The Canadian Press: Home-market 'correction is in full swing'

[21pro]

The Canadian and particularly GTA and Western Canada Home-market 'correction is in full swing': all 3 of construction, sales, prices down

http://ca.finance.yahoo.com/persona...swing-construction-sales-prices-down-20090209

It seems that sellers aren't very willing to come to terms with reality that their houses aren't worth as much as they were 3 years ago or 6 months ago for that matter. Which leads to lengthy listing times- or dramatically reduced closing prices to listing prices...

Makes sense... looking at a few of my neighbours houses: 1 was listed on the market for 9 months and they didn't sell and pulled from the market even though I know they need to sell. Another is under a current 'power of sale' and yet another sold in November for $93k under asking price!

 

[Master Muse]

Housing bubble

I live in the heart of the housing bubble - L.A. What's happened and happening here is a severe, continuing roll-back in pricing from the 2007 peak. The adjustments are often $1million or more off the list price and, as the prior poster noted, longer days on the market.

Where does it all go? Actually, nobody knows where or when. My view is that since the previous prices were based on false income information on credit applications requiring no down and little correlation of income to price, we're moving to the standard of price = affordability = 20% down and price = 3 X gross income or a bit more.

On that basis, the median income in California - statewide - is +/- $60,000. Thus, the median home price should be +/- $180,000 - $200,000 with $35,000to $40,000 down. Currently. the median is around $265,000 so we have another 30 to 40% to go.

The effect of the balance sheet deflation is restraint on spending since one is not as rich as one thought. Add to that a shutdown in new credit, a reduction in existing credit lines even for the best of customers and pressure on jobs/incoms, one sees no end in sight to the downward spiral.

Nothing is moving up except government borrowing which is monetized by the world's richer folks looking for the safest haven for their own national currency. The US government will exact its real interest charge by allowing the dollar to diminish in value thus making its debt obligation lower in real terms. But there's noplace else to go is there?

This scenario will play out around the world in varying degrees, causing a wide range of unrest and worse. Those who wanted the US to not be the world's policeman will get their wish but at a heavy cost to many.

When does it start to recover? When the US consumer starts to buy again.

When?

Good question. My guess? I have none but not this year or next.

Obama will be a one-term president and the democrats will be severely weakened in the 2010 elections in the Congress. Who will be the new president? No name now well-known. And it will be a "he". None of the old crowd in either party is trustworthy, much less believeable.

Where do you put you money? Darned if I know. A little here; a little there? If assets are sinking in value, why buy any? Or who knows which to buy? Government bonds? Maybe the safest long-term. It's the current bet of the rich who are willing to lose some but not all of their wealth. It's the premium the world pays for the fact that the U.S. runs the world, like it or not. Washington sneezes and everyone else catches cold.

 

[Rockslinger]

The "Big Guy" saw it coming in July 2008.
1) 180 f----g cranes lttering the Toronto skyline.
2) Couple paying $600,000 above asking for a house in the Beach.
3) Idiots lining up for 72 hours to buy overpriced condos.
4) Everybody at dinner parties talking about buying 2nd and 3rd houses for "investment" purposes.