There are clouds ahead for real estate worldwide, while it remains a mixed bag. As oil prices soften, it appears to most people, the Fed chairman included, that demand is slowing in the world and that oil is simply a gauge of that decline in demand.

So, while there are limited access cities, where tech and growth are strong, and economies that are rising globally, other places are dependent on exports of raw materials. They were high flyers once. They could be the first nations to see real estate price destruction. States in the USA that rely on oil production are likely to see the same unless there is a serious reversal of commodity pricing.

One of the strongest real estate markets in the world is the Australian market. It is a market that is driven by strict land use requirements, and by the export of raw materials to China. As the raw material export business slows down, strict land use keeps prices up. But now there are signs that this market is very dangerously close to implosion.

As Wolf Richter has pointed out, almost 1/2 of the mortgages in Australia are interest only. When they adjust will the occupants be able to pay a higher mortgage? Perhaps this pending real estate doom is why central banks want negative interest rates, in order to protect those with risky mortgages. And don't forget, that protects the bankers, and that is what this is all about.

It is likely that these interest only folks, if they lost their houses, could not afford to rent the very same house. Demand will plummet if these folks walk away and move in with relatives. 

Canada's market is really astonishing. Jesse Colombo says that Canada's housing market is 40 percent overvalued compared to the value of the US market in 2005!Even the IMF is waving warning flags. And Canada could contribute a hit to the US economy if it crashes, since it is the largest trading partner of the USA. Hot money bought Canada's bonds, and could be scared away, causing lending to dry up.