“I don’t know exactly what will happen with interest rates but I am confident they won’t actually be going lower over the next decade to bail us out.”

Something we can probably all agree on.

“In April, 1989, the value of an average existing home in Toronto was $261,650. This was the peak of the 1980′s boom, with prices 267 per cent higher than at the beginning of decade. The bust that followed was nearly as dramatic: The trough didn’t come until August, 1993, when the average price sunk to $189,620. The average price didn’t top the 1980′s peak until January 2002.”

The numbers on Toronto remind me of where we are today in Saskatoon. It took them 13 years to get back to their peak levels and even then it was only triggered by the government lowering interest rates in 2001-2002. I don’t know exactly what will happen with interest rates but I am confident they won’t actually be going lower over the next decade to bail us out.

Market Cheers Over Ugly GDP Report
http://globaleconomicanalysis.blogspot.com/2009/10/market-cheers-over-ugly-gdp-report.html
“Today [yesterday] the market is cheering over what is actually an ugly report. A misguided Cash-for-Clunkers added a one-time contribution of 1.66 percentage points to GDP. Auto sales have since collapsed so all the program did is move some demand forward.”
“Government spending increased at 7.9 percent in the third quarter which is certainly nothing to cheer about. Personal income decreased $15.5 billion (0.5 percent), while real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent last quarter. Those are horrible numbers.” Nothing but smoke and mirrors.

Saskatchewan loses title as Canada’s murder capital.

U.S. out of recession, but Peter Schiff says “Not so fast people.”

Tick, tock. Tick, tock. Lake Placid deadline looms and I’m betting another extension is already in the works, and so what?

Let’s hope this isn’t just Mr. Carney jawboning. Like you say, Jason, the time to defuse this would have been some time ago, but it’s good he sees that picking up the pieces after the explosion is a far less preferable option. Extended amortizations nicely cover for the fact wages have been stagnant for some time, though.

Thanks for that link – Mark Carney is certainly coming into his own as of late. I think his comments are probably about 6 months too late, but there’s definitely more than a passing reference to regulating CHMC and revising amortization periods (so there’s hope yet). It left me with the distinct impression that some of these tools will be implemented sooner as opposed to later. I’d say more than a little unsettling, to be sure. In any event, I’d hazard that there’s a good chance we’ll see a seller’s market (albeit briefly) in the not-too-distant future…

Bank of Canada governor Mark Carney has repeated his concern that Canadians may be getting in over their heads in the purchase of homes, saying the government has ways of slowing the market.

It’s still not a bad time to sell.

Jason,

Echo boom will bail out housing: Harvard University’s Joint Center for Housing Studies

Lol. I won’t question Harvard’s ethics but check out the crew who funded this study.

Dana,

It’s a little unsettling, for sure. My mortgage contacts are telling me that buyers are going all in at today’s low rates. Without some decent income growth there will be some people having trouble meeting the payments at renewal.

Housing affordability eroding, study says

“The rebound in Canada’s housing market has been so sharp that affordability is eroding, a new study say(s). The Desjardins Affordability Index, reported quarterly by Desjardins Economic Studies, dipped below its historic average in the third quarter, meaning houses were less affordable to purchase, after a little more than a year in affordable territory.”

Here’s the link to the Desjardins Affordability Index PDF. Western markets covered appear limited to Calgary and Vancouver:

http://tinyurl.com/yfw68gm

This will have the exact opposite affect of what the government was trying to do with the stimulus. Just as it appears the Canadian economy will be in recovery, interest rates will shoot up and many of these people will not be able to afford their mortgage payments.

But then I’m no economist, maybe they know something I don’t….. but I doubt it.

So true. Wasn’t it one of you guys who said, “We’re living in oppositeville,” or something like that?

The only thing I might add is that while you see this bungling, most people do not. Average joe on the street is brainwashed and is of the opinion that the government is doing what they have to to fight the recession. Keep spreading the word.

I’m far more concerned about Vancouver, Toronto and places like that where prices have taken a serious jump again. Of course, those big markets count for so much of the total volume if they tank the media will host lots of talk about how bad the real estate market is.

Norm, I’m with you, but boy- what a time to be a recent buyer.

Oh well, can’t say a further downturn wasn’t at least partially expected and planned for. The current state of the market has left me feeling very grateful we factored in higher interest rates at the time of renewal, and very glad we bought well under what the lender said we could technically “afford”. I’m also very glad to have gotten such great information on this blog prior to our purchase… many thanks to all who contributed in the discussion.

I am not suggesting that everyone should sell. I have no intention of selling my home, and in fact, we are in the process of increasing our investment in our home. I feel fairly good about the long term potential for real estate in Saskatoon. Like some of the others that visit this blog, I wouldn’t be completely surprised if we see a continuation of the correction that began last summer but given that the weirdest of things have happened over the past year I’m open to the idea that that may not happen. Of course, I don’t know.

I simply meant to say, “Hey, things are looking pretty darned good right now if you’re a seller wanting to unload a property.” Demand is strong, but we’re also moving into our seasonal slow down period and the supply of homes, while still decreasing, is likely to grow in terms of “total months of inventory.” It’s a good time to be a seller, however, the market will eventually change. Considering that under the absolute best circumstances (economy aside – ridiculous interest rates and strong demand) prices have remained pretty much steady here through 2009, I think it’s unlikely that much could happen in the short term to create a better selling environment than we have right now.

That’s why I said, “If you want to sell your home, you should probably put that goal at the top of your priority list to complete before the end of 2009.”

I think even the most optimistic among us would be inclined to agree that the current momentum in the Canadian real estate market is unsustainable. Given the amount of “bubble talk” that we’re hearing, and the concern being expressed by banks I think it’s fair to say that we’ll see some real efforts to cool the housing market. Pay attention to the discussion in the weeks ahead and I’m willing to bet that if you’re listening closely you’ll hear lots that may cause you to feel, as I do, that this little boom is reaching it end. Does it mean a collapse for real estate prices across the country. Not necessarily, but it probably means a lot more questions about “values” and whether real estate is a wise investment at this time.

In a nutshell I see pretty good conditions for sellers right now, and some legitimate reasons to feel that the current momentum may be reaching the end of its run. “Personally,” if I’m wanting to sell my home, I’m going to get serious about getting it done while the market is still strong.