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  • Housing Market May Crash If Interest Rates Triple

    Nice headline isn’t it. While it’s true that if interest rates were to triple from their current rates it would cause serious grief to the housing markets, it really isn’t very likely. This is an example of some of the bad news headlines that seem to pop up quite often.
    The headline could just as easily have read, Housing Market Will Boom If The Economy Booms. Also a very true statement, and likely more realistic to what we may see over the next several years as the local provincial economy chugs along. Although, the real story often isn’t just the headline.
    That’s part of the problems with headlines. Many of them are speculation, or they are just looking at the positive or the negative sides of what could occur. This is why we see polar opposite types of stories appearing on TV, in the new and all around us as different factions promote their views and usually from week to week if not day to day.
    We continually get bombarded with so many different views of where the market is going and why, the big question becomes, how do we make sense of what’s really going on?
    Well to start with, you need to read my column every week! Just remember though I may also have my own opinionated view as well!
    After that though, you need to look around a bit and see what’s happening not just locally but around the country and the world. If you really want to get serious, you can even do some historical research.
    Too often we get caught up in just what’s going on in our neighbourhood, our little city or even our province and we neglect to compare it to different scenarios across the country or around the world. Examples of this would be people complaining about our economy locally. This is a tough comparison when you look at our ridiculously low unemployment rates versus double digit unemployment in other regions of Canada.
    Or worse yet we compare what’s happening in Canada, or the world, to what is happening in our little neck of the woods. As the US and Europe are going through slowdowns, it does affect us, but the world market has grown to be much bigger than just those two areas, as the activity in China and India has shown us. This means our energy resources will still be in demand if the US market slows down, but realistically, they are a long ways from being able to stop using our resources to create everything from gasoline to plastics.
    In the grand scheme of things, Alberta is just a tiny little pocket of what is occurring in the world, but we are a very fortunate pocket. We have some challenges, but in our energy obsessed world, these challenges will turn out to be extremely beneficial to the economy and our housing markets. So before you get too caught up in the next positive or negative headline, be sure to read the fine print in the article.