Rob Chipman has pointed out on his blog how close we are to the record (average) prices of 2008.
Here is his chart:
Hard to believe that we would see record prices at a time when the US, our major trading partner, was in such difficulty- when our main exports- natural gas and lumbar are down significantly from a year ago, when major employers are cutting back or closing and even the City and Province are pulling in their horns.
I guess it is the very low rates, the pre-Olympic hype and building boom and.....a sense amongst buyers that they may have already missed the boat and have to dive in regardless of the price.
In any case the market is strong and if it goes much higher then we have to re-evaluate the 'bubble bursting graph' which we have been following so far.
It wold be unusual, compared with other bubbles, if the price bounces straight back higher. As I have said several times, if the prices exceed their previous highs then we have a different ball game.
However, I must admit the market 'feels' different from the record prices in late 2007 - early 2008. At that time houses were often selling over list, as buyers panicked to buy. There were less than 20 SFH under $1 Million in West Van, now there is 40.
Sellers are dropping their prices (albeit from high levels and by small increments) quickly. It is as if they think that this could be the sweet spot for sellers and may not last.
The Fraser Valley was nearly as hot as down-town, but after the crash of a year ago, the recovery has been much more muted outside of Vancouver.
Lets wait and see. I posted almost 8 months ago, that the huge drop in interest rates, coupled with the 15-20% drop in prices, had reduced the effective cost of ownership by 35% or more from the peak. Well we have given back most of the price drop.
If and when it does drop again, and the banks and CHMC struggle, unemployment rises...I doubt we will have much money left in the kitty to bail us out:
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2 days ago