Prices haven’t fallen nationwide yet, but they’ve flattened out. The median sale price for a house in July was up just 0.9 percent from a year ago. Now that the market has started to fall, homeowners and agents want to know: How far and how hard?



A lot of money is riding on the answer. In Canada things are in a holding pattern, most people I have talked to are waiting to see what develops in the US. Our economy is tied to the US and usually reflects their ups and downs.

Consumer confidence according to CREA is trending downward. Sentiment about making major purchases rose in Ontario, but remains below where it stood one year ago. The decline in sentiment about making major purchases likely reflects rising home prices and seven increases in the trend setting Bank rate since September 2005. Sentiment about making big-ticket purchases in Quebec continued to trend lower, and at a steeper rate than in any other region.

According to CREA the Actual (unadjusted) sales activity declined by 3.7 per cent in July compared to the same month in 2005. Take a drive around Barrie, Ontario and it doesn’t take long to realize that there are a lot more for sale signs out there than there used to be. Everyone is aware that the US housing market is in decline and if the “bubble bursts" there, can we be far behind?

The hot market in the Canadian west also raises some flags according to Craig Alexander, deputy chief economist of TD Economics, who co-authored the report with fellow economist Steve Chan, which included the statement, “The recent dramatic price gains in Calgary and Vancouver are unsustainable over the long-term."

There is a site in the US that has started a “bubble map" (realestatecafe.com), originating in Boston area, but now covering the country, indicating locations where properties are selling below their appraisal price. Some listings are significantly below their appraisal price and may be a good indicator of what is happening in the real estate market.

No one can accurately predict where the real estate market is headed. Some degree of accuracy can be attained by comparing statistics and trends to previous markets, if you have all the data at your disposal. Unfortunately, most articles and reports are issued by organizations which are promoting their own business plans, not a reliable source for someone who is planning on making their biggest investment of their life.

CAVEOT EMPTOR - BUYER BEWARE