Monday December 21st, 2009 - Are We In A Housing Bubble Or Is The Market Just Heated?

This year is basically the complete opposite of last year. Last November the real estate market had it’s life completely drawn out of it due to the beginning of a recession which was highlighted as a possible depression.

Now fast forward to this year. It’s being said that home resales were up about 73 percent over the course of the year with continued growth during the month of November. The question at hand is whether or not the recent growth is sustainable.

Many economists are worried that record low mortgage interest rates is stoking a demand that may not be match different market fundamentals. Other factors include a possible rush to buy homes in early 2010 to avoid an increase in the key interest rate as well as the implementation of the HST in both British Columbia and Ontario.

But there is also the possibility that economists are playing up the fear angle for headlines in the paper. After all, not much sells newspaper like fear and uncertainty. But most certainly the growth numbers can not be ignored.

Sales in the Greater Vancouver area went up about 250 percent last month! That’s a pretty staggering amount, but considering the economic uncertainty last year it’s not much of a surprise. There was only 874 sales last year, which was extremely slow.

With inventory at it’s lowest point in a few years in the area, it’s sure to be a market leaning towards sellers at the start of 2010.

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