Alberta is in a bit of a spot right now. Oil prices are down, there’s been a draught, forrest fires…overall, It hasn’t been a good year.
On the national scale, the Feds once again cut interest rates, but I doubt it will do much (when you’re this close to zero, it doesn’t have much impact).
I think we’re getting close to the edge.
In talking to my realtor, listings are up, but not much is selling. It’s the ultimate game of chicken if you’re a seller, are you going to drop your price, or hope there’s one more sucker out there who’ll get stuck without a chair when the music stops?
Personally, I think prices are going to start dropping soon. Yes, I’ve been saying that for years, but I think the math says these prices are ridiculous. Only the low cost of borrowing has kept them up this long, and they can’t go much lower. People are starting to get nervous. Jobs and money are getting more scarce with the oil issues, people are overextended, lending is tight…but seller’s still want their money.
Somebody is going to have to blink soon.
When the market was rising, everything fed the market. The lending rate went down, making it “more affordable” (but in reality driving prices up), jobs were abundant, pay was high, lending criteria was loose.
In the next few years, I expect everything is going to feed the crash, lending is tight (and bound to get tighter as foreclosures increase), jobs are scarce, pay is decreasing.
People always think markets go up, up, up…I think reality is about to throw some cold water on people.
Those who blink first, will suffer the least, as eventually the market momentum will turn into an avalanche. Prices are going to come down. There are few buyers, and lending is tough.
There is nothing on the horizon that looks like it can change this. Oil isn’t going up soon, lending isn’t getting easier.
Lesson: If you’re currently trying to sell, I get out now, the “losses” are only going to get worse.
P.S. If you’re an investor hoping to cash in, it may be tough unless you have cash. I expect banks to pull in loans and reject funding as the crash escalates.