San Francisco's isn't the only high flying real estate market to be showing signs of stalling.
According to Bloomberg, appreciation in Vancouver, recently ranked as the bubbliest market in the world, has ground to a halt. High prices, plus recent legislation aimed at curbing foreign investment in the market, have cooled the once-hot market.
As one agent quoted in the story put it: "Market activity ultimately comes down to sentiment." We couldn't agree more: sentiment is often over looked in favor of more tangible measures of market activity. That's why we look at things like sale / list ratios and days on market to gauge what market participants are feeling.
Lastly, and perhaps a bit self-serving in an attempt to coddle our frustration at being early in calling the impending downturn, recent analysis highlights how long it takes property values to react to changing market dynamics. Residential supply began creeping up way back in 2005, with prices flattening out in 2006. But it wasn't until 2007 until the market at large noticed anything was wrong.
Real estate is inherently slow-moving, but years of good times become engrained in the psyches of market participants. Not only to they (we?) become leveraged to continued good times, but the longer a boom runs, the more convinced we become that this time is truly different. Bubbles, by their nature, defy conventional skepticism and only when the most ardent bears throw in the towel is it time to place bets that the fall is nigh.