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It's finally official. The economists are telling us that what we've observed -- what we've lived with for ages -- is really here.

Choose your headline. The Toronto Star's "'Gruesome' job report startles economists" is a favourite. This is another important example of why consumers must trust their own observations and instincts and stop waiting to be told what's going on.

The "real estate market" that is referred to in the media is not a nationally, or even provincially, organized, interconnected marketplace, but a collective term for very localized, consumer behaviour in specific neighbourhoods. What really matters to property owners is how national economic up-swings and down-turns impact at their front door, and then only in combination with local real estate variables.

The value of your real estate is determined by how much a buyer, who wants that location and that type of zoning, will pay when they compare your property to everything else that's available in the area. The stronger the local economy, the stronger the job market and, usually, the more stable real estate values are.

Assurances from media, pundits, and government, that Canada was immune to the economic reversal that has settled all around it, have not blinded consumers to front-line observation of real problems in their communities. Plant closings continue to make news in British Columbia, Ontario, and too many places across Canada for the "average joe" not to have noticed a while ago that something was wrong. Do you know someone who has lost a job or others who are worried about their employment prospects?

Despite government concessions, Ontario's automotive industry has imploded at the cost of millions to taxpayers. Even if larger employers can be saved by further government support, small businesses, which receive little of no government aid, are already closing and taking key community jobs with them.

Economies heavily dependent on a real estate boom for local prosperity will suffer, as will most one-industry communities. Nanaimo, Campbell River, and other BC communities are faced with the closing of pulp mills which defined employment in their areas.

Reportedly, the construction of new homes in BC outstripped demand in May. Despite assurances that this meant things weren't too bad, property owners could see that homes were staying on the market longer and list prices were dropping. Impossible-to-get-into neighbourhoods and waterfront areas now sported listing signs and even "price reduced" labels.

In many areas, it is finally possible for established homeowners to find skilled workers for repairs and renovations -- a clear sign to property owners that real estate markets are on the decline.

But you knew this. Perhaps, you can add to the list of observed signs that the boom has gone boom. Did you act on your observations and batten down your economic hatch, or have you been living the high life under media assurances that Canada would dodge the economic bullet?

Investors and buyers waiting for a downward turn in the market, are getting ready to act. Other, less observant consumers, may have been caught unaware and will pay a price.

Credit card debt is going to be the killer now. Maintaining a lifestyle on plastic, rather than a pay cheque, is an expensive, potentially-disastrous spending policy. Credit card debt carries a double whammy since it also has a negative impact on credit ratings, so that borrowing power is reduced.

Those who heeded the signs of economic troubles ahead have probably taken financial precautions. For consumers on catch-up, here are a few suggestions for increasing your financial resilience:

1. Stop using your credit cards and pay off as much as possible. At least make minimum payments on time to maintain a good credit rating.

2. Top up your Emergency Fund so you have two to four months of money on hand, depending on your financial realities. (For more on Emergency Funds, see PJ's article How Canadians Can Prepare For Financial Changes ( illustrated House Construction Detailed Home Diagrams Images ) .)

3. Apply for a line of credit against your real estate or increase the existing one. This is not a move to enable you to continue overspending and living beyond your means—far from it. Home equity is hard-to-replace value that should be used with great care. Home equity is the back up for your emergency account. Should your income decline or end, the line of credit can carry expenses if the emergency account runs out.

4. Pay cash and ask for a discount for doing so. If you can't pay cash, save until you can.

Modify your search for "green" home-based solutions to include cost-saving approaches to everything and anything. Once you stop spending, you'll begin to understand how much your really need to live well.

These investigations ahead of crisis will help create peace of mind. This preparedness will also take advantage of your observant nature.

My favourite quote, and reminder, remains Louis Pasteur's observation: "Chance favours the prepared mind." What's yours?

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