Profile on BC Housing Bubble!

 

VH-May-18-2016

 

When I saw this chart I was pleasantly surprised, as it showed far more wave detail into this Vancouver Housing Bubble. Only people that are in the market don’t know that they are in a bubble, otherwise they would not be in it. The public still has the RE Fever! 

The two red arrows are my only edits and the main idea is to get you to focus to this wave positions as it sure looks like a 4th wave flat or even an expanded flat. This came to a screeching halt right at my bottom red arrow. Once this 4th wave was completed the bull market pattern changed.  This change came in overlapping waves no longer showing the normal  impulse type waves,  I take this as a diagonal 5th wave possibly ending in April, about three weeks ago.

We can never be exactly sure when this may pop, but I am sure it will. What needs to happen is for the price to start stalling or slow dramatically. Volume starts to increase and the flipping wars are on.  Flipping will be a race against time as sooner or later less and less buyers show up.  Many offers of higher bids would have to dry up as well. If and when the news breaks that buying with higher bids has dried up, then panic can set in as people find themselves in an upside down mortgage, and falling Vancouver house prices.  

Let’s say that sometime in 2016 this chart clearly pops, then if another future price leg is going to come quickly, then it will depend on the type of decline it makes.  Bubbles have a really nasty habit of crashing very deep and with most of them, they completely retrace their entire bullish phase.   I sure don’t expect a full retracement but we could look at three main areas that can supply us with a potential  support range.  My bottom red arrow is one of these first support areas with the other two, falling between 2000 and 2010. In the long run when this bubble bursts, then I would be very surprised if the average prices are “not” sold for under a million.  

Any major decline in prices can be stopped or halted when the next solar cycle bottom arrives.   Prices and the economy will eventually follow the sun, which can be about a 4-5 year up cycle.  This solar cycle should end close to the 2021 time period, which is still 5 years away.  

I think it was 1926 when the Florida real estate bubble burst, and at that time it only took months and all the buyers refused to show up for the spring of 1926. Needless to say prices crashed. This scenario may not happen exactly as described, but all it will take is a little price correction which can turn into a big price correction at any time.

I think any turning will be more secular in nature and will take much longer to play out so don’t expect this to happen overnight.