Quote:
Originally Posted by WCan_Kid
I totally agree with you, but isn't this just basically like asking for a do-over on the last 25-30 years of economic experimentation?
I keep struggling with the desire to see a correction and feeling some sympathy for people who ended up buying during this time period at the inflated prices that easy credit led to. Sure, there are some that used it as an opportunity to go bigger than they should have, but the whole market was affected so even if someone tried to stay within their means they paid more than they should have.
As I see it, this whole credit/financing mess has been slowly building for decades and now we want to try to correct it almost overnight. So much of the "wealth" that allows people to spend so much at the mall is directly tied to those easy financing terms and low interest rates, when was the last time you had someone talk about their new car in terms of $x total vs $y/month and how much of that is related to artificial equity in their homes. A forced correction in the housing market has to have an impact on all aspects of our economy due to the type of world we've created, doesn't it?
I'm a pretty simple dude, though, so I'm likely missing something.
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The correction your expecting won't be as big as your think. Housing prices in a growing city are expected to rise about 5%+ per year. This is considered sustainable growth. Unless the bottom drops out on the oil industry and people flee the city en masse, don't expect their to be a huge surplus of desirable housing in good areas in Calgary.
As it stands housing prices are falling gradually and have more or less remained level since the boom a few years ago.
Obviously noone has a crystal ball, but here's what I expect over the next 2-3 years:
10% drop in desirable areas, followed by a gradual creep up.
20% drop in less desirable areas (these are already down from the peak), followed by stabalization.
You won't see the 80s style 50%+ drops.