Canary in the US Housing Market: Canadian Snowbirds Cash Out

Canary in the US Housing Market: Canadian Snowbirds Cash Out
by Wolf Richter • April 28, 2016


[font color="blue"]And sales crash.[/font]

Naples, Florida, a wealthy beach town on the Gulf of Mexico, known for its golf courses and high-end shopping, and a favorite hangout for Canadian snowbirds trying to escape their cold winters, has a problem:

Pending home sales in the first quarter plunged 23% from a year ago, according to the Naples Area Board of Realtors. Closed sales plunged 19%. Overall inventory soared 33%. In the two mid-price ranges from $300,000 to $1 million, inventory soared about 42%!

But sellers haven’t gotten the memo yet: even as sales crash and as unsold inventories pile up, the median closing price rose 8%.

That’s how housing busts start out. Buyers lose interest at these prices and evaporate, while sellers go into denial. As prices still rise, volume collapses. When sellers begin accepting the new reality, or when they’re forced to sell, then prices are getting slashed until enough buyers materialize. ...................(more)

http://wolfstreet.com/2016/04/28/canary-in-the-us-housing-market-canadian-snowbirds-cash-out/