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Bob, your predictions are pretty conservative but the chances of them being somewhat accurate are very high.  I remember last year the prediction was 10%.  Early last year we hit 19% and I told everyone we were going to blow 10% out of the water.  By the end of the year it was just a tad above 10%.

So this year we probaby will go up a tiny bit more this month and then sink back down a bit by the end of the year...maybe be closer to a 3% gain.

Another observation I made yesterday.  I now no longer even really look at the average DOM.  We looked at 18 houses yesterday.  Only two of them had the true DOM.  The rest were re-stated and most of them several times.  The average DOM for those was probably closer to 90 even though they stated 20.

Bob, good call on the variation to the upside, but I suspect that by Dec.31st, it will be more than 5% higher than Jan. 31st, '08.  The S.F. average so far this year has already surpassed 105% of the Jan. 1st price and is currently 6% higher.

So for the average to drop to only 95% of the Jan. 31 price, it would have to drop to $432,000 which is a drop of almost 12% from today's level.

The lowest that the low price of any given year (since 2001) fell below the Jan. 31st price was back in 2003 when it fell by 2.6%, but quickly recovered.

But if there was ever a year when the average price for the year could possibly fall by 5% from the Jan. 31 price, this would be the year.  With all the inventory on the market, it could indeed happen... but somehow I really doubt it.  Good lord, with all this inventory... and the average is still climbing.  How in heck does that work?

I still think it's gonna be a slow summer, but will it be slow enough to cause prices to fall that much... I just don't see it happening.  But future prices could indeed have me with egg all over my face at Christmas time.  That's happened before :-)

If the bubblebloggers see this post, just watch them jump all over me as some sort of a spin doctor who has an agenda. As all of you know, I have no agenda, I just analyze past history and share what I see.

Happy Mothers Day to all the great moms out there!

Bob,

I think you will be in the ball park.  The inventory is a pretty large and I see it climbing even higher. There has not been a sign that it will ease in its climb yet.  But eventually it will get eaten up.  People are not leaving like last year.  Saskatoon has higher house prices than Edmonton with a lower wage.  So the Saskatchewan advantage is over.  Manitoba is a cesspool, well not that bad!  Anyways, Alberta is the place to be.  

Al,

I believe a bit of correction may happen in Calgary but nothing major, because of the resources.

One thing I would like to mention where the bubblebloggers may be right( small,small chance) in predicting a RE crash.  It may happen, but it would probably pertain to an economic catastrophy that would involve everything from RE, oil, gas, food and all markets.  Maybe they want that.  It would give them an excuse to get out of their parents basements and see some sunlight, maybe meet a girl!  A real one!  Just jokes!

Have a good day

i sense some pesimism with you guys with this new post. it must be all those houses for sale and not many buyers. inventory keeps climbing with no end in sight. since the spring rush didn't pan out, summer is will not be any better. the selling rush that usually takes place has passed this year. iam on the side of the -5% decline, at a minimum due to no positive news happening now. I don't think any one can give me an actual reason why the inventory will magically disappear. it is simple , sales are slumping, inventory is high. do the math.

realistic; I don't think it's pessimism so much as realism. I never expected prices would go this high this year in the first place with all the inventory. It stands to reason that we should see a decrease in prices(which I've been saying all year and it hasn't happened yet). Just being "realistic."!!

Bob,

On your daily stats you have last years comparables on each section except 'Inventory'. Would you mind adding that so as we can see the year over year diffence?

Thanks

Deb; Is this the page you are referring to? SFH Monthly Summaries  

-Bob

The answers as to why the house prices are staying put or slightly going up is because of the sales mix. The stats are right in front of your noses and you fail to acknowledge that aspect.

Average size of houses sold is going up - this translates into buyers who are already in the market looking to move up into larger homes (upgrading).

Free Speech; Maybe you can tell us why the average price went up in March by $3,000, yet the average size of homes went down from 1583 sf to to 1542 sf? What does that translate into? -Bob

Any realtors out there want to talk about the state of the Condo market? ;)

Bob,

I believe what FreeSpeech is alluding to is correct regarding sales mix. If you look at the MEDIAN price comparison from Feb to March as you have been looking at, median price went down $8000 as the average sq ft decreased.

Democracy; Let's compare apples with apples. The median SP/SF went up to 289 from 286 in March, yet the median price, as you pointed out, dropped.

So far in May, the median price has risen, yet the median SP/SF has dropped(as has the average SP/SF).

From this, you can see there is no direct relationship. -Bob

Hi Bob,

I have a question regarding the sold price comparing to listing price. What is the reduction average and percentage between listing price and sold price. On Mike daily stats, it stated that Highest Sold UNDER LP % for May 11 is 6%. Does this mean if the listing price is 100K, the sold price is 94K?

Thanks for your help!

Tyler; Yes, that would be correct. The database doesn't allow us to do "average price reduction." It could be done manually, but that would be incredibly time-consuming. -Bob

I have to say even though we gave up on buying here . I still have 2 cents to say I think things will come down a bit . But a crash NO WAY so Plus or Minus of 5% at the end of the year seems right to me.

Question for Bob, is it better to have a realtor make a offer on a house for you or just use the one the buyers are using to sell the house?

OneofAKind; Do you mean use the seller's realtor? -Bob

one of a kind, i will try to give you my two cents from a non-realtor perspective.  Some people argue if you use the seller's realtor you may get a biased effort as they will try to make that sale regardless (although by realtor code they must work in your interest).  So your disadvantage by not getting your own realtor is you might not get someone who will do diligent work and give you honest answers when there might be very obvious reasons why you shouldn't buy that house or reasons why that house might be overpriced.  Good realtors should be able to spot issues like that.  Now of course you can get bad realtors who are supposed to help you and screw you anyways but I think there are enough good realtors out there that won't do this.  

