[quote=CA renter]
Absolutely, there is no question that some areas saw more speculative activity than others. But aggregate inventory levels do affect prices of the more stable areas, too. And while many people who buy in the areas you’ve listed have some money, there are still plenty of people who rely on mortgages in order to buy. Interest rates will still affect them as much as they’ll affect people buying lower-priced homes.[/quote]
I strongly believe home prices tend to be localized, and each region attracts buyers looking for a specific basic requirement – schools, beaches, walkability, transportation, etc. Likewise the aggregate inventory affects local house pricing at varying degrees. Speaking specifically about PQ, during the recent downturn the price decline was modest. One of the reasons could be the homes are mostly owner occupied and rarely come up for sale. I presume this scenario will likely continue for another 20 odd years, when the current owners begin to think about retirement.
Past performance is not an indicator…. but I expect prices to remain flat in PQ for the foreseeable future. Again with the lending policies currently in effect, I imagine anyone in the market will make a reasonable downpayment to complete the transaction, and hence avoid significant defaults like in the past.
As a final note, long time ago when considering our house purchase we made a casual remark about having to pay 6 1/2% interest, and one of my in-laws in her sweet Scottish accent commented ‘Dad and I paid 18% as our mortgage’. Suffice to say that was the last we spoke and ended up purchasing a house valued 6x our household income. Interest rates do have an effect, and eventually buyer/seller will prioritize their requirements and adapt. e.g. smaller home, different area, postponing purchase, converting to rental etc.
