Last Summer we wrote a post pondering if the housing bubble was finally beginning to unwind and indicators were pointing towards it, but we had this to say: no one knows for sure. Anyone who claims to know is probably either a fool or trying to sell you something (a guy named Garth, perhaps?). This post is a follow up update to that original post.
The basic takeaway: we still don’t know. Prices have been adjusting downwards in multiple markets, but things are still very overpriced. So our advice is to be very very cautious.
As a recent post over at Better Dwelling has noted: Canadian prices are down significantly in Toronto since April 2017 (and Canada-wide since Toronto is such a large economic force), but up in some much smaller markets. The number of sales are also down significantly. These are market conditions that COULD be pointing to the end, but a reversal is, as always, still quite possible.
If you’re a buyer looking to buy the dip, we would strongly caution against it as it’s a situation where you are trying to “catch a falling knife”. Our recommendation would be to buy a house (when you need one) once the market has deeply corrected and once exuberance has been firmly replaced by fear.