Thursday, February 28, 2008
Bubblier than the Bubbliest
Well why not celebrate. Vancouver is the number 2 bubbliest of the bubbly cities in North America and the only one that is yet to pop. At an index value of 276 versus the peak index value for Miami of 279 why not celebrate since Vancouver real estate values will never fall and we will surely have rising prices for another 100 years thus taking over the top spot in short order and retaining that spot for eternity. Champagne will flow in the streets and we will pave them with gold because our real estate will be so precious that the very wealthiest of the wealthy will be the only ones to afford homes in Vancouver.
The fact that Miami prices have fallen 20% since that peak should in no way concern us because you know Vancouver has invincibility to financial turmoil and is a safe haven from all of those messy recessions and credit problems. Just ignore the developments going into receivership and the rampant speculation on pre-sale condos. Just ignore the rapidly growing inventory of unsold existing and new homes. Just ignore the collapse of the forestry, tourism and film industries. Don't worry . . . nothing to see here.
The index is normalized for the US$ / CAN$ exchange rate and is set to an index value of 100 in the year 2000. US prices are from the Case Shiller index values and Vancouver prices are from the REBGV Nominal House Price Index. Click on the chart to make it bigger.