‘Soft Landing’ Call Spotted

land ahoy
“Sure looks like you could just step out there, don’t it?”

“The Canadian housing market appears to have achieved “a soft landing” so far with sales cooler but still fairly steady along with prices, Scotiabank says.”
– from ‘Housing market appears to have achieved soft landing: Scotiabank report’, Canadian Press, 11 Dec 2012 [hat-tip Terminalcitygirl]

Will be added to the ‘premature bottom calls’ sidebar collection. -ed.

24 responses to “‘Soft Landing’ Call Spotted

  1. Have we landed (bottom out) yet? If not, how do we know it’s soft or hard.

  2. LOL, it seems just a *tad* early. Though the article seems to talk mostly about the number of sales… So maybe that’s all the bank’s choosing to talk about? Look to the good news, rather than the ominous?

  3. This, from Wikipedia:

    “… there is not one single verifiable instance of a soft landing following an economic bubble. Similar claims were made repeatedly … about the prospects for the housing market in the U.S. but there is now an almost unanimous consensus that the United States housing bubble is undergoing a significant market crash.”

    • “there is not one single verifiable instance of a soft landing following an economic bubble.”

      Isn’t that a tautology? Doesn’t a bubble crash by definition? If there was a soft landing it wouldn’t be a bubble.

      Yes, and yes.

      “Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. ”

      http://en.wikipedia.org/wiki/Economic_bubble

  4. Six months ago, ‘soft landing’ was when house prices stopped their continuous much-above-inflation advance and flatlined for a bit while wages caught up. Note that in this Scotiabank piece, the economist is ruling out a SHARP NATIONAL decline in prices, which isn’t a possibility anyone felt obliged to rule out before.

  5. Before vreaa, people could get away with stating stuff like this. Now… booked!

    • The Poster Formerly Known As Anonymous

      haha! Accountability, Bitchezzzz!!!

      (Sorry, too much time on zerohedge. The natives’ colloquial idioms are contaging.)

  6. “This could put some further downward pressure on sales volumes as well as prices, especially in markets that have already shifted into buyers’ territory”

    There is indeed a difference between a nation-wide hard landing and a region-specific one. Unless I’m taking this statement out of context they are portending increased distress in Vancouver in 2013. Hardly a “soft landing” from many participants’ points of view. Say what you want about Scotia, I think they just hit the big giant red “back the f*%$ away” button.

  7. “There’s nothing to see here……keep calm and carry on.”

  8. If you compare different articles of the same report, it is very clear that the original report indicates we have achieved a soft landing “this Fall” season. That’s pretty much is what we’ve seen nationally. No surprises there.
    You would also see this quote “Canada’s national housing market IS SHIFTING toward a more sustainable path, though significant differences in regional conditions CONTINUE,” “This could put some FURTHER DOWNWARD PRESSURE on sales volumes as well as PRICES, especially in markets that have already shifted into buyers’ territory or in certain market segments that are potentially oversupplied,”. In other words, we are not done yet!
    I think the Scotiabank report is probably pretty fair and accurate, the news article is misleading.

  9. Here’s a soft landing. Didn’t feel a thing:

  10. pricedoutfornow

    Just wait till spring…then we’ll really see if there is a soft landing. I say no. Spring 2013 will be one to remember!

  11. I lived in Nevada from 2005 to 2010 and can speak first hand about real estate bubbles popping, as well as arriving at the very end of the market upswing. Everything I’ve seen here in the past 8 months replicates what I saw in Nevada in 2005. Bidding wars (buy before you get priced out!) when I arrived followed by 15% price drops a year later when the flippers with the real money who don’t need credit to buy a house pulled out (it’s a buyer’s market don’t miss out!). I realize now that I’m seeing Nevada 2005 all over again. These concepts of “not losing out” and “it’s a buyer’s market” are an altered reality state perpetrated by the greed of the real estate and mortgage industry perpetrated by the amateurish real estate wanna-bes. The fundamentals won’t ever change – homes are worth what the average to well-to-do Joe can afford to pay in terms of serviced debt at historical rates, and that translates into selling prices way below what we’re seeing in this market today.

    The other interesting thing from what I saw in 2005-2010 is that on the decline houses still got bought and sold, a lot of them. People coming into the market to triedto seal a “good deal”, and compared to the 2005 highs, pruchases in 2008/2009/2010 seemed like a good deal. The problem was, the mainstream didn’t understand just how over-inlfated the market was, and it wasn’t until the bottom was near that the main-stream media finally started fessing up to the reality of the situation. The market just couldn’t overcome the fundamentals driven by a nearly complete drying up of mortgage credit (something that seems imminent here in Vancouver).

    Fast forwarding to today, just because houses are selling in November 2012 and prices haven’t dropped 50% in the past 8 months since the last peak doesn’t mean a soft landing has been achieved, not by a longshot. The most frustrating part for me for this article is I know it won’t be for several years until statements made in this article can be substantiated by long-term data. Force-feeding me a conclusion like the authors are trying to do is insulting because I know better from experience that you never really know “in the moment” when the market is in a long-term trough.

    • In my relatively short life, I’ve seen the same thing happen in Alberta. The housing market tracks the energy sector’s health quite well. Since moving to Vancouver I’ve been calling the housing market a classic boom-bust situation as it’s the same mentality and reality distortion, only to be told that I’m ignorant and don’t understand just how things are different out here. But you know, those of use from the prairies are inherently less educated and more likely to be born out of consanguineous marriages, so maybe I’m wrong.

      • Ralph Cramdown

        I’d suggest you think of a version of the old Alberta bumper stickers (“”Please God, let there be another oil boom. I promise not to piss it all away next time.”) that captures a post-bust coastal zeitgeist, except I bet Vancouverites won’t have so much of a sense of humour about it and they wouldn’t sell.

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