Our housing bubble is now mainstream news.
At the same time the active inventory backlog surged 16.8% and new listings were up 14.4% from a year ago.
"The event’s just begun. This was a lesson bitterly learned by those early vultures who swept down on US real estate in early 2006, smelling blood, only to end up catching a falling knife. After doubling in value over the last eight years, with the economy marking time, salaries trailing inflation and unaffordability off the chart this market is not going to clock out at fifteen per cent. If prices can dip 12% in a few months, they can decline 40% over the next 18 months."
Let’s start at the highest average price ever reached in Vancouver for a detached home – a mere $1,235,244. Now let’s also assume this market is on the skids sliding down the drain faster than we think to bottom out at something most of us would not imagine – a market that drops so much it hits May 2009′s Average Price of $831,171. With a price drop of $404,073... that's a 32% drop from the all time high.
"I would agree with prices dropping but your prediction is beyond impossible. It is basic economics and as you can see from the various RE blogs that there are people sitting on the sidelines waiting for the drop to enter into the market. There are many. These people will support the price and keep them from dropping beyond 20 to 30% as rates continue to stay low."
My prediction, as you know all too well, is for a drop of 70-85% when all is said and done.
With apologies to Rod Serling...
"This highway leads to the shadowy tip of reality: you're on a through route to the land of the different, the bizarre, the unexplainable... Go as far as you like on this road. Its limits are only those of mind itself. That's the signpost up ahead - Next stop... The Bubble Bursting Zone."
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