Can a real estate crash happen and how will it affect me?

It has been fascinating to see the transformation of Lily. After working with her for more than 15 years, her growth financially, socially, and professionally is nothing short of being proud. She has a professional position with the city, has a rental property, and has just sold her principal home in October 2020.

What can be the problem?

She and her realtor cannot find acceptable housing which is both affordable and which she will be happy with. Imagine my surprise when she calls me and informs her work colleagues are telling her a real estate crash is imminent. Lily asked me for my thoughts? It is the fifth call I took which was similar to Lily’s.

Needless to say, 2020 was a painful year for all of us. But making a prediction such as housing crash with the following factors is nearly impossible:

• COVID-19
• Canadian economy
• The lack of homes for sale or general lack of supply
• The current rent issue in major Canadian cities
• Emerging Canadian government and lending support [mortgage deferrals]
• The migration of citizens from cities two smaller more wide open areas
• Record Level Canadian mortgage rates

Who would have thought our job and economy could be so weak and yet housing prices would continue on their hot price. I realize I am not smart enough to know what will happen. Predictions, speculations and prognostications have been wrong for years.

The housing market demise is out of my hands and just about everybody else’s anticipation. It is really out of our hands.

What is in our control?

Getting our financial house in order in terms of debt. Working hard at our careers and enhancing our skills. Most importantly, staying healthy and taking care of our families. These areas we can control. A market crash with real estate will affect us all but hopefully if it should occur we all will be in better positions.