The advantage of using the sellor's realtor is since they will not have to split their commission with another realtor they will sometimes be willing to cut 7-10 of their own commission to make the sale happen.

I personally am using my own realtor as he is really good and has pointed out several things which I would have missed.

i would rather pay the few extra thousand then buying a house that i shouldn't have and regretting it later.

If I didn't already have a realtor I would most definitely give Bob a call.  He seems quite down to earth and sounds like he'd rather give you the honest opinions about a place rather than making a sale just to collect commissions...just as he mentioned he avoids even listing houses where the owners refuse to believe the markets are no longer in 2006-2007 prices and those owners won't list realistically.  This is just my take on it.

Bob,

We have empirical evidence that you were Pierre who authored the pricedoutinedmonton.blogspot.com.

When will you admit to it?

Or do we have to publish the evidence on the internet for all to see?

The choice is yours

I think you will be right Bob, at the low end of your scale.  I cant imagine further price increases this year, although I said that last year, and I was wrong.  But this year, the signs certainly are stronger that prices will not be sustained.

I guess the only way they could be sustainable at current inventory was if current inventory was actually appropriate for a balanced market of a million people.  But perhaps despite the balanced market we are in, people are just spooked by current year numbers in comparison to the previous two years of unusual activity so its causing artificial delays in purchasing.  If 10k listings in spring time is where we should be... then maybe thats what our "new balanced market" equates to and prices will sustain themselves.

Im still betting that Bob's low end of -5% on Jan numbers will be where we are on Dec 31 though, but that's just me.

Bob,

I'd like to ask you this :

For example on Mike's condo stats on Monday(May 12)there are Total sold : 18 condos and Total Pending Sales: 181 condos.

So when buyer puts an offer on condo does it counts

under total sold or under total pending sales during that day ?

Tim; If the offer is accepted, and there are conditions attached, it will be considered pending. If there were no conditions, it would be a sale. -Bob

The guy posting above as "Democracy" is really the "d3 facto" dude from the bubble blog. He said that Bob didn't post his comment.

He's another one of those "instant gratification" junkies. He doesn't see his comment within 3 seconds, he thinks it didn't get posted.

Bob, I liked your answer to his question. The facts are "right in front of his nose." Sheesh, Democracy, get with the program.

Chopper; I imagine "Free Speech" is the same guy as Democracy. I wonder if he'll mention that I posted the reply to his question.  Not likely. Free Speech only goes so far when the facts disagree with your agenda. -Bob

Bob, your weekly stats show some amazing price gains. Sfh average at $492,724?!! The median at $432,000?!! Even the condo prices were up big-time.

The great unwinding is unwinding!!

Bob,

I'd like to know your opinion on my 2 questions :

Thanks.

1) My friend is thinking to not put his house on the market now. He wants to wait 2 years and then to put the house on the market. Do you think Bob that after 2 years new homes will be more expensive than now ?

Or do we always need to do market comparison with those homes from one year before ??

2)For example, my another friend sold his house one year before and now his neighbour in that same community with the same identical new house is selling

with the same price as my friend did a year ago ??

Is it going to be this always to compare houses with one a year ago ? But builders don't care they charge more every year, do buyers know this ?

Ben; It's difficult to predict what will happen next month, let alone 2 years. I expect that the inventory will be much lower in 2 years, consequently there will be less choice. I've been predicting price decreases this year but it hasn't happened. I don't know what will happen 2 years from now. -Bob

I am just putting myself on the record to see how I will fair. My prediction in the last discussion topic was that the lowest point we'd see in the Calgary market before the prices started going up again would be about 15% below the 2007 price peak - that puts my prediction for the lowest point at $430,032 average price for single family homes. That's very close to Bob's prediction for the lowest average price we may see by the end of this year.  Since my vague thinking was that we'd probably see this lowest point in the market some time this Fall, I guess my prediction turns out to be about the same as Bob's. It will be interesting to see what actually happens. One thing I wonder about is in what way the US real estate market meltdown will affect the Calgary market if at all. By and large I would expect a rebound in the US to be a good thing for Calgary real estate prices, but maybe it would turn out differently, with rising US prices causing people to start buying more in the US at the expense of Calgary. Anyway, I suspect that there are so many variables involved that there is a lot of luck involved in getting it right.

Hi Bob,

I want to ask you this :

My friend is planning to sell his house in West Park

area(West Springs).

Is it better for him to sell now or to wait until the West Park area is finished ?

Thanks Bob.

Prize for the most uselessly obvious sentence of the day goes to...the Calgary Herald!!

"For the most part, experts in the industry say that once the existing inventory is gone, the market will return to more "normal" conditions..."

Again, for anyone following the situation in the U.S. - every "expert" down there will tell you the same thing.  This is almost a John Maddenism - "Chicago would have won the game if they had just scored more touchdowns!"  Really, wow - insightful!  Why don't you try and explain to me what's going to move these homes?  Extra scented candles at open houses??

Anyways, don't look now, but it's another record high for inventory today - 10,440 now and counting.  I think any hopes of this inventory crisis clearing up in the next 12 months are woefully naive.  24 might be more realistic, but it's way too soon to tell (since we haven't even peaked yet).  Gee, I wonder what will happen over the next 24 months as this record inventory sits and sits...

I honestly don't even know what to make of most of the posters on this board anymore.  I really can't accept that people like "Does this look like a crash?" can be that naive.  It reminds me of war generals in the final days of a battle strategizing and moving pieces around on maps while out on the front lines their troops are getting wiped out.  Do any of these people know someone who's trying to sell?  

So the "average" and "median" prices are supposedly up, up, up?  Please find me one actual home or condo this would apply to??  Please???  Because around 90% of the ones that I've been watching have had at least one price reduction so far.  Probably 1/3 have had two reductions.  One house I'm watching was just reduced a second time, and is now $60,000 below the initial price (12%).  Prices in some of the neighborhoods I'm watching are back to where they were last fall.  Luckily though, it's the "spring busy season", lol.

