cheaprealty net

King 5 News reports on the latest Case-Shiller data, which shows the first year-over-year home price decline in Seattle in over 17 years.

But Victoria is different, right?

Meanwhile, inventory in Vancouver is shooting through the roof...check comment 39 on how so-called paper equity can lead to a dangerous over-borrowing, which crushes a market once it turns:

You start with nothing and borrow $100 and pay $100 for a house. Your assets and liabilites are both $100. The prices around your house rise to $150 so you think your house is really “worth” $150 so you borrow $50. Now your assets and liabilities are both $150. If the market tanks and the house is now worth $50, your assets are now only $100 but your liabilities are still $150.

That’s what people did in the states - they borrowed too much and now owe more than the property is worth.

Google Casey Serin to read all about what happens when you try to take your profits before actually selling. He kept borrowing against false equity and ended up $2 million in debt and lost a bunch of houses to foreclosure before his 25th birthday.