Looks like its going to contunie to be a buyers market!!
With the decrease in market prices along with the low interest rates this is a prime time for anyone who is looking to upgrade from their current home, buy a second home and or even looking to refinance their current mortgage and lower their rate and payments. The article below talks about the the drop in home prices ahead.

Sales and prices of existing homes will continue widespread declines that took hold in the middle of last year, and no province is expected to buck the trend, said a forecast from the Canadian Real Estate Association (CREA) released Monday.
Existing home sales are expected to fall by 17 per cent year-over-year in 2009 to their lowest level since 2000, the report said.
The sharpest drops in sales activity will be in Alberta, British Columbia and Ontario, where 19 per cent fewer housing units are expected to be sold this year.
Declines are expected to be most moderate in Prince Edward Island (-4.5 per cent), Manitoba (-6.5 per cent), and Newfoundland (-7.3 per cent).
The decline in housing starts was led by erosion in Western Canada as the prairies and British Columbia suffered the most.
Resale housing units totalling 360,900 are expected to change hands in 2009, compared with 434,477 in 2008.
Job losses and flagging consumer confidence are hurting the resale market, said CREA president Calvin Lindberg in a statement.
The average existing home price is expected to fall by 8 per cent in 2009 from the year before, and then stabilize in 2010.
In 2008, home sales in Canada fell by 17 per cent, and prices slid by under one per cent.
CREA's estimate calls for home sales levels to bounce back by 10 per cent year-over-year in 2010, and for prices to edge up slightly.
Listings should start to drop as buyers who can't get their asking prices pull their homes from the market, said CREA chief economist Gregory Klump. In time, this should put a floor under prices, he added.
The forecast was released the same day as data for the new homes market, which showed building activity has continued to decline across the country.
Housing starts fell by 11 per cent in January to 153,000 on a seasonally-adjusted annual rate basis, the Canada Mortgage and Housing Corp. said Monday.
Total urban starts are now down more than 40 per cent from a year ago.
The decline was led by erosion in Western Canada as the prairies and British Columbia suffered the most.
“It is clear from these data that the Canadian housing market is under a great deal of pressure,” said Charmaine Buskas, senior economics strategist at TD Securities.
“The combination of an increasingly weak labour market and lingering concern about the state of the economy has left consumers unwilling to take the plunge into the housing market,” Ms. Buskas wrote in a research note. “The correction in Canada's housing market continues to unfold and it appears the pace is a bit quicker than we had originally anticipated. In the face of continued economic weakness, housing may not see a rebound until early 2010.”
In urban areas, construction starts fell 15.6 per cent. Multiple starts fell 12.2 per cent while single starts 20.2 per cent, Canada Mortgage and Housing Corp. said Monday.
“To a certain extent, the decline in housing starts coincides with recent developments in the existing home market,” Bob Dugan, CMHC's chief economist, said in a statement. “Reduced sales and increased listings in the existing home market have led to reduced spillover demand in the new home market.”
CMHC said the decline swept across all regions but was led by a 30.3 per cent fall in the prairies and 29.1 per cent erosion in British Columbia

Globe and Mail, Feb 9/09

We're clearly in uncharted territory, and not far off from the bottom. Yet, some economists are nonetheless calling for another 1/2% cut to prime.

(Date source: Bank of Canada)

What great news for the consumers out there!!! This will help the overall rates to start changing out there and we should see rate beginning to come down. The key thing to note is as rate come down...they will also go back up. Here is a a good artcle on the rate drop.

Bank of Canada chops key interest rate to historic low to combat recession
January 20, 2009 - 17:27
By: Julian Beltrame, THE CANADIAN PRESS

The Bank of Canada slashed its key interest rate to the lowest level in history Tuesday, pronouncing the country has fallen into recession and needs help to recover.

The central bank cut the trend-setting overnight rate by one-half point to one per cent - below the previous policy rate low of 1.12 per cent in 1958 - while drastically revising downward its view of economic performance this year.

The decrease was in line with the expectations of economists, who have been calling for bold action by the central bank and the federal government in light of the quick and sharp downturn last fall that followed the disorder on global stock markets.

Shortly after the central bank cut its rate, the big commercial banks reduced their prime lending rates by the same amount. Prime, the benchmark for a wide variety of loans, now stands at three per cent.

There also was mortgage-rate relief, with banks announcing reductions of as much as 1.1 percentage points on selected terms.

Bank of Canada governor Mark Carney made clear that the economy needs all the help it can get.

While he had previously declared publicly that the economy is in recession, on Tuesday he reversed the bank's previous forecast of 0.6 per cent growth for 2009 into a 1.2 per cent retreat.

"The outlook for the global economy has deteriorated since the bank's December interest rate announcement, with the intensifying financial crisis spilling over into real economic activity," Tuesday's statement said.

"Heightened uncertainty is undermining business and household confidence worldwide and further eroding domestic demand."

In Canada, "exports are down sharply and domestic demand is shrinking as a result of declines in real income, household wealth and consumer and business confidence."

As if to confirm this bleak assessment, Statistics Canada reported that manufacturing sales fell 6.4 per cent in November to the lowest level in four years.

Both the Toronto Stock Exchange and the Canadian dollar took it on the chin Tuesday, with the S&P/TSX composite index tumbling 336.55 points to 8,504.93 and the loonie losing 0.81 cent to 78.89 cents US.

The Bank of Canada's relatively rosy medium-term outlook for the economy surprised many private-sector economists.

