Blog by Evon Mayer

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Expert's Weigh in on the Market

Will the market continue to pause, improve or worse, lead to another big housing recession like the one in the early 1980s when properties and fortunes were lost?

“The 1980s were a completely different situation,” assures Muir. “Interest rates rose as high as 21.75 per cent and unemployment reached 12 per cent.”
Helmut Pastrick, Chief Economist at Central 1 Credit Union agrees that our underlying fundamentals are strong. “Our economy is robust and our employment rate is stable, and we expect continued growth in immigration.”

While no one is forecasting an extended downturn, we are seeing every major country revising their economic forecasts downward. “Overshadowing our growth is the slowdown in the US,” affirms Andrew Ramlo, an economist at the Urban Futures Institute. For this reason, Pastrick projects home prices will likely continue to soften for the rest of 2008 and through 2009 in most of the Lower Mainland.

“An important statistic will be the supply of homes for sale. When this number begins to shrink, the bottom is near.”

Muir adds that a supply adjustment is just what the market needs. “This means fewer listings coming on and remaining, a process that will play out and is now underway.”

The Multiple Listing Service® for both Fraser Valley and Greater Vancouver saw a decline in the number of active listings from July to August 2008 – for Fraser Valley, it was the first decline in eight months. Muir says once we see selection tighten and prices start to increase, the fence sitters will make the decision to buy a home. “Even with a few years of flat home prices, the market will come back.

“Real estate has consistently proven to be an appreciating investment in the long term and this will continue.”

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