November 24, 2010
Let me start this post by saying this: the fact that housing prices have dropped does not mean that you need to run for the hills. Prices haven’t dropped in 16 months; it was bound to happen. That being said, it’s still news.
According to the Financial Post:
Housing prices dropped 1.1% in September, which also marked the first time since February 2009 that prices declined in all of the metropolitan areas covered by the index.
Since September 2009, prices have increased by 7.9%. That number I quoted above was for the monthly decline by the way. Prices are still up year-over-year.
The reason I urge you not to worry is because prices are still 5.5% higher than their pre-recession peak. Consider the situation in the US where prices are still 28% below their peak. Damn. That would suck.
But don’t get me wrong, I’m not saying by any stretch of the imagination that this is a slight pause in the hyper-appreciation of the Canadian real estate market. I think we’ll see minimal price appreciation in the next few years, but I still maintain we are NOT about to plunge into a tailspin of price declines. We are in a balanced market with more homeowners than usual– that means no collapse, just a slowdown.