Is real estate market heading toward price correction ?

short answer is NO.  Real Estate market is not heading toward price correction and prices will not be falling down. At best home prices will be appreciated by single digit number not double digit that we have seen in recent months , not double digit numbers we have experienced up now. The reason why i say that is because up to now real estate market was abnormal in Canada. In 2008 markets around the world had grind into complete stop. Buyers who wanted to buy homes decided to wait. All these buyers who waited in 2008 jumped into the market in 2009 and 2010 which together with relatively low inventory created bidding wars and increase in prices.

Today we are in  normal market where summer and winter periods being "slow" in real estate. Some buyers mistake this as signs of "market correction" but those buyers should realize that for market corrections 4 factors must be present

 A. high unemployment - we do not have that. unemployment is low.

 B. low consumer confidence - we do not have that. Consumer confidence is high. 

 C. high inventory - we do not have that. inventory on the market is low. (at least in Toronto)

 D. high interest rates - we do not have that. Interest rates are low. Yes variable mortgages went up twice buy .25 recently but mortgages are still very low. Given current inflation rate and variable mortgage rates, current bank offers are very, very good.

 So