It forecast that growth will bounce back to a rate of 3.8 per cent in 2010, thanks to aggressive actions of central bankers and governments to inject liquidity and stimulus.

"I think they are overly optimistic on the speed of the rebound," commented Scotia Capital economist Derek Holt.

Global Insight managing director Dale Orr added that the ball is now in the federal government's court, saying next Tuesday's budget should contain significant temporary stimulus.

With the one per cent target for the overnight rate, the Bank of Canada is nearing the end of its ability to affect interest rates by conventional means.

Since December 2007, it has chopped the overnight rate by 3.5 percentage points, as well as injected $35 billion into money markets through asset swaps.

Next up is fiscal stimulus in the budget. Government officials have said Finance Minister Jim Flaherty plans as much as $30 billion - equivalent to two per cent of gross domestic product - in infrastructure spending and tax cuts.

But Carney said the key test remains the availability of credit, and the world economy won't recover until the financial system, rocked by scandal and reckless lending practices, stabilizes.

Although the chartered banks quickly followed Tuesday's rate cut, long-term loans are widely perceived as relatively expensive and difficult to obtain.

In Tuesday's mortgage moves, the Royal Bank of Canada (TSX:RY) slashed its one-, two-and three-year rates by 1.1 percentage point. Its five-year posted rate drops 0.96 point to 5.79 per cent, and there is a five-year closed special offer of 4.49 per cent.

Scotiabank (TSX:BNS) followed with generally less drastic cuts of 0.2 to 0.7 point, with its five-year posted rate down 0.3 point to 6.45 per cent.

Scotia Capital economist Holt is urging the government to help free up lending through a number of measures, including backstopping car leasing and possibly purchasing faltering non-mortgage loans.

But not all agree. "I don't think they go there until the Bank of Canada goes down to zero or near-zero interest rate," said Douglas Porter, deputy chief economist with BMO Capital Markets.

Many economists see the central bank lowering its rate to 0.5 per cent as early as March 3.

One problem Carney won't have to worry about for some time is inflation.

The central bank now expects prices will actually tumble into negative territory for two quarters this year as the contrast between last summer's sky-high gasoline prices and this year's much lower levels pushes the headline inflation rate down.

Economists do not view this as deflation - an alarming condition that plagued Japan in the 1990s - because it is not expected to be prolonged and is concentrated in energy costs.

Overall, the Bank of Canada predicts inflation will average 1.1 per cent this year and won't return to the bank's two per cent target until 2011.

In todays market were all worried about the house prices. The article below from the Vancouver Sun Jan7/09 shows us that even with the downward prices in the market home owners are still ahead with the up swing that we've had in the price of our home and that owning a home is still the best investment out there.

Real estate downturn no big deal for homeowners
Prices may be down this year, but they're up over the past five

Vancouver SunJanuary 7, 2009

Figures released by the Greater Vancouver and Fraser Valley real estate boards on Monday confirm what everyone knows: The housing market is in a slump.

Sales dropped 35 per cent last year to the lowest level since 2000, and the price of a typical home in Metro Vancouver fell by 15 per cent from its peak.

But before you pull out your calculator to figure out how much equity you've lost, reflect on the reasons you bought your home. Did you buy it to flip it and make a big profit in a hot market?

Or did you buy it because it had a fenced yard for the kids, a deck for summer entertaining, large windows that let the sunshine in, beautiful hardwood floors, a gourmet kitchen, the right number of bedrooms for your growing family, a playroom in the basement and a fireplace in the living room?

Perhaps it was closer to schools, transportation and shopping than your previous address, or maybe you were moving from a rented apartment, with all the limitations that implies, to a place you could call your own. You bought because you liked the neighbourhood, the quiet street, the mature trees, the stunning view.

Most buyers purchase a home because they want to live in it. Real estate is not like other investments. Financial assets -- such as stocks, bonds, gold or term deposits -- don't offer shelter, comfort or pride of ownership the way a home does. A home reflects your personality and stores the memories of your life there. Once the mortgage is paid off, you'll never be out in the cold no matter what happens to the market.

Of course, for many a home is their largest asset and that raises some financial concerns. For instance, you don't want to be so highly leveraged that you owe more than the market value of your home. Nor do you want to be forced to sell at a loss.

Unless you are planning to buy or sell now -- or you make your living selling real estate -- market fluctuations are largely irrelevant. And if you are planning to buy, lucky you. Conditions haven't been this favourable on the buy side in a decade.

Since you've got your calculator out anyway, let's put some of the numbers in context.

The benchmark prices of a detached home on the west side of Vancouver dropped 16.6 per cent to -- wait for it -- $1.2 million, or about 20 times Vancouver's median income. The price has soared 64 per cent over the past five years and 22 per cent over the past three. Owners there haven't exactly fallen on hard times.

It's a similar story across the Lower Mainland.

In Richmond, prices are down 4.8 per cent over a year, but up nearly 58 per cent over five; in Port Coquitlam the one-year decline is 4.8 per cent and the five-year gain is 64 per cent; in Maple Ridge the year-over-year drop is 9.7 per cent, the five-year advance is 31 per cent; in Burnaby prices are down 14 per cent for the year, but up 47.5 per cent over five; and in New West the one-year drop is 10.4 per cent, while the five-year gain is 59 per cent.

It is clear that real estate has held up far better than stocks, which have seen price declines of 40 per cent from the peak on average. To be sure, real estate sales are down, listings are up and prices are falling. But the market will recover -- yes, it will -- so owning your own home continues to be a sensible financial goal.

What recent market turbulence has done is make that goal a little easier for many to achieve.