Quote:
Originally Posted by Red
What if you bought in 2002 for 240K and were just laid off. And there is a job for you back home, sask or ont?
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Exactly.
There is very little holding back most home owners from selling at the much lower price other than the preception that they are losing money they never actually had.
Unlike the thousands (which are a large absolute number but small compared to the number of total home owners) who are already upside down on their mortgages and are essentially trapped in their homes until they can build equity faster than they are losing it (which would be impossible for any young middle class person).
Remember, the largest generation in Canada is set to retire over the next few years. I read a survey that 29% percent own at least 2 homes in Canada. 70%(numbers vary) of them are planning on using home equity as their number one source of retirement income (and therefore need to sell their home at some point within 0-20 years).
Also, remember that most speculators (and many many average people had become 'speculators' - though considered themselves 'experts' lol) bought second+ homes where the costs are not covered by the rents/income. When these units start to hemmorage cash for the investors it does not take much to create a scenario where they are better off selling the property for a $40,000 loss (for example) than it is to keep that property through this downturn and to a point where it may pay for itself with positive cashflow (which could be a decade or more). Add in a scenario where they need to re-finance in a couple years at 18% interest (like Russia, Iceland and soon England are all facing) and selling at a loss sooner rather than later looks even more appealing.
As for oilsands, they may never be completely developed. If they get delayed for 10 years alternatives that do not destory the earth will likely have been found and most any first world nation will block imports of such dirty oil. I suppose if it does not invoke an outright embargo from first world nations Canada/Alberta may be able to open a secondary market to India or something? Hardly something that will drive home prices IMO.
Claeren.