Oversupply of Real Estate. Markets are Flooded as People Fear a Crash ! ! Vancouver vs Toronto

My Opinion : An oversupply in the housing market can create panic for a number of reasons.

First, an oversupply of homes can lead to a decrease in housing prices. When there are more homes on the market than there are buyers, sellers may be willing to lower their prices in order to attract buyers. This can cause a downward spiral in housing prices, as sellers who are unable to sell their homes at the price they want may be forced to lower their prices even further in order to compete with the other homes on the market. This can lead to panic among homeowners who are worried about the value of their own homes, as they may be concerned that they will be unable to sell their homes for a price that reflects their investment.

Second, an oversupply of homes can lead to a glut of foreclosures. When homeowners are unable to sell their homes, they may default on their mortgages, leading to foreclosures. This can create panic among homeowners who are worried about losing their homes, as well as among investors who may be concerned about the value of their investments in the housing market.

Third, an oversupply of homes can lead to a slowdown in the housing market as a whole. When there are too many homes on the market, it can be difficult for buyers to find the home that they want, which can lead to a decrease in demand for housing. This can have a ripple effect on the economy, as the housing market is often a key driver of economic growth.

Overall, an oversupply in the housing market can create panic among homeowners, investors, and the broader economy as a whole. It can lead to a decrease in housing prices, a glut of foreclosures, and a slowdown in the housing market. It is important for policymakers and market participants to be aware of these risks and to take steps to prevent or mitigate the negative effects of an oversupply in the housing market.

By Mike Martins