I was stunned by this chart posted on the Vancouver Housing Market Blog.
Mish message to Vancouver:
No matter what you think about the Olympics, about tar sands, about the Loonie, about commodities, about anything else, that is a chart of a bubble. It is ridiculous to think that an upcoming two week Olympics will hold prices sky high forever. It is equally fallacious to think that high commodity prices will bail you out. For starters, a worldwide recession could kill commodity prices, and even if that does not happen, housing prices in Vancouver or Toronto can no more stay above wage or rental prices than they could in Florida.
Look at Florida for what is about to happen. Your turn is coming up. I expect to see a 50% plunge in the value of some of those condos (if not more) before this plays out. Given that a Canadian housing bubble popping is not priced in (from my perspective), the Loonie could be subject to a significant correction as well.
Mike Shedlock / Mish/
