A real estate bubble is defined as a period of rapid increases in valuations of housing until they reach unsustainable levels relative to incomes and other economic elements, followed by a reduction in price levels.
As the economic pendulum swings to and fro in Canada, in Barrie Ontario that sway has always been less exaggerated than in other larger Canadian urban centers. Maybe it is our conservative nature. Maybe it has to do with our persevering attitudes that see us through extreme weather shifts.
When Barrie awakens to two feet of fresh snow we get on with our day. Toronto shuts down and calls in the Army. Somewhere in there lies the difference but whatever spawns that herd mentality that drives Toronto and Vancouver's masses to orgiastic home buying crescendos is never seen here in easy go lucky Barrie Ontario or at least thankfully not to those extremes.
Much of 2009 gave us lower sales numbers than the previous year but by the fall of 2009, statistics for much of Canada showed market activity up over the previous year's fourth quarter. A shift had begun away from wait and see attitudes mainly fed by American cable news channel's nightly cries and chants of economic killer bees that never did find their way across border.
Buyers that traditionally would have bought earlier in each of the past ten years stepped up towards year end.
The following spring market was busier than usual in 2010 fed by still many who had been holding off and compounded by those anxious to buy ahead of the pending HST, a tightening of mortgage qualification rules and the growing possibility of rising bank rates.
In Barrie, that increase in real estate activity as we saw over the past nine months triggered barely a glance and a yawn from the citizenry where as in larger metropolises the babbitts were literally lining up three days early for new condo releases and once more entering into bidding wars for tired wartime duplexes and seven figure homes alike, driving up property values further beyond sustainable levels.
Mob mentality has no practical place in real estate trade but it is what I believe will be having economists summing up the year 2010 in Canada as having gone through a real estate bubble. I will go on record now as having predicted that in 2010 Barrie survived a real estate ripple.