Real Estate Editorial

I was watching the news the other day and saw the craziness surrounding the stock market, I don’t follow the market that close but when the TSX (Toronto Stock Exchange) has its largest drop in 6 years you perk up and take notice.

I recently posted a video, showing the crazy housing boom in Canada called
Canadian Real Estate Boom Will it End! and it got me thinking about the state of real estate here in Canada and to be honest how the markets are doing in the United States.

To sum it up briefly, in Canada we are experiencing some great economic booms and our real estate market is still going strong. In the USA, they are struggling with their economy and their real estate market has been in a downturn recently.

I found a good post on Dr. Housing Bubble called Lessons From the Great Depression: A Letter from a former Banking President Discussing the Bubble. that gives some great information about how history repeats itself and how the USA might be heading towards a depression.

I’m not going to rehash this article but it is important to know that here in Canada the bubble we are experiencing will at some point crash. In my opinion our country cannot realistically sustain a real estate market that continues to climb at an above average rate. We are already seeing evidence of this now, with low mortgage rates that are struggling to stay that low and mortgage amortization periods that have increased from 25 yrs to 40 yrs.

It seems to me that the banks and mortgage lenders are doing everything they can to keep this real estate market from crashing. It is going to be interesting to see what happens in the next 5 years. God forbid if the Oil and Gas industry here in Alberta suffers a major setback. I can’t even imagine what that will do to this province and country.

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