Can you see the future? Yes we can.

However, Calgary, Edmonton, Vancouver/Victoria and Saskatchewan WAS PURELY SPECULATIVE as prices there will correct 40-55% down. What are the 100,000's of owners who's mortgages will by far surpass their homes value?

keep paying?
Bankruptcy?
A bail out?

Elsewhere such as Toronto where little speculation occurred, prices are still down due to overbuilding, the recession and now its Mayor's municipal land transfer tax...


Calgary prices have fallen from $420K (March 08) to $388 K (oct 08) and targeting towards 260K (oct 09)

$32,000 saving in 7 months or $160k saving in 18 months is not that bad.

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How low could they go? If Canadian prices follow U.S. trends, certain cities will experience a major slide in house prices


http://network.nationalpost.com/np/blogs/fpmagazinedaily/archive/2008/12/15/how-low-could-they-go-if-canadian-prices-follow-u-s-trends-certain-cities-will-experience-a-major-slide-in-house-prices.aspx


Some experts are predicting a U.S. style housing crash here in Canada, saying that we're only a year or so behind them. So what would that mean for us?


We decided to take a look at how much the average U.S. housing prices rose in the last ten years, and discovered that prices in October 2008 were 54% higher than in October 1998.

Since U.S. prices peaked in April 2007 and Canadian prices peaked roughly a year later, we’ve calculated what a 10-year, 54% increase would add up to here — 18 months past our peak.

That would mean that most Canadian cities are headed for a fall in housing prices, especially those out west. The full statistics on average house prices are below:


U.S. Housing Prices

Start date (Oct. 1998): US$184,300
Peak (April 2007): US$322,100
Current (Oct. 2008): US$283,400

Vancouver

Start date: (Oct. 1999): $283,957
Peak (May 2008): $624,639
Current (Oct. 2008): $556,682
Predicted (Oct. 2009): $436,726

Edmonton

Start date (Oct. 1999): $120,027
Peak (March 2008): $343,760
Current (Oct. 2008): $317,744
Predicted (Oct. 2009): $184,602

Calgary

Start date (Oct. 1999): $169,068
Peak (March 2008): $419,396
Current (Oct. 2008): $388,565
Predicted (Oct. 2009): $260,027


Toronto

Start date (Oct. 1999): $230,864
Peak (April 2008): $398,687
Current (Oct. 2008): $353,018
Predicted (Oct. 2009): $355,069

Ottawa

Start date (Oct. 1999): $145,121
Peak (June 2008): $298,336
Current (Oct. 2008): $280,870
Predicted (Oct. 2009): $223,196

Quote:

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Originally posted by Krazzyfour

Foreclosed Homes Sell At Steep Discounts

A three bedroom, three bath in Menifee, again one of the those far out but still nice Los Angeles suburbs, went for $130,000, twice the starting bid of $58,000 but about one third of the previous value of $431,000.

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I dont understand, how come Toronto prices will go up by few grand, when prices will go down in all other area in Oct 2009 ??

Whats the reason for this slight appreciation in Toronto ?

Check this article by a Chicago Business School professor,

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Current Housing Prices Not Near Bottom Yet

Housing prices have a long way to drop before this current pricing cycle bottoms out,” said Erik Hurst, V. Duane Rath Professor of Economics and Neubauer Family Faculty Fellow. But the housing market constriction won’t be tight enough to put the country into another Great Depression, Hurst said in a speech to the second annual Real Estate Conference, sponsored by the Real Estate Alumni Group November 11 at Gleacher Center.

From 2000 to 2005, the share of Gross Domestic Product attributed to residential construction increased to 5.5 percent from 4.5 percent, Hurst said. “Part of the reason the economy has slowed down starting in 2006-2007 is because we stopped building houses.” But that was part of a natural cycle and “nothing you or I should worry about” or create policy over, he said.

Hurst used statistics and graphs to show the cyclical nature of housing prices. “Big booms are followed by big busts. Small booms are followed by small busts,” Hurst said. The reason for this, Hurst showed, is that housing supply adjusts to pin down housing prices at some sort of equilibrium level.

He also examined 44 metropolitan areas where housing prices had appreciated at least 15 percent over a three-year period between 1980 and 2000. Average price increase during boom periods amounted to roughly 55 percent, Hurst said. “Every one of those 44 metropolitan areas had a substantial housing price bust,” Hurst said. “The average size of that bust was 33 percent.”

Busts lasted an average of seven years. “About 40 percent of the housing price decline occurred in the first two years” of the bust, he said.

This leads Hurst to believe that U.S. Treasury Secretary Henry Paulson and others are incorrect to speculate that the current decline in housing prices is nearing bottom. “Not even close,” Hurst said.

From 1997 to 2006, property prices in the United States rose between 45 percent and 50 percent, he said. Using past data as a model, over the next five to seven years, housing prices will fall by roughly 30 percent on average, Hurst said.

So far, prices have fallen a little less than 10 percent. “That means, roughly, we have another 20 percent housing price decline in the U.S., based on these historical cycles, in the next five years or so,” he said.

