Now that sellers are starting to realize that “suckers” aren’t as ready to buy, the prices will adjust.

Down goes a lot faster than up.

It sounded like you said the “… ultimately it’s the government that let the bubble develop…government should have no business promoting owning vs renting …” and then you asked if changes to the rules indicate that the government recognizes that they’ve made the mistake that you identify.

I disagree that they had pumping the market up as an agenda. I also doubt that the situation will become so bad that they’ll bail out the lenders with taxpayer money (some of the insured mortgages are privately insured, and the CMHC ones have a pretty hefty premium stream). That’s all we disagree on.

40 year mortgages with 0% are not a good idea. I think a lot of people rolled their eyes at that (and other vehicles as well). I’ve said before that we’ve seen more changes in the mortgage industry in the last 8 years than we saw in the previous 25. They weren’t all good changes.

Anyway, the relevance of active player with an agenda is simply that you seemed to be saying that they were doing what they did with a specific plan – I don’t really agree with that part.

Dig -

You’re right. Its a buyer’s market. How can a buyer possibly lose in this environment? A seller, on the other hand, selling now? Big loss, right? Big trouble. Wouldn’t want to be in his shoes. No sirree.

Give me a call tomorrow and we’ll go out and grind some seller and force him to accept within 3% of his historically high asking price. Its a buyer’s market and he’ll have to accept. I mean, if everyone you talk to sees it that way, how can they be wrong? Whaddya say?

Like I said: sales are way off, inventory is way up, we haven’t seen prices move significantly yet, and this is far from a buyer’s market. A little patience might be in order.

That was last year and we were in a sellers market.

The buyer was the one feeling the pressure to get in before it became more expensive.

Now this summer things are different.

We are clearly in a buyers market and sellers are being pressured to drop prices to make the sale. I think we could conceivably see sellers panic more than buyers this time and start to see some serious downward pressure on prices. We aren’t the only ones seeing prices drop and the market weaken. EVERYONE I talk to is seeing the same thing.

What difference does it make if it is NOT government’s agenda to pump up the housing? The fact they let 40 year mortgage with 0% is bad enough. Just because they didn’t intend to, what they did become part of what pumped up the housing boom. So this is meat on the bones? And I am just not sure what you would define as active player and/or what relevance that definition serves.

My point is that the government isn’t a really active player with the agenda of pumping up the market. I also doubt that they’ll be bailing out any mortgages with CMHC’s money (which has been a cash cow, hence the pressing desire of competitors to get in that market). The argument that the government has made a mistake by pumping up home ownership with taxpayer money is, I think, weak, but feel free to put some meat on the bones.

Now, if you’re thinking I support 40 year, 0% down mortgages as a great idea whose time has come, um, what part of old right wing conservative white guy didn’t you recognize about me?

Diane:
You’re absolutely right. There was no intention to imply that private insurers don’t have to play by the same rules. The next question I have is: what do you mean by “government backed”? Where, or when, does the rubber actually hit the road there?

Tightening the credit lending rules will help. It is stated over and over that canada is different, but with mortgage brokers, ( do a search) you see all kinds of junk loans available just like the states. Over half of the loans were 40 yr, and probably only 5% down or less. I personally know people that had and still have interest only loans in Canada.

When this BS lending ends so will the vancouver market…

STILL OVER PRICED THOUGH!!!

The new rules apply to the other insurers, including Genworth and AIG. The rules are not restricted to CMHC – they are for *all* government backed insured mortgages. See http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2008/07/cmhc-drops-100.html