Mon Post #2: Real Estate Forecast - Part 2

Did you catch the recent real estate forecast by TD Bank?

As the Globe and Mail headlines, "Toronto, Vancouver house prices to sink 15% over 2-3 years, TD warns."

You will recall back on June 1st, we posted the May 2012 detached average home price in Vancouver.  May's total was $1,037,331, down from February’s high of $1,235,244. It means the average single family home price has now dropped 12% Year Over Year (YOY).

Some concluded that this means we are a mere 3% away from the TD prediction of a 15% drop.

But is that what TD said?

TD Economists Derek Burleton and Leslie Preston said that they expect:

"house prices in Toronto and Vancouver to sink by at least 15% over the next two to three years."

They are saying prices could sink 15% over the next 2-3 years. That suggests its in ADDITION to the 12% drop we have already experienced.

That would take the Vancouver slide to almost 30%.

More significantly:

"Mr. Burleton and Ms. Preston expect a price decline of that size over the next two to three years... having said that, a "severe shock" from overseas could speed that up."

Oh?

Is TD telling us we could see a 30% collapse in Vancouver housing prices within the next year?

Seems to be a pretty stunning forecast to me.

Wasn't it just the other day we were discussing how some thought a 30% drop was unimaginable?

It seems TD doesn't have a problem conjuring that vision.

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