“Banks are still lending but our economy is run by greater and greatest fools which are declining in number.”

In the USA, banks are still lending, they are just not doing the idiot zero-down loans of 2006. They are absolutely lending to people with good credit and having good down payment.

The problem is not the supply of credit that the idiots ( Obama throwing $ 1T for cleaning bank's s**t) in power keep saying it is. The problem is that DEMAND for credit is declining, because households are already overly indebted. Even with interest rates at all time lows, the principal still needs to be repaid, and sensible households are paying down debt, instead of incurring more debt. That is the essence of the current credit contraction.

You can shove a loan at 0% interest down my throat to my new car today, but I don’t need a new car. That is that attitude of more and more people right now.

Just because mortgages with low interest rates are available for people to commit financial suicide, doesn't mean people will continue to bid up the prices of a house. Many will take advantage of low rates to pay down debt principal. There continues to be an over-supply of over-priced houses, and that is why prices will fall over the next few years. This recession is simply going to speed up the process.

Home prices fall 2.4% in January: report
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Reuters
March 25, 2009

Canadian home prices fell 2.4 percent in January from a year earlier, reinforcing views that the property market was cooling, according to the a report issued on Wednesday.

The Teranet-National Bank National Composite House Price Index, which measures the rate of change of prices for single-family homes in six metropolitan areas, showed prices were down 5.5 percent nationally from the peak hit in August last year.

Home prices in Calgary suffered the biggest year-over-year drop, falling 8.2 percent in January from the same month a year earlier. That was followed by a 4.2-percent slide in Vancouver and a 2.4-percent fall in Toronto.

Meanwhile, home prices in Ottawa were up 2.1 percent, while they rose 1.2 percent in Halifax.

Montreal, showed a deceleration but maintained a 12-month price increase of 4.1 percent.

On a month to month basis, national house prices were off 1.6 percent in January, following a 1.4-percent slide in December.

Confidence in the housing market has eroded due to the global financial crisis and the economic downturn. Market watchers say current price declines are part of an ongoing correction since the market hit its peak in 2007.

Housing activity, including resales and groundbreakings, is generally seeing a period of softness in Canada, though there has not been the same plunge in the sector that has been seen in the United States.

Earlier this month, the Canadian Real Estate Association said the average home price fell 9.2 percent to $281,972 in February from $310,379 a year earlier.

Prices were lower in 14 of 25 major markets that the association measures, with the biggest drops in Vancouver, Calgary, and Windsor, Ontario.

Lenders seek Ottawa's aid as thousands risk losing their homes

http://www.globeinvestor.com/servlet/story/RTGAM.20090326.wmortgage0326/GIStory/

As many as 25,000 Canadian homeowners who consistently met their mortgage payments could lose their homes unless Ottawa or other financial players help supply capital to the struggling subprime lending market.


http://www.calgaryherald.com/Business/White+collar+workers+Calgary+ranks+unemployed/1433290/story.html

"Employment insurance won't even cover the mortgage," says Zarabi, a father of two who bumps into one of his former colleagues, 39-year-old Charlie Gu.

"Last year, when I was hired by my last employer, there was a bidding war for me," says the senior mechanical engineer who was laid off three weeks ago.

"The other day, I applied for another senior-level position, and was told that while normally they received on average 20 applications from qualified people, this time around they got 900."

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My take: These are hard times for everyone. But in last few yrs house increased in value, people enjoyed the good times and thought bad days will not come back as we are different. If 65% of North America's economy is based on consumer spending (fake economy), yet jobs among that group are being lost and the household balance sheet out of balance. The only difference is tons of people enjoyed the boom on credit that they can't afford to pay now. If EI is not enough to pay huge mortgage or the BMW payment then rainy saving kicks in. But mostly people never heard name "saving".

The best possible you can do for yourself or family is buy house at rock bottom price down the line with cash (or plan to finish mortgage in 5 yrs). That is best possible saving/deal you can do for life. This opportunity will be once in lifetime but its coming. If house (biggest debt) and other debt are paid then you will sleep like baby and more fun time with family.

Where are the real estate experts on this forum who were saying that "Canada is different" and "Canada does not have subprime like USA"?

Rahul has been screaming for last 12+ months about this and many on this forum mocked him?!!!?

Quote:

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Originally posted by rahul_singh23

As many as 25,000 Canadian homeowners who consistently met their mortgage payments could lose their homes unless Ottawa or other financial players help supply capital to the struggling subprime lending market.


http://www.calgaryherald.com/Business/White+collar+workers+Calgary+ranks+unemployed/1433290/story.html