Booming real estate markets are producing another kind of bubble: An expansion of authors writing about a looming crash. Writers. One word. Geography.

A lot of writers subject matter, concerning the housing bubble bursting is based on housing prices rising faster than the rate of inflation, when they should be merely keeping pace.

Up until 2000, housing prices kept pace with inflation and lately they’ve gone up twice the rate of inflation. It’s the biggest deviation in the world from the long-term price trend. Adding prices must drop by half to get us back to the trend line where we were in 1975. This is the attitude of a lot of doomsayers out there, the difference here in Vancity... Geography.

Bubbles bursting on our housing prices are a concern for many of us because we all live in one and for a lot of us it is one of the largest investments you will make in your lifetime. Writers more and more are capitalizing on Real Estate Investment Doom. Fortunately for Vancouverites as well as similar geographically laid out cities (Hong Kong, NYC, Sydney), there is no where else to go and this anomaly is where the theories may not apply. 

It doesn’t matter in a recession or the time of a boom, you always have these books coming out. They keep making all these calls every year and maybe they’ll be right in 2020 or 2022. Big surprise. Prices will fall at some point but not always due to "Bubbles Bursting" 

One thing is for sure: Mountains move slowly and the oceans are only getting bigger. Land is a premium and here in Vancity, there is not a lot of it left to build on.

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