Even looking at the stats, I can't find anything bullish about them.  Year over year all prices are down - SFH average, SFH median, Condo average, and Condo median.  

Month over month, sales are way, way down - especially condos this month.  Price per square foot is down across the board.  As of the 12th, Bob's sales at or above list price is the lowest it's been for condos since he started tracking the stats.  Ditto for the sales to new listings ratio.

The only things that seem to be up are the inventory (record high) and the DOM (which as Vinny pointed out, is the most unreliable stat available).  But for what it's worth, condo DOM is now at 51.  There are currently almost 7 months of condo inventory.  As FreeSpeech asked, would anyone like to talk about the condo market, lol??  Seriously, would Chopper or any other of these "real estate only goes up" people like to try and form a coherent argument as to why it is a good time to buy a condo instead of waiting???  Anyone??  Didn't think so...

"Even looking at the stats, I can't find anything bullish about them."

Moreover, this no longer looking like it is strictly an Alberta problem.  Look at what has happened in the last 15 days in Vancouver.  Sales have fallen off a cliff and inventory has spiked up.  According to Paul Boenisch's stats, sales are down 28% yoy in May and inventory is up 51%.  Over the last two weeks day over day inventory increases in greater van have been alarming.  there  have been over 1000 (net) units go on the market in the last week alone.  

What we are seeing is exactly the same as what happened in the US.  Remember, there was no subprime problem in the US until house prices began to fall.  There were no problems with the HELOCs in the US before house prices began to fall.  There was no foreclosure problem before house prices began to fall.  And there was no recession before house prices began to fall.  Prices led them all. And what led prices were increases in inventory and decreases in sales.  

You can argue back and forth that the outcome is going to be different here, and until it plays out no one will no for sure.  What you can't argue is that so far Canada is following the playbook of the US step for step.  Its just with an 18 month lag.

Hey Warren,

I agree with a lot of what you've said.  Especially the comment about useless, obvious statements we hear daily on the news and in the Herald.  Some of them are so bizzare I just gotta shake my head.

"This is almost a John Maddenism - "Chicago would have won the game if they had just scored more touchdowns!"  Really, wow - insightful!"

Now that statement really made me laugh, because it's so true... that we're hearing Maddenisms every day now.

You made reference to the fact that all the averages are down yr/yr, and you're dead right.  But it truly is nowhere near a crash.  Average S.F. price is down yoy by 1.61% as of today.  Average condo price is down yoy by 4.61% as of today (using the latest stats I can find).

But true enough... down is down.  But a crash?  Hardly!

About the record level of inventory.  Historically the level of inventory has peaked at the end of May or June, so it will be interesting to see if that's the case again this year.  I was intrigued by a comment made by a local realtor who is aware of many people who have two residences and have listed them both, planning to live in either one of them, once the other sells.  I wonder how many cases are like that, because that would skew the number of listings upward. I'm not grasping at straws here... its just that this situation would be very relevant if it was a high number.

About price reductions.  I have to chuckle at that statistic because it too is totally irrelevant... as shown by the fact that prices are not anywhere near crashing.  What's happening is that so many people out there still think they can get a king's ransom for a very average house.  So they price it $75,000 too high only to find they can't sell it at that price.  So WHAM, they cut their asking price back to a realistic level and BAM, it sells for 1.61% less than they could have gotten one year ago.  It's as simple as that.  I pay no attention to price reduction stats because that stat is as irrelevant as DOM stats.  The average price stat is what paints the picture of reality.

No doubt about it, this level of inventory is the most profound statistic out there, but likely it will peak for the year within the next 6 weeks or so (if history repeats itself... although it may not).  Its also interesting, but not surprising, that we may see another influx of people moving here from Ontario.  That is not an insignificant issue.

I don't think this inventory is gonna "sit and sit". According to so many realtors (in both Calgary and Edmonton) right now there are tons of buyers who are fully capable of buying.  And they WILL purchase if they get even a sniff of prices beginning to rise again.  But I don't see that happening much until the fall.

You're absolutely right, the stats don't look bullish right now, but it's certainly far from a crash.  The fundamentals for Alberta are just so incredibly positive that I just can't see the situation deteriorating much from here. We're surely in a standoff between the buyers and sellers, and I suspect it's gonna be the buyers who will have to make the move.

Liverless, I don't agree with you when you say: " Remember, there was no subprime problem in the US until house prices began to fall." That's not correct, it was the fact that those insane sub-prime mortgages in the US had to be re-set and at a higher rate.  And when they did re-set... bingo, the homeowner couldn't afford the mortgage any more.  That's what set off the price reductions... people who were happy yesterday, suddenly couldn't afford their home today.  And from there it just snowballed, and in very short order.  It was the sub-prime mortgages (those things were truly insane) that set that bomb off.  It was the re-setting that lead to all the other issues you mentioned... lower prices were a result of re-setting at a higher rate, foreclosures were a result of re-setting at a higher rate and recession in the home building was a result of no more buyers.  Once that snowball started rolling... well we all know what happened... and is still happening.  It was all set off by those crazy sub-prime mortgages.

And we simply don't have those in Canada.

Al Bundy,

good post, I have also know there are people with both homes for sale but I suspect this is a small number.  I believe there will be another wave of people coming here from Eastern Canada with their economy in recession and the labor shortage here.  

I just wanted to touch on a couple of points.  

Subprime is here and has been here for a few years.  I don't have the link but the States had 25% and we had 5% in 2007. So it is here but the difference is that lending practices were pretty lax in the states compared to here.  If there is crash here (which I doubt)it won't be because of subprime.

