Hmmm...a massive bailout by Europe to support the Euro "no matter what", according to one of the committee involved...prices seriously correcting in European countries most affected by the collapse of the property markets in late 2008...buyers who are carefully weighing the deflation vs inflation arguments...concern about potential erosion of currency valuation plus dramatically reduced prices, making some buyers (those in heavy cash positions?) decide on "low ball offers" (taking some cash off the table/getting back to hard assets?)...definitely all a very "mixed bag", indeed!
Media reports of boom markets in Canada, from mid-2009 to early 2010, neglected to point out that the "hot market action" occurred in the primary residence/city marketplaces and did not carry over into any rural or secondary home/discretionary market. This may have been the case globally, in all discretionary marketplaces.
The media also neglected to point out that the busiest segment in Canada's city markets was that entry level residential property category. Undeveloped land, commercial options, high end/luxury residential remained very slow/inactive.
No one "has to" buy a second home and retirement options can be put on hold until better times. Job insecurity means later retirement, for many. Holding properties were not of interest, as the perception of deflation/depression as an ultimate scenario meant a desire to get out of debt/have enough cash to live through the downturn.
With so much paper money being printed, globally, and government fear of severe social unrest (who were those rioters in Greece, who fire-bombed a bank, and killed those innocent bystanders inside?), there is a continuing decision from "the top" to keep the balls in the air, and to stave off global dissolution of the entire economic edifice.
Economic collapse means social collapse and that means...well, pain and suffering, for sure, and potential for more riots.
So...fear of paper money becoming ever more "worthless", if the inflationary scenario proves correct. Worry over social unrest in the wake of economic unraveling, if the deflation theory wins out. Worry and fear continue, then, no matter which version emerges...lots of stress about, that's for sure!
A seeking of a safe haven: a place to be able to grow food (veggie garden/orchard), a stable government, a culture that is familiar and enriching, close enough to not be necessary to fly there, and yet enviably to be slightly "apart"... sounds like Salt Spring and the Southern Gulf Islands, right?
In this continuing mixed moment of shift, without a crystal clear direction, the buyer is in control in any secondary home environment, no matter where it's located.
That means the seller has to reduce to try to attract the buyer into activity. However, that takes some thought, as inaction isn't really about price. When a buyer says "I don't know, I'll think about it", they mean it.
There is no propeller to action in a discretionary marketplace. The buyer creates a market, not a seller or a realtor. If the buyer says "not right now", then nothing happens.
There does seem to be some flickers of action in process right now, and in the luxury segment. Buyers are making offers substantially lower than list (even though it's a reduced list). In some cases, they're successful. In others, seller is willing to wait out the inactive time, for a clearer market signal.
Your thoughts? Always welcome!
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