Housing going under?

All over the news, you hear about the coming market correction….

“10, 20…even 30% drops are coming”…..Thanks Kevin O’Leary

Today on News Talk 1010 there was a guest speaking about the last time there was a significant correction (late 1980s), the apartment building he was living in had 90% vacancy!......not 90% occupancy…90% vacancy!...Must have been lonely in that building!

His argument was that today’s market, while being slightly overvalued, is not being plagued by high vacancy.  In fact, it is quite the opposite.

Another good point (one I have mentioned before) was made regarding the “generalization” made by the media about the “Canadian” housing market.

The truth is that there is no “Canadian market”….real estate markets are so specific, that one could not possibly generalize them, even within a city!

If I am looking for a condo on King Street in downtown Toronto, would that be different than looking near High Park? Absolutely!

Each city has markets.  Each market has submarkets.  Each submarket has several products (condo, townhouse, detached, semi-detached).  Each product has unique features.    Am I making my point here?

Yes I feel like real estate is WAY overheated in some areas….specifically Vancouver and Toronto… and most notably the condo market.

Do I think the market will crash? No

Would a decline in prices affect other areas? Maybe…but I don’t know how much.

The reality is that almost no one can accurately predict what the housing market will do. 

For someone looking to invest in real estate, my humble advice would be the following:

-          stay away from speculation (pre-construction anything)

-          invest in ‘starter’ homes

-          invest for cash flow, not appreciation (more on this in my next post)

Thoughts? :)