Home Prices Headed Down Further?
Rosey has a post giving good reasons to expect the housing market to decline further.
I also saw in my reading somewhere today that there are 2 shadow inventory properties for every one on the market, so that is simply a lot of pressure for downward prices. Some people will want to just move on and they will simply sell for what they can.
I still think that in some places housing prices are now reasonable. Bottoms are known in hindsight and buying at the bottom isn't the most important thing compared to buying at a reasonable price. Sure, it would be nice to buy in a bottom, but that just isn't something you can know in advance. But, there is also no rush if you think housing is at a good price. Chances are it will remain at a good price for a couple years.
Amazingly, there has been no bubble bursting so far in Vancouver. I always have said that I did not think you could predict Vancouver's market because of the Olympics. People remember what happened to the housing market with Expo and I think people have been hanging on to their properties in the hopes of cashing in on a wave of sales from the Olympics. And it appears there was some excuberant buying this spring, with people actually over bidding the listing prices on some homes and home prices increased this year. There were down a bit last year so overall they are fairly flat over the past couple years.
I have a friend that sold this spring and she is jumping to get back into the market. Nothing will pursuade her that it would be better to wait a few years and she is convinced that moving out of the market means you'd never be able to afford to get back in, which is certainly true if you'd sold about 5 years ago.
You can see from this graph that the bubble looked to be bursting, and then reversed and prices are actually up about 5% in the last 2-3 years.