Does Real Estate have Anything Left to Give in 2014?
At some point, there has to be a housing correction. Right?
Some argue there was a correction in 2013, based on declining sales activity. But prices never really followed and by September the market was roaring as consumers raced to buy homes in a climate of fear based on mortgage rates rising in response to the U.S. Federal Reserve easing its bond purchasing activity.
The big change will occur when the cost of money starts to rise and that won’t happen in 2014. Bank of Montreal’s latest report looking at Canada’s four largest cities still sees very little risk of a crash, though it says Vancouver is probably the market most at risk of correcting in 2014.
“We are very surprised the market rebounded as fast as it did this year,” said the economist, noting prices only dipped about 6% on average for Canada’s most expensive housing market. “That city is floating on a sea of foreign wealth. The money is pouring in and sustaining, at least on the upper end, Vancouver’s housing market.”
Read full article: Does real estate have anything left to give in 2014? Financial Post.
