The good news about housing prices - And the bad



    
    Maclean's reveals new data showing that Canadian house prices will likely
    decline by 20 per cent and stay down for years
    

    TORONTO, Feb. 19 /CNW/ - If you're looking to buy, it's great news, but
if you already own, it's terrible: According to new evidence, Canadian home
prices could decline by 20 per cent, may not hit bottom until late 2011. It
could be seven years or longer before prices recover to today's levels.
    Maclean's senior editor Duncan Hood reveals a frightening new forecast
made by a brand new housing futures market. The new market allows
sophisticated investors to bet on where house prices are going, and it
predicts that prices will fall by much more than most economists are
predicting right now.
    Many economists are currently saying that we'll just see a short dip in
house prices this year, and the recovery will roar into action by next year.
But lately, they've been having trouble getting their predictions right. As
one Vancouver buyer has already discovered, you have to be careful about
believing the real estate predictions you see in the news. He made a presale
payment on a new condo this past summer, only to see the price of his new
place go into free-fall. Now he's being forced to back out of the deal, and
he's in danger of being sued by the condo owner for the difference-likely more
than $300,000.
    So who's right? The economists who see a quick rebound, or the futures
market which predicts that prices will stay down for years? Famous economist
Robert Shiller, a Yale professor and creator of the internationally respected
S&P/Case-Shiller Home Price Index, says that he saw a similar situation in the
U.S. just before their housing bust, and it was the futures market that got it
right. He adds that we should be critical of forecasts made by economists who
work in the real estate business as they are biased and under pressure to
predict relatively rosy markets. Given this, he would bet his money on the
prediction made by our futures market.
    But if the futures market is right, what will it mean for Canada? On the
positive side, for some, owning a house will finally fall into their grasp. On
the down side, it will mean more lawsuits against buyers caught by tumbling
prices, and a huge drop in the wealth of Canadians across the country.

    
    PLUS, also in this week's Maclean's, on newsstands Thurs., Feb. 18:

    -  The heart of the matter: Most women still don't realize that heart
       disease and strokes are more than just male ailments.

    -  Man-less women rule the Oscars: This year's best actress nominees all
       play solitary souls with a subversive streak
    

    About Maclean's

    Maclean's is Canada's only national weekly current affairs magazine.
Maclean's enlightens, engages and entertains 2.5 million readers with strong
investigative reporting and exclusive stories from leading journalists in the
fields of international affairs, social issues, national politics, business
and culture. Visit www.macleans.ca





For further information:

For further information: Louise Leger, (416) 764-4125,
louise.leger@rci.rogers.com

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