If condos are continuing to crash, will we have a collapse?
This question (‘collapse’, ‘it’s over’, ‘the music has stopped’) I am being asked often. Some ask it with glee. There is no collapse in the general market. Sharp value declines are in the luxury market which represents less than 8% of the market. I think Single Family homes in most Vancouver suburbs will bottom this summer/fall. Condos will take more time to adjust. One of the biggest problems will be as condo prices decline (and they will 10-15% further) buyers may not qualify for the mortgage of the new values. Lower prices may motivate the bank to say: We will give you a mortgage but $100,000 less than we promised.