Thursday, December 3, 2009

Up, Up and Away!!!!

Did you hear? Real estate is set going to launch into the stratosphere.

Tis true, the real estate industry said so.

RE/Max advises that the housing market recovery will accelerate in 2010 and that sales in Vancouver will increase by 45%!

Meanwhile Pascal Gauthier, economist at TD Economics, tells us that home prices will rise another 10% in 2010.

It's this type of news that will have the real estate cabel in overdrive in the next few months cranking out the 'buy now or be left behind forever' propaganda.

Curiously you don't seem many references to a prescient little excerpt from Mr. Gauthier's TD Report.

"Mostly what seems to be stimulating sales is the attractive financing rates and it's really helping the low to medium end," says Mr. Gauthier. "If you are entering this environment and you are already overstretched and later down the road you're facing the interest rate reset … households and lenders should both be doing very hard math here to look at how much they should be taking on."

Indeed they should. But you won't be seeing comments like that from RE/Max anytime soon.

The lesson of the US experience, where the woes associated with interest rate resets have all too clearly played out, are drowned out by the chorus of real estate glee.

The powderkeg continues to build.


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