Canada's Post Olympic 2010 Real Estate Collapse Projected?!

No sign of it yet in these parts. Real estate prices took a slight dip but it seems back to bubble-as-usual now.

Agreed - until the Olympics have come and gone we won't see any concrete evidence of anything.

At most, there may be some reginal bubbles to burst a bit.

For one, aint going to happen in Nova Scotia, or the region in general. And we've seen steady rises here.

When it happens, if it happens, the very last place you will hear about it until the damage is already done will be the CREA, etc. In their minds nothing ever goes down.

As far as the Lower Mainland is concerned however, we are now considered an urban resort area, with the accompanying prices that go along with it.

There may well not be a drop in Vancouver prices, at least in the near future. Investing in a home - think long term.

Is this guy for real, because if he is it's gonna be quite a shock for homeowners pretty much all across the country.

I would like to know where he gets his stats from because they seem to conflict a wee bit with the RE Assoc.

Introducing the Plunge-O-Meter

Brian Ripley's "Plunge-O-Meter" records Vancouver's price peak in April - for single family dwellings (SFDs) - at $818,403. It records the price three months later at $793,193, a decline of $25,210. For Mr. Ripley, CEO of the Vancouver real estate firm Oakes Ripley & Associates, this modest depreciation (3.1 per cent) marks the beginning of a long deleveraging process that could take Vancouver's SFD price back down to $503,141, the level it was at five short years ago.

http://www.theglobeandmail.com/news/opinions/introducing-the-plunge-o-me...

Here is one of his charts - scary indeed.

Real estate agents definitely won't like this guy.

http://www.chpc.biz/

The plungometer guy has a strange way of predicting--

First he does not consider the the rate times the loss to establish how far down the market will go. Instead he has a fixed arbitrary number that he says the market will hit and no evidence for it. Then he wraps the actual stats around that number. The result is a bizarre prediction that Toronto real estate will drop for only 7 months and reach his "target" amount while at this rate it would take Calgary some 164 months to get to its target date. We have never seen valleys stretch out like that in a market before. As well while different parts of the country may weaken more or less the length of time of the weakness (if it even applies to all cities) is mostly about the same. It would make more sense, if we are to try to predict the bottom which is a very difficult thing to do, to consider the velocity of the downward trend in each city and see where that takes us over a predicted common length of time. This would indicate that Toronto may be worse off given its faster downward velocity and the markets that have dipped only slightly won't go so far. It is bizarre to say that the Toronto market with a 35% downward velocity will hit bottom and presumably recover in 7 months while the Calgary market with a velocity of only negative 2.7% will keep going down for over a decade.

Given these observations I think the entire chart and the entire conclusion is unfounded (bordering on wing-nuttery).

Bottom line is there is the current dip in the markets that you can see and that should concern people but this guy has no handle on trends with his made-up so-called market support dates. His conclusions are all based on an idea that the entire market entered a bubble at the same time in 2005 and is going to return to that same place even though it would take some places over a decade to do so.

Interesting to note the division is clear: the new HST jurisdictions Ontario and BC are doing worse than the other provinces. I could conclude that in fact the rush to beat the HST created a mini bubble this Spring and the correction we are now seeing may or may not last that long.

I personally believe that due to the failure for wages to increase in tandem with housing prices that there is a bubble- however, the bottom of it is not uniform back to a fixed date and is less predictable than this site makes out (of course the owner of the site is trying to sell a $5 tool and that seems to be what this is really about).

Bottom line is we really don't know where this is going, there has been a recent drop and this chart offers nothing valuable as a predictor although it is an interesting place to see what has already happened.

Interest rates will increase in the fall and with another recession looming in US you can expect Canada's economy to have a great deal of difficulity as economy is hand in hand.  Foreclosures will increase and will  bring down the price of a real estate and unemployment will continue to rise as economy is stagnate in BC.  Real hard times ahead I am sorry to say.

Prices in Toronto and Vancouver are scary high. Eventually they need to come down, I hope we don't get a us housing crisis styled problems right after the recession.