The CMHC sees stability in the housing market, forecasting prices to stabilize and correct modestly in 2012.

That has left some industry observers thinking that the CMHC is downplaying the potential drops. “Prices could drop as much as 25 per cent” according to a forecast by Capital Economics. Meanwhile, the International Monetary Fund and the Economist magazine have calculated homes in Canada are about 10 per cent overpriced.

Remember that these figures are averages and may not be a good reflection of your area. Prices are still going up in parts of the country and neighbourhoods but have already dropped in other parts.

If you are a first time home buyer or are looking at upgrading, these forecast mean that there may be no rush for you to buy but don’t try to time it perfectly either. If you are buying for the long-term, it may not make a huge difference overtime anyway and is less risky than waiting for a crash that may never happen.

The time to buy any investment, is when you are ready financially. Use this real estate market breather to assess what is affordable, reasonable, comfortable over the long-term and fits in your big picture. The worst thing that can happen is that you extend yourself financially finding that you are unable to sustain the lifestyle you want and save for emergencies and retirement.

Here are reports on the subject of real estate in Canada

http://thechronicleherald.ca/canada/62570-cmhc-sees-stability-housing-market
http://www.bloomberg.com/news/2012-02-13/toronto-bubble-risk-topping-new-york-in-market-for-condominiums-mortgages.html
Mark Carney just issued a new warning this morning

http://www.theglobeandmail.com/report-on-business/economy/carney-issues-fresh-warning-on-debt/article2347476/