I am concerned that there are so many houses and condos for sale (over 15,000 )

Eddie; In the city of Calgary, there are 10,424 active listings including condos and single family homes. The link you've attached includes a number of surrounding towns and cities  such as Red Deer, Drumheller, Taber and Banff. Not exactly comparable to Calgary, and not comparable to any historical figures that we've ever used. To avoid confusion, I have deleted it. That being said, yes, I agree, there's lots of inventory even without those outlying cities and towns.  -Bob

and with tonnes more coming on the market.  I know that Phoenix is considered a sister city to Calgary and we are closely approaching numbers per capita to them.  And we all know what is happening down there.  I know that subprime is the big issue there, but speculation and overbuilding played a huge role there as well, and  I hate to say it I believe we are starting to see some cracks here as well in speculation and overbuilding. I know that the speculators are not getting into the market now and I see that new starts will ease, but I do wonder if there is too much out there.  Only time will tell.

I entirely agree with liverless regarding the statement "there was no subprime problem in the US until house prices began to fall."  The key issue is that as long as house prices go up, (and house prices have gone up dramatically) people have other financing options available to them or they have the ability to sell and therefore foreclosures and mortgage arrears are small during the upward cycle in real estate.

http://calgaryrealestatemarketblog.wordpress.com/2008/05/15/credit-junky-nightmare-credit-cycles-effect-on-housing-market-part-3-of-3/

Similar analysis has been done for the Vancouver real estate cycles.  

Also, regarding Canadian subprime, As an example, Xceed’s (Canadian subprime lender) funded mortgages have plummeted from $340.0 million to $65.7 million.  This one lender has resulted in a quarter billion less financing for real estate in Canada over the same reporting period last year.

Bob,

sorry I didn't look at that link correctly.

Thanks.

Radley77 that is a very attractive chart you put up.  It clearly shows that currently we are seeing less than 0.2% of Alberta mortgages are in arrears.  That's 2 families out of every 1000.

Where is this subprime dilemma you're talking about?

C'mon, when lenders in the US were willing to advance mortgages worth 120% of the sale price on a house, and didn't demand proof of income... what did they think was going to happen?  What were they thinking?

I'm standing my ground on this one.  There is no subprime lending in Canada even remotely similar to that in the USA.  Not even close!

Al:

Thanks for the comments, I appreciate your feedback.  You wrote:

"You made reference to the fact that all the averages are down yr/yr, and you're dead right.  But it truly is nowhere near a crash."

I agree with you 100%.  I have (as far as I know) never said that Calgary RE was going to "crash".  I have said it will "correct" and prices will come down.  It will never go back to what is was in 2002 or 2003, but it will also not hold at where it is now (which is still well below it's peak last summer).

Like for example, how the median (which, remember, is what the CREB now says we should focus on) price for a condo is currently down 6.98% year over year.  That's not accounting for inflation either.  And the trend is clearly further down (since it's down year over year, month over month, sales are 50% of last year, and inventory is over 7 months worth).  I would agree that 1.61% would not be that big of a deal...if this was the worst of it.

Your explanation of people owning two residences and having them both listed is very well worded, and I will agree, something that is playing a factor in the record inventory.  But it's just so small that it's irrelevant.  As of today there are 10,424 homes for sale.  If we were to assume that every single last one of the vacant/new construction listings are a "second home" (which would mean there is zero spec activity in the Calgary RE market, which is very, very false), and remove them all - there would still be 7,445 homes on the market.  And there would still be about 4 months of inventory, putting us into a buyer's market (by the CREB's own ever changing market "definitions").

I don't think people are really grasping the size of the inventory.  There is roughly 4 times the inventory there was in January 2007.  Assuming condos have followed a similar trend as SFH (since Bob's condo stats only go back to July 2006), there is almost 7 times the inventory as in January 2006. Seven times is a huge increase in less than two and a half years.

You also wrote:

"I don't think this inventory is gonna "sit and sit". According to so many realtors (in both Calgary and Edmonton) right now there are tons of buyers who are fully capable of buying.  And they WILL purchase if they get even a sniff of prices beginning to rise again."

First, there is nearly six months of inventory on the market.  By definition, that means that a lot of houses are going to be sitting and sitting (ones that are not priced aggressively).  Secondly, we've all been hearing about these mystery buyers just waiting to pounce now for almost six months.  It's getting old.  Thirdly, if you think the average price stat is what paints the picture of reality - then Condo prices are up 4.1% since January 1 and SFH prices are up 8.0% since January 1.  I again ask anyone to find me an actual house or condo that reflects this, but that is what the numbers show.  So even though prices are "rising", there are still half the sales of last year.  Maybe buyers aren't falling for the "Buy now or be priced out forever!" ridiculousness anymore?

As for the subprime issue, I think that a $0 down, 100% financing, 40 year mortgage from a Canadian bank is pretty crazy - but that's just me.  But Radley77's first paragraph and liverless's second paragraph state much better than I can that home price declines preceeded subprime foreclosures in the States.  Subprime mortgages are getting an unfair share of the blame for the U.S. housing implosion.  Subprime mortgages aren't causing foreclosures, falling house values are causing foreclosures.  One study found that subprime borrowers are 14 times more likely to go into foreclosure if their house has declined in value as opposed to increased.

http://money.howstuffworks.com/number-one-reason-for-foreclosure1.htm

It's because they don't have anything vested in the property and are first to become upside down on the mortgage (much like someone who took out a $0 down, 100% financing, 40 year Canadian mortgage).  It wasn't the subprime issue, it was the unaffordability of homes and the eventual running out of greater fools that started the ball rolling in the States.

