This is a good article on how most media blew the story about falling real estate activity and prices in Canada.

Listen I don’t want to be labeled a fool because I don’t see us falling into a depression, but Garth Turner has in my humble opinion gone off the deep end.  In one of his recent blog posts he gives everyone a list of the things they should be doing if a depression comes.  This man is truly scary and I am glad his constituents who know him better did not vote him back in. Yikes! 

Bank of Montreal announced yesterday that they are drastically reducing the rate for a five year fixed mortgage to 5.25%.  Surprisingly though it is still not on their website, must be that their geeks don’t work on weekends, anyway I digress.Why is this intriguing to me?  If you read the article the President was quoting as saying“Helping to lower funding costs is significant for the entire industry and we are excited to pass along the savings to our customers. By offering a very attractive rate that is guaranteed for a full five years, we are giving Canadians the added benefit of predictability and comfort during an uncertain economic environment.”Let’s all say it together “THREE CHEERS FOR THE BANK OF MONTREAL!!!”No let’s see if the other banks have the moxy  to step up and do the right thing.  These measures are needed to instill confidence to the system AND to get consumers out buying houses.  This is precisely what the government had intended when they announced the purchase of CMHC insured loans from the banks, to lower the banks cost of funds so they could pass that on to consumers.Again, good for you BMO, shame on you other banks, now wake up and get in the game!!! 

The Canadian Real Estate Association  reported today that Canadian Housing Sales dropped 14%  Well, where should I start?  First of all yes this is bad, BUT these papers always fail to put into perspective what these numbers are compared to?  The drop was a year over year comparison which means they were comparing to last October.   2006 and 2007 as we have said many times was an anomaly.  In fact those that were able to ride up and get out at the right time were lucky and the rest of us are just settling back into normal historical long term increases in Real Estate.  Second, and probably more important is that these numbers are skewed due to what was going on in October this year.  What was hitting consumers?  Lot’s of crappy news, it is no wonder they stayed home.  Let’s also not forget that last year at this time People in Canada’s largest Real Estate market Toronto were scurrying to make deals to avoid the incoming stupid land transfer tax that the city was tacking on, which artificially increased numbers in October 2007.Let’s be clear the situation is concerning yes, but it is also needed and will bring us to a balanced market that we desperately want heading into 2009.  No pain, no gain as they say.  Things will be better, particularly in Western Canada once we come out the other side by spring 2009. All we want is a historical balanced real estate market for 2009, let’s hope Santa is good to us 

Now Macleans Magazine is jumping in.  Trying to alarm Canadians that there is a sub-prime mortgage crisis in Canada, Grrrr.Give me a break.  Xceed mortgage is the last sub-prime mortgage lender in Canada trying to hold on to their business when EVERYONE else either re-tooled their product line to focus solely on prime business or got out of the business all together.The fact that they are now refusing to re-new people is bad, actually real bad, the facts remain this is not a US style sub prime mortgage crisis.  The Sub-prime market in Canada was less then 5% of the overall market at it’s peak compared to almost 35% of the US market, and Xceed was probably less then 1% of the overall market.In the article in mentions a guy is going to start a class action lawsuit…good luck.  If a lender refuses to renew you then you have the option of going to another lender, the law gives you ample time to do that.  Funny how they made this person look like an innocent victim without telling us whether he tried to go to other lenders to pick up his loan?  Given the fact that he was an Xceed customer in the first place suggests he was likely a troubled applicant, and sadly he probably could not get approved in today’s tight credit markets.  On top of that his value of his condo has dropped dramatically.  Let’s be clear, it is lousy what is happening to this guy BUT it is far from a sign we have a crisis nationally even remotely close to the US sub-prime calamity,  shame on you Macleans what a desperate attempt to sell magazines