In October of 2013 I did the unthinkable. I came out and stated that the US real estate market was topping out its “Dead Cat Bounce” leg and that the subsequent decline in real estate prices will make 2006-2010 decline look timid by comparison. You can see the full report here Real Estate Collapse 2.0 Why, How & When as my opinion hasn’t changed. And while we haven’t seen substantial declines just YET, the market is rolling over as we speak. That is to say, the worst is yet to come.
And if you thought California real estate was expensive, just take a look north of the border. The situation in Canada is equivalent to the hottest markets in the US, with one primary difference. Canadian real estate was a late bloomer and their speculative cycle didn’t really get going until after 2002. Since their real estate cycle was about 8-10 years behind, they were not impacted by the real estate collapse in the US. Further, when the next round of financing (by the FED) showed up in 2008, Canadian Real Estate simply continued to accelerate as if nothing has happened.
Basically, Canadian real estate is where the US real estate was 9 years ago. The cycles confirm that as well. When this particular liquidity party ends (happening now) and the stock market shifts into the bear market, I would fully expect Canadian real estate to collapse. It is never different. Our friends at DoctorHousingBubble.com have a wonderful piece on Canadian real estate I encourage you to check it out. The Canadian housing bubble makes California real estate look sensible: Crash in energy prices will put pressure on home values up north as Canadians go into maximum leverage.
Plus, Garth Turner’s Blog “Greater Fool” is a great place to follow