I feel like I just need to clarify my views yet again.  I don't predict a crash, I predict a correction.  Yes, this excess inventory will be eaten up eventually, most likely by fewer starts which means that condos are going to get a LOT worse before they get better.  This may take months, or it may take years.  In the meantime however, while inventory is this unheard of high, it is a strong buyer's market and prices will continue to fall (as individuals place their own needs ahead of the selling community's and slash their own prices to differenciate themselves from the other 10,423 listings).  Yes, home ownership for most people is a good decision.  But it is not always a good decision and there are good times to buy and bad times to buy.  At the start of the bubble it was the former.  Now, it is strongly the latter.  Why should I buy something now that I can get for $20,000 less in three months???  In the standoff between buyers and sellers, the buyers are holding waaaaaaaaaaaay more power than the sellers.

Bob:

I am not trying to sound catastrophic (remember, I am planning on buying myself - it's not all doom and gloom).  You wrote:

"I've just had a week where three of my listings sold, only one of them had a price reduction from the original list price, and the average DOM was 46(no re-lists)."

I saw that your West Springs was conditionally sold on your site (congrats).  I would assume that you are one of the top realtors in the city.  As you state, there are 5,400 realtors in the city.  If they all sold 3 homes a week, we would have around 65,000 sales a month - not less than 2,000.  On average actually, each realtor in Calgary has sold only 1.5 homes so far this entire year.  So you have sold double the homes in a week than the average realtor has done in four and a half months.

So just like some high end homes skew the prices when sales are so crazy low - some high end realtors might have a different perspective on the health of the market than their colleagues do.

Subprime is not problematic until house prices are falling.  This is because as house prices increase, people that cannot afford their property can either a) refinance or b) sell.  When house prices are falling or flat, people lack these options and that is what causes the rising defaults.

We are in a situation where we have record inventory, and mortgage arrears are at a cyclical low.  One would expect that mortgage arrears start increasing as we have the poorest affordability for housing since the previous real estate peak in 1990.

I would expect at the very least for mortgage arrears to start trending upwards to the cyclical averages.  But if a lid is not put on the inventory problem, and price declines perpetuate I would expect that mortgage arrears climb substantially higher than cyclical averages.

Also, Al, I can give you an example of a colleague that has 8 properties funded through subprime loans at Xceed, and is now having troubles finding funding now that some are coming up for renewal.

So, do we have subprime?... some.  As someone mentioned, 5% of loans are subprime in Canada vs. 20% in the United States.

Also, the 'hidden risk' to the real estate market from subprime lending in Canada is that it is getting much more difficult times to find investment capital to back the mortagages.  As less people are willing to put up investment capital for mortgage backed securites, there will be less demand for real estate.  If demand shifts too quickly, this will create an inventory problem due to the difference in expected and real demand.

The drop in subprime lending in Canada that has occurred over the last year helps to explain why sales volumes are down year over year.

Recent statistics Canada data has said that home ownership rates are the highest on record since information was first collected in 1961.  2006 census data puts home ownership in Alberta at 73.1%.  As ownership rates are so high, this would indicate that there is a small pool of buyer's waiting on the sidelines to buy.

Also, recent Statscan data has reported that there has been NEGATIVE interprovincial migration to Alberta.

So, Al, I am unclear of where your "ton of buyers" is going to come from?

The gloom and doom prognostications predicting a correction as in the U.S. will not come into fruition as long as oil is over 100 USD.

For many, 450K for a 1500 sq ft house is indeed a lot of money. However, there are many jobs in Ft Mc where 22 year old kids clear 10K a month after taxes. There are many buyers in this market, they're just waiting for the right moment.

Also, as far as the "crash" in the US. Keep in mind that these prices are correcting from 400% gains. A 220K house bought in 2001 in southern cal. was selling for  750K 4 years later. That 750K house is now 500K.

Crashing? maybe for the flipper who got caught buying it last. However for the original homeowner, it's still a 100% gain.

In Calgary, I don't expect a return to early 2006 prices. Downtown  Condos that flippers are trying to sell for 450K now were purchased in 2006 for 220K. No crash there, just pure greed. They could be flipping these for 350K and still make 5x their deposit and down payment.

Calgary house prices are Not "crashing" at all. They're stabilizing at a high plateau. I'd begin to worry if price of crude oil start going lower.

Eddie, thanks for that link.  True, it wasn't fine tuned enough to be used here in our discussions but I found it to be an interesting search engine none-the-less. I saved it!

Radley and Warren, both of you put forward some very good points for discussion and I truly enjoy reading them, especially when they are so well written and clear. The discussion about what caused the sub-prime mess is more or less a discussion about which came first, the chicken or the egg. In reality it's a combination of things that are all rolled up into the same nasty ball.

Unfortunately, none of us has a crystal ball. I look at things from a historical perspective to see where I can identify repeatable patterns. I fully realize that the future can be very different, but usually it is very similar to the past. And you guys look at some very real fundamental stuff that can't be ignored.

I admit, this year is one of the wackiest to predict, what with all this inventory. You could well be right when you suggest that it might take over a year to absorb this inventory. I think it will be sooner than that, but these are only opinions, nothing to get all ramped up about.

And yes, you're right again when you say that it's getting a little more difficult to find funds to back a mortgage these days in Canada.  I found that out from personal experience this week. But that's also a good thing.  At least the lenders aren't going to contribute much more to creating nonsense mortgages.

To be honest, I'd forgotten that zero downs were available in Canada to qualified buyers. I'd suspect most of those were locked in for a 5 year term, so those buyers should be OK until their mortgage comes up for renewal. If I'm not mistaken, ARMS were a real monster for contributing to the mess south of the border.  My daughter bought a condo back in '06 and her banker was advising an ARM. I quickly introduced her to a mortgage broker with strict advice that an ARM was out of the question. Fortunately, they came up with an excellent mortgage locked in for 5 years.  Why not?  Mortgage rates are near historic lows.  Why consider an ARM?

Anyway, I'm gonna rush out now and have breaky with my daughter, then buy her a better cellphone for her birthday, then just enjoy the 33 degree day we're gonna have today.