Banks take part of the blame for the current credit crisis in that they failed to price housing loans correctly, Hurst said. He proffered two potential reasons for banks’ errors: lack of regulation that promoted transparency and lack of data on default rates early on, because they were lending to people they had never lent to before.

Hurst outlined a few reasons he is confident the recession will not be as bad as some have projected: much of the uncertainty that is putting the brakes on consumer spending has already has come to the forefront; policy makers have grown in knowledge about managing economic shocks; and bankers now have the data to figure out where they went wrong.

Second-year student Artis Shepherd said he found Hurst’s optimism refreshing. “His forecasts are based on logic and based on a rational projection of where we are today,” Shepherd said. “I think they’re very well placed. Time will tell whether or not they’re accurate.”
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Wait for it, guys!!! Prices are going to DRROOPP!!!



http://www.chicagogsb.edu/news/2008-11-11_hurst-realestate.aspx

http://www.greaterfool.ca/

Here’s a rapidly depreciating house, in Toronto’s Beaches (sic neighbourhood:

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=7750523

PropertyID=7750523

Nov 15: $399,000
Dec 21: $359,000
Dec 22: $329,000

$70,000 in 37 days. Sounds like it could use a X5 parked in the driveway.


Governments/businesses/experts hate deflation because it rewards the savers and punishes those with debts. And there are so many debtors to suffer, because for generations they have been promoting one behavior: spend, spend, borrow and spend. Deflation shoves their faces in reality like you’d do to a dog with its “accidents”. Everything they’ve built up starts unraveling.

It’s the failure of Keynesian economics. Consumption-driven, inflationist policies with absolutely no focus on or reward for saving will ultimately end in disaster. But govt. is trying to kill deflation by pumping billion of $ and lowest interest rate on savings.


Very soon.. you may buy home in CASH price 150k and mortgage price 300K.

Hi Rahul,

How do you get to see the prior listing rates? When I search MLS, I can't see them or the age of the properties.

Rgds,

New

america announced 13.5% DROP in home prices compared to Nov.2007 ... the biggest year-to-year drop in DECADES ....
get your cash ready ...
it is almost time to buy ... not yet, but almost ..

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happily holi day!

http://greaterfool-ca.sitepreview.ca/

This means there’s more anguish to come. A lot more. The price decline in Canadian real estate in 2009 will at least match that of 2008, and sales volumes will continue to erode.

And while we’re in the crazy prediction business:

* The biggest house price drops will be in early summer. This will happen after tens of thousands of wanna-be sellers dump their houses on the market in late February and March, hoping to catch the Spring market. But, there won’t be one. When that sinks in, prices will crumble.

* A disturbing number of retail outlets will be closing in January. One of them (I’ll wager) was the ladies apparel store I bought Dorothy’s present in on Tuesday. After I wandered in a clerk told me the item in my hand was 50% off. “Actually,” she said, “everything in the store is 50% off the sale price marked on the tags.” So I bought three pairs of pants, four sweaters and three blouses. Next month, there will be a jarring red Available sign in the window.

* Most at risk are the Big Box operations. Linens ’n Things is already embroidery-side-up and you can certainly expect others in the home decor, furnishings and electronics sectors to follow.

* More than a few of the 60 car assembly plants across North American now closed will not be reopening. The auto bailout package will not work. None of the Big Three will be ‘viably restructured’ by the end of March, as they were asked. But then, who really expected that to happen?

* The biggest first story of 2009 will be unemployment, since so many job losses announced in the final months of 2008 will start to materialize. The biggest second story will be the impact of the financial crisis on government. In the US almost a third of all states have already started to cut back on social welfare payments – a hurtful thing punishing the poorest citizens after some of the wealthiest were bailed out. In Canada, the federal government will run a deficit of at least $20 billion, which could actually hit $30 billion the following year.

* Interest rates will remain at the lowest level in half a century all year. But it won’t help much.

* The media will be shocked to hear of negative equity and mortgage defaults in Canada. The potential exists for Canada to develop its own version of Stockton, California, the Ground Zero of foreclosures. One good candidate is Milton, Ontario.

* The new year will finish off the condo business for a long time, maybe a decade. A massive oversupply of new units will meet a crash in demand. Several landmark projects will never make it above the parking garage level, and tens of thousands of units that speculators never figured on carrying will hit the rental market, tipping the scales massively in favour of tenants.

* Stock markets will be choppy, volatile, dangerous and unpredictable, save for the underpinnings of a massive recovery rally. They will be in place by year’s end.

* Oil will be a major story, depending on how much below $30 it might touch. The Alberta Moment has passed, cowboys.

* It will be an important year to talk with your spouse about what’s really important; to be realistic and flexible; to work as hard as possible at taking back some control over your life; and to develop a sense of humour.

After all, whatever we have lost or are about to lose, the most precious and irreplaceable commodity is time.
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How do our experts see housing price in 2009/2010?