Where we go now is crucial for bulls and bears. Last year we at the same spot- less sales but also lower inventory, so about the same MOI, then a few things happened:
1) Inventory came off the market and the MOI started to drop.
2) The economy picked up, so much so, that the B of C raised rates a teenie-weenie bit and threatened more of the same.
3) The HAM buying spree went into over-drive.
4) The Government changed the rules for the CMHC-Monster and pulled demand into early 2011 to beat the changes.
The result was a dizzying new high in prices in early 2011.
What about now? Some things are different, others the same:
1) Financial anxiety is up. So much so that the Bank of C has vetoed any more hikes and may even lower rates! So no help from interest rates, but also a different backdrop for speculators from the go-go late 2010 time-frame.
2) The HAM are still coming. No stopping them and their bags of money.
3) Prices have peaked in April and have been drifting slowly down since then. Outside Vancouver we have MOI in the double digits and prices falling significantly.
4) The Conservative Government is finally coming to the understanding that building a huge property bubble is not a good legacy. I don't expect them to do anything about it, but they may not reach to stimulate so fast the next time we have weakness.
We have to watch inventory. If we start to drop again, we could be screwed again! Fingers crossed.