Last month 9,500 Toronto families sold their homes. While that happened 19,000 others decided to bail. Sales fell. Listings exploded.

So now it’s official. In all of the country’s most frothy, gaseous, bubblicious markets – Vancouver, Calgary, Edmonton and the GTA – we have reluctant buyers, startled sellers and shocked media. Sales collapsed by up to a third in May, while across the country tens of thousands of houses a week streamed onto the market.

Will this be the big one?

Yeah, probably. Because with crimson in the water, the media’s decided it’s a story, and industry sycophants are running hard to catch up. My fav quote of the week comes from Phil Soper, head of Royal LePage: “I’m actually glad to see things cool a bit, because it’s gotten to the point where it’s difficult for many buyers,” he told the Globe.

This is the same relentlessly pumping Soper who, on April 8th said, “The first quarter of 2010 continued where 2009 left off, with more Canadians enthusiastically participating in a rejuvenated residential real estate market… Expect house prices to continue to rise, but the rate of appreciation should ebb steadily, month by month, throughout the remainder of the year, as balance returns to the industry.”

Of course, if you were a property virgin 60 days ago looking for guidance from the head of the largest property company, and decided to buy because he said prices would rise all year – just at a slower rate – congratulations. You just learned about ethics.

Fact is, all kinds of industry rodents will be scampering off the HMCS MLS over the coming weeks. This is what happens when bubbles burst. They get all over your shoes and your pants. It’s wicked messy.

Like the Kelowna agent who said: “It’s just like someone turned off the tap. You’d think all the buyers sent each other e-mails agreeing not to buy anything for a little while.”

Or bank economist Benny Tal, who said: “The correction is starting,” suggesting real estate “stagflation” will last until 2015.

Comments like that help lead people around by the nose. They reinforce perceptions. They get the herd prodded and spooked. They hasten the inevitable. They move us a little closer from the second stage to the third, and should send off a clear signal that the impact of this real estate recession could be devastating to middle class wealth.

That’s been the result Stateside. Waves of foreclosures in which dodgy borrowers were quickly wiped out have been replaced by negative equity and strategic defaults. Now more than a quarter of all homeowners are under water – owing more than they own, and through no fault of their own. The market simply tanked so much the value of their homes sank below the amount of their mortgages. So decent, credit-worthy, employed people – millions of them by last count – have made the decision to stop paying. Despite the inevitability of being kicked out after a year or two, they figure this is the sound financial move.

And in Canada?

Across most of the country, that’s no option. Pay the mortgage or you’ll not only lose the house, you’ll also be responsible for the mortgage, plus costs. Cough it up, or bankruptcy remains as the sole route out. It will be interesting to see, in a country where folks like Phil Soper, CMHC and the banks encouraged tens of thousands of people with no money buy homes, how many choose that road.

Of course, this gathering property storm is but the start. Benny Tal might be technically right about it taking five years to correct, but in saying so he ignores the next nuke: those pesky, house-rich, sha-na-na Boomers. By 2015 millions of these geezers will be entering retirement and realizing you can’t sell off a bedroom every time you need cash to live on. Especially in the burbs. When gas is $5 a litre.

Some months ago I said this time would mark a sea change for most of us. The age of the house and the GIC is done. The definition of security’s about to change, plus the meaning of risk. As American families have found, real estate can destroy wealth. As we’re all to learn, money runs out.

Best learn that now.