Just sit back and do nothing. It doesn’t sound like the most proactive advice when it comes to the housing market, but it may just be what everybody needs to hear.
Panic is the worst thing that could happen because when that mentality sets in and people become irrational, it’s hard to forecast how low prices will go, says Benjamin Tal, Deputy Chief Economist at CIBC. He’s among the many who predict that prices will fall but by a moderate level that does not resemble the US crash.
“There is nothing to fear but fear itself,” says Tal, paraphrasing the famous quote from US President Franklin D Roosevelt before his election. The economist’s worry, and that of others, is that we’re now talking ourselves into a housing crash by creating a scenario in which every new statistic is interpreted in the most negative way with an eye on trying to constantly compare the Canadian housing market with what our neighbours to the south experienced just before their housing prices plummeted by as much as 50% in some markets.
A study this summer by Environics Analytics WealthScapes found the average net worth of a Canadian was $363,519, with $269,024 of that figure the net equity in real estate.
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