Housing

According to the Case-Shiller 10-City index Canadian house prices only appreciated by 84% between 1990 and 2006 compared to 181% in the U.S.. However, as U.S. prices plunged by almost 33% between the peak in April 2006 and the trough in May 2009, the chart below shows that Canadian home prices continued to rise, driven by very low interest rates and relatively benign unemployment. By July 2012, they had reached similar heights as U.S. prices before their decline and fall. I believe that house prices and consumer debt levels are overextended in Canada and that a "Minsky-moment" may be developing in Canadian credit markets. [Let me explain why I have come to that conclusion.] Words: 1892

The real estate market had started to stabilize on signs that foreclosure inventory was decreasing but a rise in foreclosure starts suggests that a tidal wave of foreclosures is building, especially in states with a judicial foreclosure process.

Canada's housing prices continue to escalate [there has been no housing collapse as there has been in the U.S., Spain, U.K., Australia and elsewhere over the past 4-6 years] but concern is rising as to whether they are now, finally, 'in a bubble' and about to correct either modestly or severely. This article discusses what would cause a change in direction in Canadian housing prices. Words: 500

"Ben Bernanke is trying like mad to stimulate credit and lending but to no avail. It's an uphill battle because of demographics, student debt, and lack of jobs. [Frankly however, given such an environment,] prospects for family formation are fundamentally very weak and overall economic fundamentals are very weak as well" [and that certainly does not bode well for housing coming back anytime soon. Let me explain.] >Michael "Mish" Shedlock< (http://globaleconomicanalysis.blogspot.com)Words: 650

We are currently seeing bullish indicators regarding housing demand coupled with bearish indicators regarding housing prices. Let's take a look at the past relationship between house demand and house prices and see what it suggests for the future in real estate prices. Words: 450

Given the global economic backdrop, and in particular the sharp correction in energy prices to which Canada is highly exposed, the risks of a Canadian housing correction are rising. Home prices, which corrected about 10% during the recession, have surged again, making household balance sheets look increasingly fragile. Economists are becoming concerned. [Should Canadians be worried too? Let's review the situation.] Words: 280

Auto sales, consumer confidence, manufacturing, retail sales, exports - you name it - over the last six months, nearly every facet of the U.S. economy has shown improvement and the real estate market is no exception. [Here are 11 irrefutable signs that such is the case.] Words: 800

If you have been on the fence trying to decide if you should rent or buy, the market may be in your favor. According to Trulia's Winter 2012 Rent vs. Buy Index it is now cheaper to buy a home rather than rent in 98 of the 100 largest U.S. metropolitan areas. How can that be? Take a look!

Canadians are becoming increasingly vulnerable to a housing correction, exposing them to a perfect storm of high debt and falling assets, the Bank of Canada warns...suggesting that many Canadians have constructed their finances on a house of cards, with ever rising home values the key and vulnerable support. [Sound familiar?] Words: 770

The ownership premium in Canada's largest cities is unprecedented, dangerous to new buyers, and unlikely to persist - and if analogies to the U.S. situation at its peak back in 2005 are at all valid, this is bad news. [Let me explain.] Words: 430