I hope you all have a great and safe long weekend.

When I die, I want to go peacefully like my 86 year old Grandfather did, in his sleep -- not screaming, like the passengers in his car.

Radley77, there is a good possibility that many of these buyers will be coming from Ontario as per the article Bob posted on his "What's New" page. StatsCan's report that there has been a negative (slight) migration to Alberta talks about the recent past.  It doesn't mention the liklihood that that situation is short lived. Also, it appears that no matter which realtor you talk to, they all say that the buyers are right here in our midst, just waiting.

I think it's great that so many Canadians are home owners. That's a pretty healthy state of affairs for a nation.  But each and every one of those homeowners is also a potential buyer. If they want to move up, they move up. If they're tired of mowing their lawn, they buy a condo. It's these very homeowners who represent the majority of buyers.  Not all buyers are first time buyers.

So I think the buyers will be coming from our own midst, both first time buyers and repeat buyers, and from net migration.  Alberta is going to continue to grow, it's certainly not going to shrink with all the activity going on now and with so much planned for the immediate future.

Frank, below is a graph of US housing markets to the Calgary market:

http://calgaryrealestatemarketblog.wordpress.com/2008/02/27/a-comparison-of-calgary-house-prices-to-the-us-real-estate-market/

It shows that Calgary markets have risen by more than most American cities except for two since 2000...

Not a 400% gain as you had mentioned.

Frank:

I don't doubt that there are some people in Fort Mac like you describe.  However the actual numbers show how insignificant their size is:

http://www40.statcan.ca/l01/cst01/famil105j.htm

Income levels for Albertans.  As you can see (as of the 2005 tax year), there were only 151,580 out of 2,421,530 Albertans who made over $100,000.  That's just 6.26%.  You talk of making $120k after tax, which would be a gross of nearly $200k.  That's just 32,420 people, or a whopping 1.3% of Alberta.  You can't run a housing market on 1% of the population.  The simple fact is that the average home is unaffordable to the average family.

As for the many buyers "just waiting for the right moment" - it's getting really old now.  Six months we've been hearing this.  Maybe someone could give me a date when all these buyers are going to appear?  I wouldn't want to miss it!

The U.S. fortunately has a much, much, much more accurate index for home prices than we do - the Case/Shiller Index.  Here's info on it for anyone who is unfamiliar with it:

http://www2.standardandpoors.com/spf/pdf/index/SPCS_MetroArea_HomePrices_Methodology.pdf

And here is the most recent data (as of February 2008):

http://www2.standardandpoors.com/spf/pdf/index/CS_HomePrice_History_042952.xls

You wrote:

"A 220K house bought in 2001 in southern cal. was selling for  750K 4 years later. That 750K house is now 500K."

No it wasn't.  And no, it isn't.

Since you chose Southern California, here is a favorite blog of mine that follows the SoCal situation very closely.

http://themessthatgreenspanmade.blogspot.com/2008/04/back-to-2004-home-prices-in-southern.html#links

And an excellent chart of the Case-Shiller since 2000:

http://themessthatgreenspanmade.blogspot.com/2008/04/cant-keep-home-prices-from-falling.html#links

As you can see, SoCal (using L.A. as a benchmark) prices did not experience 400% gains.  At the peak of the bubble, they had went up about 2.75 times over seven years.  They're now back to where they were in April 2005 (non-inflation adjusted).  San Diego prices are back to where they were at the end of 2003 (?!?!).  And of course, the situation is not getting any better any time soon.

So with your number ($220,000 in 2001), that house would have peaked at around $550,000 in late 2006.  It would currently be going for around $425,000.

P.S. Another day, another record high for Calgary listings - 10,500 on the nose.  Buy quick, we're running out of homes!  Methinks that listings have to stabilize long before prices will...

For all those waiting for the province of Ontario to move here for jobs and eat up all Calgary's inventory - an excerpt from this week's BMO research newsletter:

"While the pundits are busily burying the Ontario economy, someone forgot to tell residents of the province to pack it in. Job growth in Ontario has perked up to 2.2% in the past 12 months, above the national average and one of the strongest performances of the past four years. Meantime, the

unemployment rate has actually dropped 0.3 percentage points over the past year to 6.3%. No doubt manufacturing is struggling heavily, but Ontario’s strong tech sector, stable financial services, robust construction activity, and thriving public sector are all providing important offsets."

see full report here:

http://www.bmonesbittburns.com/economics/focus/20080516/focus.pdf

Rad77, your graphs are excellent and your analysis is deep and well-researched. But the predictions you've made, based on them, really suck.

For example, back in December you said "It will be very scary for sellers to wait for two months only to see the price drop $40,000."

Since then, the average price is UP exactly $40,000. Median price is UP $13,000. price/sf  is UP 8%. Do you still stand by your prediction that prices will drop by $100,000 this year?

If you got it so wrong, where does that leave us? My point is, all the data and experts are notoriously bad at predicting the Calgary market. You might as well throw darts with a blindfold on.

Warren said:

As for the many buyers "just waiting for the right moment" - it's getting really old now.  Six months we've been hearing this.  Maybe someone could give me a date when all these buyers are going to appear?

Warren, that's so true. Just like I'm getting tired of hearing "the crash is coming." Back in December, you'd think from all the "crash talk" that prices were going to collapse within 3 months.

Bob, I think it's time for you to do a topic on "What Were They Saying Last Year?"

So I remember several people saying that even though the average price is holding (actually climbing a bit lately) they haven't seen this reflected from the houses they have been looking it.  This article might somewhat answer that question.  http://calsun.canoe.ca/Business/2008/05/17/5596416-sun.html

In short, it basically says with all the brand new built houses hitting the market those are selling for a higher price and the previously lived in homes are somewhat less attractive....at least that's how I interpret it.

