the trees?

Locally the chatter amongst those who watch real estate revolves around whether or not the bubble has finally crested.

Inventory is up and September's numbers revealled a 5% drop in the average price from last month and a 10% drop in the SFH average from the high-water mark in May of this year.

Local realtor Larry Yatkowsky summarized it by saying:

• "Detached home prices continue a dramatic reversal from the gains made this spring. Vancouver’s average detached price has dropped more pounds for the second month in a row. From May’s scale tipping all time high of $1,223,421 that scale’s dial has inched its way downward beginning in June at $1,215,265 to reach September’s $1,104,896."

Our friends over at VREAA captured an excellent comment posted by realtor Rob Zwick in his ‘Market Update’ for  Oct 2011:

• “I have been eagerly awaiting this month’s statistics to see what sort of bounce back, if any, we would see after the slower Summer season. The answer, somewhat surprisingly, is that the we didn’t seen any bounce back in sales activity at all – in any of the neighbourhoods we look at."

Oh my! So does Zwick see this as the start of the 'Great Unwind' in our housing bubble? Of course not.

• "It is my belief, however, that the commitment to hold interest rates until 2013, in conjunction with positive employment and immigration numbers, should keep prices steady through to next year.”

Zwick's optimism is in line with all of those who can't see the forest for the trees.

“We have not seen clear evidence of a bubble in the housing market in Canada.” – Jim Flaherty, Canadian Finance Minister, news conference, NYC, 5 Oct 2011

“Well I guess the first question is, is there a real estate bubble at all? … We had a financial crisis, the largest we’ve seen since the Great Depression, we had an ensuing global recession, and if that isn’t a trigger or tipping point, for any kind of inflated market to see a major correction, I don’t know what is.”- Cameron Muir, Economist, BC Real Estate Association, CTV 27 Sept 2011

“Vancouver real estate no bubble says economist”, cbc.ca quoting Brian Yu, economist, Central 1 Credit Union, 15 Sep 2011

“Canada’s market is not in the midst of a bubble” – Sal Guatieri, senior economist at BMO Capital Markets, marketwatch.com, 29 Mar 2011

How reassuring are all these assertions there is no bubble to unwind?

It brings to mind this comment from US Republican Presidential candidate Herman Cain on August 17th, 2005.

Feel better?
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