Plunging consumer spending, the loss of almost 150,000 full-time jobs in the last 60 days, the crash in commodity prices, collapsing corporate profits, the bankruptcy of Nortel, diving home equity and a deterioration of national finances which is without precedent.
Our Canadian government will spend at least $64 billion more than it takes in over the next two years and we will have gone from a $12 billion surplus to a $32 billion deficit in only three years. All this debt means looming inflation later. We saw this in the 1970s. Once this mess is over you can be guaranteed that the carrying costs of your mortgage will double.
And yet the barrage from the Real Estate Pollyanna's continues.
Today we hear from Bob Rennie, the city's most famous realtor, who on Friday said that mortgage rates, which have dipped below five per cent, making it a great time to buy.
"I think there's some really good buys out there," he said. "You've got to look at interest rates, and take advantage of them." The financial and corporate blowouts will be done by next September, he predicted, arguing that developers have reacted quickly to the downturn and are now eager for an upturn.
"Supply is really going to quickly show that the tap's been turned off," said Rennie. "I think we'll come out of this in 2010." For sellers, Rennie suggested that it's better to sit tight.
Chiming in to this orgy of optomism last Friday was Cameron Muir, chief economist with the B.C. Real Estate Association. "I expect that, while the economy is going to be weaker in 2009, real-estate sales will be higher than 2008. While we've seen prices decline, the rate of decline has been slowing. If that trend continues, home prices should firm up over the next couple of months." Muir said the oversupply of available homes is pushing prices downward, but that could redress in the spring, paving the way for higher home prices.
The disturbing thing is that real estate’s is the biggest thing most people buy. Consumers need and merit professional guidance.
Are these so called 'experts' providing that? Or is it nothing but a shylock's mea non-culpa?
Hear no evil, see no evil, speak no evil.
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