This article seems to really make sense.  There are a few other good points which seems to be why so many people think prices are dropping and so many think it's not and both groups are right in some way.

Vinny; That's about the best summary of the situation that I've seen. I'd say it's very accurate. I encounter those situations and circumstances all the time. Thanks for sending that in. -Bob

Chopper wrote:

Bob, I think it's time for you to do a topic on "What Were They Saying Last Year?"

That's funny, I was actually thinking the same thing today, lol.  So I checked out the stats from Mike's site and saw the $655,568 SFH average price for yesterday.  I then remembered something I posted earlier and went searching for it.  On March 16, talking about the changing sales mix this year skewing prices, I wrote:

"I'm waiting for the day when there are, like, ten SFH sales and the average is $600,000+"

Lol, eerie!  So, it was actually 22 sales yesterday, not 10 (but when I wrote the post, I was expecting a $1m or $2m dollar sale, not a $4,812,000 sale).

That one sale changed yesterday's SFH average by over $200,000!  It changed the month's SFH average by over $5,000!!  Does anyone actually still believe that the numbers aren't being skewed by high end home sales??  Seriously?  Bob's own stats show that we had 35% more sales over $1m in April 2008 than in April 2007 (even though all sales were down 34%).  If you have them, what is the total so far this month for sales above $1m Bob?(See my answer to Vinny, the next comment. You both asked the same question -Bob)

To be honest though, all this talk about what percentage of sales are above or below a certain number is bad statistics.  If we're talking average prices, it isn't the number of sales above a certain level that matters, it's the dollar value of those sales.

Looking back at some of the older postings, there seems to have been a big shift in the tone of the blog.  It used to be much more macro-orientated and talking about the health of the Alberta economy (as reasons for why prices would go up or down).  Lately it seems to be much more micro-orientated and talking about the local situation.  I know personally, with the rebound (and then some) in gas prices this year, I have put any large worries about the Albertan economy out of my mind.  I'm not saying it's going to be all smooth sailing, but I'm a lot more optimistic than I was a year ago.

I've also gotten more pessimistic on the housing market.  The two aren't tied at the hip.  Reading posts from last year, it was kind of cute to see people talking about how outrageous 5,000 SFH on the market was.  Or how unbelievable it was when the "old criteria" listings broke through 10,000.  I just don't see how anything can stabilize until inventory does.

Anyways, I think we would be each be posting some very different comments if we were to dig through the archives.  A lot of bears were wrong about what the posted average and median prices would do this spring.  A lot of bulls were wrong about sales and inventory levels in the spring.  

Chopper wrote:

"Back in December, you'd think from all the "crash talk" that prices were going to collapse within 3 months."

I agree, there were (and still are) some people calling for extremes that likely won't happen.  But some other posters and I all more or less agreed that prices would likely not fall very much in the spring.  Psychology is a HUGE part of real estate and there is just too pervasive of an idea that "Real estate goes up in the spring".  Al's comment on people listing ridiculously high and now having to reduce their price is a good example of this.  Where our observations differ though is that Al sees these homes selling with a reduced price, whereas everywhere I look I see homes continuing to sit with reduced prices.  

But as for the runup in prices - I have always agreed with the CREB that the median is a better reflection than the average (I have disagreed with their seemingly random change in focus).  Although judging by the most recent Sun article "Housing market hasn't fallen into basement", the CREB is really pushing their snazzy new "Year to Date" price, lol.  Very clever...

On Feb 3 in "What's New" I said, "That's why I believe we'll be seeing a lot more year-to-date comparisons from CREB and realtors." -Bob

So if we look at the median prices, they've been falling (or at best holding steady) since February.  The condo median is 7.14% lower than last year.  The SFH median is 3.45% lower than last year.  Tack on inflation and both are down over 10%.  That's a pretty sizable drop to me, what are your thoughts Chopper?

I can't help but think about Heather's situation - she bought her condo last fall at the end of September.  It's a shame she didn't wait like a lot of people were recommending - she (according to the median numbers) could have saved almost $15,000 in 8 months.  With seven months of condo inventory, who knows how much her savings could have been in another couple months?

So now that the "busy spring season" is more or less officially over, it will be interesting to see what happens to prices.  Last year the SFH average fell $60,000 peak to trough, the median fell $32,000 peak to trough.  The condo average fell $27,500, the median fell $24,000.  SFH inventory peaked in September, Condo inventory peaked in October.  As of halfway through May we have 128% of the 2007 SFH peak inventory and 145% of the 2007 Condo peak inventory.  If medians this year did peak in February as it's starting to look like, and we have the same drops as we did last year (when there was much less inventory), that could mean a SFH median of $396,000 and a Condo median of $271,000 by the end of the year (very close to where we were at the end of summer 2006).  I'm not predicting, I'm just observing historics here.

How high will inventory get this year and what effect will that have on prices, especially with sales being consistently 1/3 lower (or more)?  Heather often spoke of the "impatient generation" who expect everything now.  I think many of the bulls should be a little more patient before proclaiming how wrong people have been to call for prices to fall.  Housing is a big ship to change directions in - so let's just wait and see how it plays out with the inventory and sales being where they are now that we're out of the "busy" season.

Bob, I remember a few weeks back there was a really big sale pending.  Today a 4.8million one went thru. Was that the one or did that happen to be a different one?  On we on pace for a normal 1mill+ or are there more than usual this month?

Vinny; That was a different one. The pending date on the $7.995 million listing is far into the future. If it goes through, It will affect the average price in July or August. There is another one as well that has a distant pending date. The list price is $4.9 million. Without those two, the average price of SFH pending sales is $476,161, so we should see the average price drop over the next week. The median price of pending sales is $429,000.

