Time to bail out of the housing market?

April 17, 2010

 Garth Turner, author for The Greater Fool Blog commented on his blog “List this” dated April 15, 2010:

“In a single month almost 100,000 families decided it was high time to bail out of their houses, flooding the market across Canada with a sea of new listings”.”There’s now every reason to believe listings will continue to climb in all markets. As I have explained previously, people list when markets fall and sit on properties while they rise. They consistently sell into cascading markets, allowing supply to overwhelm demand, resulting in falling prices. And this is where we are finally headed. Pretty much on schedule”.

“The big question cannot be answered yet, however: Will this be a quick 15% or 20% market correction over 12 or 18 months? Or are Canadians starting into a Yankee-style slow real estate grind which can churn lower for the next five years”.

For long term real estate investors, they could have already sold their investment properties by now and stay on the sideline for the right time to get back in. A correction in the housing market can be expected. But, whether the price decline becomes a multi-year down cycle is hard to say at this time.

The rise in Canadian home prices as pointed in my blog “Making Sense Of Canadian Real Estate Prices” may be tied to the global supply of money.

Read the full article here.

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