Real Talk!

"A new Elon University poll in North Carolina shows Sen. Barack Obama leading Sen. Hillary Clinton in the state's Democratic presidential race, 45% to 31%. In the GOP race, Sen. John McCain is way ahead of Mike Huckabee, 62% to 24%. Caveat: 'The sample is of the population in general and does not restrict respondents by their voter eligibility or their likelihood of voting in an election."

The American election process does go on. I’ve been watching the debates and reading press releases and scouring candidates web pages, with particular emphasis on their views of the “housing crisis”.

In the United States, experts are saying that the value of homes will fall, and even more families could face foreclosure. Blamed is the fact that some homeowners took out adjustable rate mortgages when interest rates were near all-time lows. Then, when the interest rates went up, some of those borrowers were no longer able to make their monthly payments.

Between 10 million and 15 million American homeowners may soon find their homes are worth less than the amount of their loans, according to a leading housing market economist. Nouriel Roubine, a professor at New York University, told the Reuters Housing Summit in New York on Tuesday that many such borrowers may decide to abandon their properties and cut their losses on bad investments.

I stumbled across a fascinating blog by Vernon L Smith called themessthatgreenspanmade.blogspot.com and I would like to quote him here:

“Thank you President Bill Clinton for your 1997 action, applauded by the banks, the realtors and all citizens in search of half-millionaire status from an investment they could understand and self deceptively believe to be low risk; thank you for fueling the mother of all housing bubbles; thank you for enabling so many of us who bought second or third homes, and homes before construction began, which we then sold to someone else who dreamed of riches from owning homes long enough to sell to another fool.”

Thank goodness we haven’t felt the same crunch here, in Canada.

Canadian recession fears are said to be receding and our housing market is still strong. "Despite some global financial instability with regards to the U.S. housing market, Canada continues to experience robust employment levels, ongoing income gains and low mortgage rates," said Bob Dugan, Chief Economist for CMHC. "This has strongly supported Canada's housing markets.

However, housing starts across the country are expected to decrease in 2008 mainly due to recent increases in house prices, which will push mortgage carrying costs higher for home buyers."

The news in this province is particularly optimistic. The Ontario economy is expected to improve slightly during 2008 and this will help sustain housing demand across the province.

I guess the next time I hear someone grumbling about the crazy hoops they have to jump through to get a mortgage, I will have to remind them that it’s because we’re Canadians, eh?