Wednesday, 9 January 2013

What direction are home prices headed?

Garry Marr | Jan 8, 2013

"It has become the new mantra of real estate watchers — there’s no crash coming, just a soft landing and an ever-so-minor correction in prices.

David Madani, an economist at Capital Economics and a noted bear who has predicted home prices will decline as much as 25% on average in Canada, says the rhetoric from organized real estate is typical for any housing cycle.

“Look what happened in the United States, people started calling for a soft landing. It’s almost to be expected. It’s the narrative in the boom, bust housing cycle. You can look to other countries, too,” Mr. Madani said. “The industry insiders say ‘don’t worry.’ ”
He sees the dropoff in sales as a standoff between buyers and sellers, and the next phase will see prices cut if people want to move their homes.
It has come down to an argument over how much prices will pull back. Phil Soper, chief executive of LePage, added his voice to the debate Tuesday with a report from his company calling for a “brief, mild correction,” with prices actually rising 1% overall by the end of 2013."
Someone commented the following yesterday in a forum.  I agree strongly.
"It really irks me that Madani must be described as a noted bear. They should be consistent and state stuff like:
Tsur Sommervile, a noted bull…
Cameron Muir, a commentator with a vested interest in a bull market continuing…
Any Canadian bank CEO, who stands to lose his/her job if shareholders are wiped out due to RE bets…
Ugh, MSM sucks as usual even when they do approach the bear community for viewpoints"

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