Housing Bubble Update: Is it progressing?

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.

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