Joel Carcone

As I previously expressed some view on the housing bubble debate (the debate over if Vancouver’s red hot housing market is going to go into decline or will the demand for housing continue). I since met with David Baxter a futurist, demographer, and economist who’s job it is to answer this question. What I learned was that according to him we can all rest more assured that the Vancouver market is still a stable investment.

Although doing him no justice, in a nutshell David advocates that in order for a bubble to burst there needs to be a bubble present in the first place. He outright denies the presence of a bubble and has gone as far to model the previous 1981 housing correction aka “crash” and illustrates that we do not have any of the warning signs of a crash. The main reason for this is that David sites that there is no indications that interest rates are going to increase because there has not been the level of inflation to necessitate this change. His belief is that .5% per year would be a healthy increase that would be sustainable for both first time and frequent purchasers in the future.

His belief is that by all accounts that the Greater Vancouver area because of its economic growth will continue to steadily increase real estate prices. David’s attributes increased wages, a robust enonomy, and the all time record low in unemployment as the major sign of continued stabilization. When you ask him when the market will ‘stabilize’ he answers: “it did about half a year ago”.

Now in terms of the red hot market he clearly believes that things will slow down and that the rate of increase that we saw in the past will not continue. He indicates that it will take longer to sell a home (and make it more important to use a qualified realtor who will appropriately market the property to its full potential). I see this as a good thing.

I believe that there are many buyers or ‘potential buyers’ ready, willing, and able to invest money into housing and that in places like the North Shore there is no end in sight for a major decrease. Another reason for this is that there are many residents and immigrants that will be entering the ‘market’ in the years to come. Baxter estimates that 55% of renters are in a financial position to ‘purchase’ real estate. As such more activity will likely come as a result of more people fighting over the same amount of supply.

What economists recognize is that even among the scary talks of a market correction record numbers of people are making transactions. August which is traditionally the slow month that everyone is out of town set sales records. Many are simply recognizing that regardless of what intrest rates do or what happens to the market - real estate prices are only going to go one way - up! Buying real estate in desirable places such as Vancouver’s west coast and/or Vancouver’s North Shore will not get any cheaper.

At the end of the day he made me feel good about my own position as once again I am personally ‘in the market” for real estate. His future predictions make me feel good about all the clients that I have recently dealt with who have bought and sold real estate. My personal long held believe is that if you want a secure real estate investment that will make you money over the short or long haul then simply buy a piece of real estate that is in a good location. Location, Location, Location is the only thing that one should worry about when investing. Regardless of any market changes you will always have a profitable piece of real estate in a prime location. So feel free to call me: Joel Carcone at Re/Max Crest 604-961-5365 and I will personally assist you in marketing your preexisting home or condo or will help you find that perfectly located home!

Joel Carcone
Re/Max Crest
www.joelcarcone.com
604-961-5365