Will the current housing slump lead to a prolong housing correction in Canada? The chances for a real estate downturn is very high. The reason for a housing slump is summarized in “Canadian housing is overvalued”.
A survey conducted this fall by Mustel Research Group on behalf of the REW.ca, a Vancouver-based real estate search site has found 58 per cent of Metro Vancouver residents believe this is not a good time to sell a home.
The survey’s main findings are:
Confidence in the market has dropped because of a belief prices are on their way down Home sales were slowing and there were too many properties for sale The largest deterrent for buying; high prices coupled with a fear of home values dropping after purchase
The main reason people stay in the country’s most expensive housing market is because of family, and not the much-touted livability, scenery and climate as reasons for living here.
Transactions are slowing. It’s a waiting game. A good graphic illustration on the current real estate supply and demand by “Housing Analysis” can be viewed here.
What’s really happening is a stand off between buyers and sellers:
“The gap has widen between what buyers are willing to buy and what sellers would like to sell.”
People are not buying now. Many home buyers would like to buy, but they can’t afford to buy because home prices are still too high!
Most sellers see price corrections happening, and have the point of view “they don’t have to sell their homes right now”. They think they’ll wait it out.