With Canada being a great follow-up country, they have learned to depict what America has done wrong in regards to its housing market, and completely revise their own housing circumstance to avoid those mistakes. It is widely apparent in places like Vancouver, where prices have gone quite high, and yet is has not gone into bubble territory, nor has it crashed. It is no secret that the U.S. had almost blindly created their marketing with hasty decisions and poor outcomes. According to The Urban land institute, Even in places like Vancouver property prices have still remained stable as opposed to the USA.
With banking regulations and lending standards to be proven much tighter, it has prevented prices from getting completely haywire like in America. However, economists like Robert Shiller and David Rosenberg are saying that the Canadian housing market is “the next bubble and it’s about to burst”. Basically saying Canadian’s on the track to becoming the next U.S. That, I don’t believe for one minute because Vancouver housing has sky rocketed in price —also considering that the U.S. is trying, however not truly succeeding yet, but still trying to better their economy especially with real estate pricing.
Even though Canada is definitely a better place for housing, take for example the west coast in areas like West Vancouver, North Vancouver, Vancouver East, Burnaby, Richmond, Coquitlam, and other areas like Surrey, it has its flaws in the system as well and still makes the U.S. a somewhat desirable place to live. According to the Conference Board in Canada, at this point in the housing-cycle, there is a large risk of Canadian housing prices are in need of some modest correction. However, they believe that with a continued population-growth, additional employment gains and a modest mortgage rate increasing will limit potential-price declines in 2014 and 2015. That might not be a bad thing, but surely can’t be a too good of one either. So far, there is another case for a more dramatic price optimization if higher-mortgage rates start crimping-affordability, the Conference Board had told reporters that even then it is still likely to be a soft rather than a hard landing. Even at the current low-rates, the typical homeowner will have paid-down $42,104 principal on a $100,000 in mortgage-debt, so it will still be affordable once it is renewed to a higher rate. This is especially the case for first time buyer who are getting into 1 – 2 bedroom Vancouver condos in downtown. Even so, with future progress these rates will only gain two percent by 2017-2018.
Although it is no secret there has been a massive decline in the housing market for the U.S. it is notable that researchers are predicting an average price gain of 4.2%. To test the higher mortgage rates, prices in cities continue to increase throughout the U.S. The Economists have compared house prices with rental cost of housing and with median household income. Over a period of time, house prices were at a faster rate than before. In June 2013, pricing was below fair value compared with rentals in all but two cities. Almost a year later, six cities are outside that boundary. In most popular areas like Denver and Los Angeles, houses are now overvalued by 16 percent.
In July of the same year, the cities wrote to the holders of 624 mortgages asking to purchase the debt at 80 percent of market value, threatening to have eminent domain invoked if they did not meet their needs. Thus far the plan is being pushed forward, which has many mortgage investors in a fit. Some fear that this plan will take a turn for the worst, however; claiming it will do just the opposite as that’s how this housing marketing has proven itself to be. With unmoved immediate progress, but studies and great potential for lower prices in the future, it is hard to decipher which is more likely to happen.
However, since the last decline in REO sales from 16,800 homes in 2012 to 7,900 homes in 2013 there was a contributed 24.6 percent increase in the average sales price. Lastly, out of each region averaging homebuilding around 2,025 there was around 14,800 homes permitted in total. By studies, single family construction activity averaged 59,200 homes during the fourth quarters from 2002 through 2005 and 41,350 homes permitted after the fourth quarters from 2006 through 2013. Obviously, something’s been done right between the western region in the states.
To furthermore explain, sales prices aren’t all that predictable right now and with both Canadian and American housing markets decreasing and increasing every couple years the answer is unclear to where the better housing market would be in the future. Currently, Canada is still keeping a tight and well profitable housing market, but shows signs of future decline; especially in Luxury market like this, while America shows potential. Eventually, the case will crack and finding a moderate housing market won’t be so hard, the key to everything is time and patience. And possibly a little research along the way.