According to latest figures from the Canadian Real Estate Association, house prices across Canada have dropped 11 per cent since the peak in May of $316,896, down to $280,880 in November, The drop is weighed more heavily in markets that experienced drastic upswings in property values.
Benjamin Tal, a CIBC World Markets economist said that "it was back to reality in 2008", referring to the unrealistic increases in prices in certain real estate markets over the last few years. If housing prices climb too quickly, they are more than likely to take a tumble at a point where the market can't sustain such an increase.
Tal continues to explain how we have moved from a seller's market to a buyer's market "in a matter of months." Tal points to recessionary conditions and low consumer confidence as the cause for the transition.
With consumer confidence at 25-year lows and the economy in recession, potential home buyers are staying on the sidelines until prospects brighten. Banks are also more reluctant to lend money to finance home purchases in markets where prices have been falling. Tal expects the conditions to continue to soften, but "it's not going to be a freefall."
Scotiabank economist Adrienne Warren said she also expects the housing market in Canada to soften next year. Warren said she doesn't anticipate another boom once the market recovers, which she predicts will be in the last half of 2009.
A recent report agrees with Warren and suggests that housing markets should recover as stability returns to the financial sector. If consumer confidence is restored and overall economic activity picks up, so should the housing market and a bounce-back could occur "as early as spring", the report said.
Buyers should take a long look at this current situation and ask yourself if you want to get in on some of the best deals you have ever seen and will ever see! With mortgage rates being as low as they are and housing prices at a 25 year low, now is the time to take advantage of this current economic climate.
When you are given lemons, make lemonade....or in this case, a sound financial investment.
For more information on Burlington or Oakville homes, selling or buying real estate, current market trends, or mortgage and interest rate information, please visit me again on my website www.seansells.ca or call me at 905-220-9198 and I'd be glad to answer any questions to accommodate all of your real estate needs.
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