CMHC Forecasts Slowing Market To Come

02/06/2004

Last week I was invited to attend a market seminar put on by Canada Mortgage and Housing Corporation (CMHC). The speaker was one of CMHC’s forecasters and provided us with many sales and growth stats about Ottawa and Canada in general. As expected CMHC confirmed what I’ve been preaching for the last six months. As per the statistical graphing, our real estate cycle is peaking and the “Hot Sellers Market” we’ve been experiencing for the last six or seven years is about to come to an end. The leading indicators include slowing employment growth and the inevitable increase in interest rates. All is not doom and gloom, however. The representative suggested that the market would only soften in 2005 and we would not experience a complete melt down. I think he put it that, “We are forecasting a market slow down, at this time.” Generally after a Seller’s Market we see something called a balanced market where multiple offers are rare at best. During a balanced market there are enough Buyers and Listed Properties for them to choose from. During a balanced market, the driving motivations for Buyers and Sellers change from, “Fear of Lose and Greed” to “Genuine Want and Need”. All of which make for a less emotional, less turbulent market place, actually it’s quite nice. It’s not the balanced market I have concern with, it’s what comes after. Although CMHC does not foresee any major meltdown, history shows us that markets tend to be governed inertia – something moving in one direction will continue to head in that direction until it bumps into something – like a hot economy. Bottom Line Now is a terrific time to make your move. Next year may be fine as well, but if you need a mortgage for your new home, as most of us do, you might do yourself well to take advantage of this year's lower interest rates.

Thanks for listening.

This is Rob Thompson saying, “Good Luck and Good Selling!”

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