Who would have thunk it!
The US has had a catastrophic RE melt-down, many of it's largest companies have gone bankrupt, most of it's large banks were insolvent and required tax-payer money to stay open. Meanwhile the US's largest trading partner, Canada, is having a rip-roaring RE boom!
That is not how most bears thought the script would be written.
And I have to admit the market is still a rocking and a rolling. I spoke to a Realtor tonight who just wrote a no-subjects, full price offer on a Burnaby house that had been listed 3 days and there were several other full-price offers presented at the same time.
This smells like the panic of 2007 all over again.
We know how that ended, in a blood-bath. Will this too?
It is crazy how an asset can go from must-buy-at-any-price-panic to no-bid and back again in one year!
Basically inventory for July has been flat, going out within a 1-2% of where it came in, as have prices. I am going to be watching the next couple of months carefully to see whether this buying frenzy continues. If so, the bears will have to do some serious hibernation until after the Olympics.
All assets are now linked. RE, gold, oil, stocks and even bonds. They have all been on fire since March 2009 without the even slightest correction. I expect late Summer and early Fall to bring a larger correction in all assets.
If it doesn't then I for one will have to consider whether the economic rebound is stronger than I expected.
Toronto Bursting? – “People need to ask themselves very carefully, “Why am I buying this house?” - During the first two weeks in May, according to preliminary data from Toronto Real Estate Board, home listings surged 47% from the same period last year ev...
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