Saskatoon Housing Bubble. To take a look at the short and long term fundamentals of the Saskatoon real estate market. To prove that Saskatoon and other parts of Canada have a housing bubble. Also looking at how the possible commodity bubble and troubles in places like China, the US and Europe will have on Saskatoon real estate.
Tuesday, February 8, 2011
Robert Shiller predicting a housing bust for Canada
That’s the conclusion of a leading U.S. economist who’s crunched the numbers and determined two factors that may take Canada down a notch or two: the housing market looks due for a U.S.-style drop; and, without oil, the country would be in trouble.
Robert Shiller, the Yale professor who correctly predicted the 1987 stock market collapse and the recent U.S. housing market meltdown, said Canada’s robust financial health compared to other nations is largely due to a random run-up in oil prices in the midst of the global financial crisis.
If the historical statistics serve as a guide, Canada looks to be headed for a big drop in home prices, although any decline probably won’t be as pronounced as the U.S. housing bust, he said.
Mr. Shiller said there was a natural connection between the United States and Canada.
"I would be surprised that the bubble that appeared in the United States and elsewhere didn't appear in Canada," he said in an interview with the Financial Post. "It's psychology, I think that drives it.
Here is that famous graph about US house prices from 1890. Shiller is probably the most knowledgeable person on how housing markets work and he has been studying them from over 30 years. You don't want to bet against this guy.