House Prices Fall Again
May 3rd, 2009 Posted in Canadian Economy, Real Estate
Eat Bread Today, But Never Worry, There Will Be Jam Tomorrow
After a rally in the market in March which saw house prices rise in the US – and in other countries with close ties to it economically – the downward trend of previous months has resumed. This is what was expected, and yet it is still dispiriting to see. Not for potential buyers with disposable cash – for them it is a time of opportunity – but anyone needing to sell before they can buy is in a position of weakness, even in Canada with its position of relative strength financially.
The real problem in this situation is that talk of economic recovery is just that – talk. As things stand, there is little or no concrete evidence of imminent recovery, nor strong, provable justification for a prediction of recovery in the near future. This is a concern, as people in a position of weakness will find their problems easier to deal with if they have a timeframe for when it will pick up. Without that, there is a real sense that the situation will persist indefinitely – and no-one can plan for a point in the future that they do not have a deadline for.
How can we weather the storm if we do not know when the sun will come out? A phrase that is often used to refer to the hope of a brighter future is “jam tomorrow”. We may be eating dry bread today, but never worry, there will be jam tomorrow. But when tomorrow is an arbitrary figurative point in the future, the hopes of jam are less than enough to keep people satisfied. The only response that can sustain us is to be stoical. The situation will improve, and although we cannot be sure when that will happen, we have to stay optimistic that it will not be too long.
Being optimistic is hard, especially when we hear pessimistic speculations so frequently. But the optimist will be the eventual victor when the clouds lift because, having prepared for the best, they will be better able to take the opportunities that result from it. Sometimes it is hard to smile, but even putting on a fake smile can make your body release the vital chemicals that make you feel a bit more cheerful. That is how we must view the housing market. It’s a bummer at the moment, but optimism in the market can only help at times like this.
And of course, if you live in Canada, you can be comfortable in the knowledge that when things start to pick up, it will happen earlier and more obviously here than in most of the other countries in the world. Just look at what the financial crisis is doing in other countries, and the amount of panicking that is happening there. It’s not anywhere near that bad in Canada. There are reasons to be optimistic, and that is what will make this financial crisis easier to deal with. It’s not a good situation right now, but it will get better, and that is what we have to remember.
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