What goes up must come down....short term???

You are smoking "crack" if you think the Canadian real estate market isn't due for a correction....how big? Who knows. Sure, the dynamics with the sub-prime mortgage situation and over borrowing might be more extreme in the U.S., but Canada has it's own ills that will cause this inevitable correction. Canadian Conservative M.P. Garth Turner says that Canada's upcoming bust in real estate is similar to that which is currently occurring in the U.S. due to the no money down/40 year mortgages. Perhaps we aren't as maxed out credit wise here in Canada, but whatever happens south of us generally effects us too. Bulls seem to always remind us that the lower mainland of British Columbia is unique and will not suffer the same fate as elsewhere on the globe, but I don't believe it for a second.

Another thing I read from posters on other sites is, "what has created the BC boom?" Some say that it is due to immigration, others say its the bullish economy, others say a great deal of it is due to offshore investing post Olympic hype....it makes sense that as all these factors have probably contributed to the 5 year run upwards in property values. However, I believe that once the real estate upswing in the lower mainland really began its drive northward that much of the run-up was due to pure hype and house flipping. I know many folk in the Surrey, Langley area that have enjoyed the recent gravy train by doing just that....house flipping.

I'm not an economist, but what I've learned is that the same hype that creates a frenzy of buying and ridiculous price run-ups can easily be converted to the words "we've peaked" sending the prices in the opposite direction...Down. In this sense, real estate price trends are very similar to the economy in general, once the word "recession" is actually uttered by financial analysts in the media people take notice and protect their hard earned money other ways.

If someone who is a current investor with a lot at stake or simply a home buyer who has just gotten into the market at current prices tells me that the market will just keep rising, I tune out and think bullshit! Of course they'll say that, they have a vested interest. On the flip side, there are those like me that are currently not property owners and want in and we'll root for the market to correct waiting for the first sign ready to tell all "I told you so!"

History in lower mainland real estate according to the following graph found at bcrealtor.com shows that although there have been previous rises and drops in the past, the over all trend is upwards long term for BC investors. That is good news for all!
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So once we know the market has reached its peak and prices for homes begin to fall, the new question to ponder is when have real estate values hit their bottom? That is what guys like me will be waiting for so we can buy our first home....affordably :-)