Do I need to worry about losing the equity in my home?
I recently came across an article in regards to sales and housing price figures expected within Canada in the 2009/2010 year. This article may help answer some of my clients questions about the fear of losing equity they have built up over the years.
“The economic downturn will result in a decrease in demand for home ownership leading to a decline in housing starts and existing home sales in 2009. Housing market activity will begin to strengthen as the Canadian economy rebounds in 2010 and the level of housing starts, over the forecast period, will be more in line with demographic fundamentals.” Bob Dugan, Chief Economist for CMHC.
Even with a 33% decline expected in 2009 for housing starts, Bob Dugan is being optimistic about 2010 expecting 163 350 housing starts and expecting housing sales to increase by 9.3%. Even though they will continue to start new homes in 2009, there is an expected drop in the average price of housing by as much as 5.2% overall in the year with it leveling off in 2010.
This is a common reaction to the buyers market economy of 2009. With a surplus of houses and less consumers buying, it becomes a classic case of supply and demand and some of us will get an opportunity to gain from that. Those that are looking to list this year may want to consider holding off until 2010 where the predictions for a more stable economy lie.
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