CREA’S HUMPTY DUMPTY
Posted August 14th, 2009 in Real Estate, Real Estate Stuff | 
Humpty dumpty sat on a wall,
Humpty dumpty had a great fall;
Threescore men and threescore more,
Could not place Humpty as he was before.
He Said
CREA President Dale Ripplinger said “Chances are good that the number of transactions in the second half of 2009 will surpass levels in the first half of the year.”
and We Wonder
Alice might tell us to stand in wonder when the Canadian Real Estate Association president makes such bold proclamations. “Could the president be the Mad Hatter in disguise”, asks Alice? “Prepare we must should we find egg shells at our feet”, says Alice. “What shall become of us?”, she murmurs.
Alas, to all, incomplete the tale remains til the ink dries on real estate’s final chapter of the year. 
I’ve heard that “all the king’s horses” weren’t much help to poor Humpty either, but it’s entirely possible that whoever originally told me this story had it wrong.
…and this from today’s Financial Post.
http://tinyurl.com/na49wl
The remarkable turnaround from an almost frozen market at the start of the year has economists stunned, and while they predict activity will level out soon, the risk is continued low interest rates will begin to stoke a house price bubble.
“We can’t rule it out,” Douglas Porter, the deputy chief economist at BMO Capital Markets, said of the possibility of a bubble. However, he said the scenario was hard to fathom given the underlying weakness in the economy. Even so, that weakness to date has not prevented a strong rebound in the existing housing market, which declined steadily throughout 2008 and hit a decade low in January…
…”Homebuyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher,” said Dale Ripplinger, the president of CREA.
Norm,
re: “All the Kings Horses” – ” three score” is apparently an older version – but I could be wrong.:)
with due respect:
As for Ripplinger/CREA – it might be that Alice was in charge of mixing the cool aid. IMO, statements such as this, add to the market’s condition and not necessarily for the better. From information gathered, the “bubble” as Porter calls it, is predominantly isolated to core cities. Why are the other segments languishing? Could it be that the core of the Canadian economy isn’t drinking from Ripplinger’s cup?
Locally, on the street I’m encountering many who were formerly employed. Many more will be suffering from post Olympic construction colds. That illness will act as a domino and begin to affect the equation.
Add the almost assured omnibus HST to this package and the pallor of Porter’s ‘bubble’ is going to change quickly.
It may already be determined that the road ahead is in fact lined with Humpty’s egg shells. Looking down the road , many people today, are a little dizzy from the cheap % rates and extended amortizations. The historical horizon is a little more sobering.
A question all might ask themselves is when the fan is turned on, where will they be standing?
I completely agree Larry.
The mortgage broker in my office tells me that in most cases people continue to push the limits of their total debt service ratios, even at today’s low rates. Ultimately, this could be like “the great adjustable rate mortgage, part 2.”
I found this Ripplinger quote particularly amusing, “Homebuyers recognize that interest rates and prices have bottomed out..”
Uh-huh.
Norm,
Wearing my curmudgeon hat:
Wondering out loud: about the psychology exhibited by a great number of people who have moved into an unexplainable level of ‘instant expectation of comfort’ that previously took families years to acquire through saving. Dare it be said, in the past, when those goals were achieved, they seemed far more worthy and satisfying. Now, worthiness appears to be measured by just more stuff.
Wondering some more: When that stuff is blown away by the big brown fan of higher interest rates, higher taxes, no employment or employment at a lesser wage , what will they make of their comforts (stuff) then? A puzzlement to be sure.
Humpty did suggest a trip south of the 49th would be enlightenment into the possibilities.
Remembering; a wealthy Chinese gentleman who in passing conversation said: “we never take holidays on credit.”
You are just being old fashioned Larry.
It is the God-given right o every individual to own a house, and lots of electronic toys and a new car every two years, and lots of holidays to hot places.
To do otherwise would be to deprive themselves and their loved ones, in this short life, of the many joys this world has to offer.
Can’t pay? No worries- they will lower rates to zero to help. No job? The government will buy your debt and you can start all over again.
The problem is the politicians and the banks (you can have it all ads) have convinced them that they do indeed have a right all this material stuff.
Frank,
You might be right but, I sense a wisp of ‘old fashioned’ sarcasm.
Sounds like you enjoy the sound of ‘spare’ change in your pocket as well.