They are not better than weatherman when economists forecast economy or markets. Some people said:" Weather Chanel is located in the south of boarder. That is why they hardly forecast correctly." I asked:" Is it in south of boarder of Texas? Because their forecast sometimes was not even close." Do you want to know a little about the housing market in Canada? Read today's Globe & Mail: http://www.reportonbusiness.com/servlet/story There are a herd of bears in Merrill Lynch. That was why they did not do so well as Goldman Sachs in past 5 years bull market. However, Merrill correctly predicted recession and interests cut on the heat of commodities bubble at begin of this year when Goldman predicted oil price would reach $200. Two year lag theory has been proved correct historically, but not 100%. The inventory is a worry, big worry comparing with US, but we don't have (too much) subprime like US although we had some period of time 40 years mortgages and zero down. US is heading to recession and Canada will follow. The interest rate will not go high beyond home owners' affordability if they can keep their jobs. Market will adjust itself due to inventory and economic slow down. How much down will depends on region by region, demography and inventory. The key to housing market is jobs. If US recession goes deep and long and Canadians won't have a good employment. People with big mortgages won't meet their payment if they lost their jobs. If recession lasts long, they have no choice but put their house on sale or foreclosure. Ottawa's market is unique in Canada. Hi-tech is a bit worry. No one can afford upgrade their technology if their balance sheets are not looking good, also how long will credit market be tight like now? It affects mortgage rate and some business operation. Government employees are worry free at the present. Unless one day Government run big deficit like late 80s and early 90s and started laying off, Ottawa's housing market will stay market adjustment mode, no housing market catastrophe in foreseeable future. Another issue is real estate investment market. No figure yet, not in the consideration. It could be another picture after 3 to 6 month from now.