We've had 34 sales(SFH & condo) above $1 million this month, and there's another 9 in the pipeline. Last year, we sold 55 homes above $1 million in May. We might reach 50 this year. -Bob

@Radley77. I was referring to Southern california home prices as an example. I was not referring to calgary. please re-read my statement.

@Warren. Thank you for the links. You entirely missed my point. Which was, prices in southern cal are still above the 2002 prices. However, my main theme was "don't expect a crash in real estate prices anytime soon in AB while oil is above 100 USD"

I don't follow the case-Schiller index. It's a nice index to give a general over view, but all real estate is local. That's why I plot my own indices.

Let's look at a random SoCal house.

http://www.zillow.com/Charts.htm?chartDuration=10years&zpid=63200090

Looks to me the guy who bought in 2002 for 210K is sitting pretty with a 100% gain even after a so-called "crash".

The fact remains that housing is not "crashing" for someone who bought in SoCal in 2002. It's only "crashing" for those who purchased at the peak.

so translating that to Calgary. How many do you think bought at the peak price?  There was an average of 2000 closings a month. Price extremes were made in approx 4 of months, so that's an average of 8000 homes. I'm guesstimating approximately no more than 10% of the current home owners bought at the peak price.

So we can see that there aren't many current owners "under-water". Also no one I know in Calgary does ARM mortgages. Therefore I don't think we will see a high % default rate.

That's why prices have been relatively stable in Calgary, even with so much inventory.

Re: Average prices: The *Average* price in Calgary will continue trending higher. Right now what is selling is priced at the very top and the very bottom of the price spectrum. The price average of 10 280K condos will be different from the price average with 1 $7 mil executive house and 10 280K condos.

The median price will give you a better market picture.

Why will the average price in Calgary trend higher? AB is rapidly becoming one of the top energy sources for US crude. What does that mean? it means there are many more oil related corporations and their very highly compensated management teams who have moved/need to move/planning to move  to AB. Calgary is where all the oil industry head offices are being located. Which means there is a small army of very well compensated oil executives looking at very expensive real estate.

The weak link in AB real estate prices is the AB economy is a one trick pony reliant on the oil and gas industry. We sorely lack good visionary leadership. This is the time to cut taxes on non-oil related industries so the economy has other industries than oil to fall back on when crude prices deflate.

Frank,

one point I wanted to touch on wash the peak buying.  I went to an open house yesterday.  The realtor said she had another client who bought a condo in 2006 and is now trying to sell. The current ask price is only 10k more than what she bought for in 2006.  So if they get full ask they will still be a tiny bit in the red after commission.  This might be an exception but I thought I would mention that the buyers in the red don't necessarily just include in that rough 4 month peak window.

On a different note I think I am noticing that most of the people I know that got hit harder are people who bought condos.  I personally know 6 friends that bought between Feb - Jun of last year.  4 of those bought condos.  The ones that bought inner city houses haven't seen a big drop in price.  In fact, it would have been a very minimal drop since they bought an old house which had a very high land value being very close to downtown.  Two of those that bought condos (one in feb and one in june) have seen current asking prices are similar units 40k below what they paid.  However they are one other are now in it for the long time so it is not as big of an issue for them as long as they don't suddenly need to move.  However, the last person bought a house last year at the peak and has been unable to sell the condo since last year.  He had his condo rented out and it was not enough to cover his mortgage and condo fees.  He's becoming more and more desparate and is almost willing to take anything at this point.  

The point of this entry is I don't feel the majority of the sellers are that desperate as lots of buyers last year did buy for themselves to live in.  However there is the small % that are desperate and that's where you will be able to get a steal of a deal.  Looking at my realtor's mlx listings he sends to me it seems as though getting a house at 20k below ask is not out of the ordinary anymore.

Hi Bob, I could not find this answer anywhere so i hope you can help me out here. Does the house size on MLS include the attached garage size? If it does, does it do the same thing for detach garage?

Thanks

Tyler

Tyler; The sq ft(or sq m) you see on MLS only includes the house area that is entirely above grade, and not the garage. -Bob

Vinny, you said "20k below ask is not out of the ordinary anymore." is so true. My friend just bought a house in Sherwood NW of Calgary with 21K deduction of asking price and average out to be $237.96 per sqft (with walkout). I am not sure if it is a good price but  the city property assessment for this house is like 100K more than what he paid.

Tyler

Frank:

I do understand the point that you're trying to make.  You wrote:

"Looks to me the guy who bought in 2002 for 210K is sitting pretty with a 100% gain even after a so-called "crash".

The fact remains that housing is not "crashing" for someone who bought in SoCal in 2002. It's only "crashing" for those who purchased at the peak."

As I already posted links to - if you bought in San Diego anytime since late 2003, you're likely underwater.  That's a pretty big "peak".  So, yes, the person who bought in 2001 is still doing okay.  But so is the person who bought in 1973.  I just don't think that either tidbit makes the hundreds of thousands of people who bought in the last 4 years feel any better about their situation.

As for Calgary, you said "Price extremes were made in approx 4 of months".  Like any bubble, this is something we won't know until further in the future.  I personally believe that irrational prices existed for a lot more than four months.  I'm sure the people in SoCal who bought in 2005 didn't think they were buying at the peak when prices continued to rise for another year.  But when we look back now, we see just how irrational the housing market was for how long.

This is not meant to compare Calgary to California, and I will 100% agree with you that I don't think we'll see the default rates that are going on in the states right now.  But I'm not expecting prices to go down because defaults are going up.  I'm expecting prices to go down because there are so many months of inventory on the market.

I don't understand how people can't see what's coming?  Prices fell last year by tens of thousands of dollars because RE went into a "Buyer's market".  We are now deeper into that buyer's market than we have been in many, many years.  And it looks more and more like median prices peaked in February and have been falling since.  What do bulls think is going to happen, lol?

Incidentally, why is that NOBODY wants to talk about condos, lol??  While I am more focused on SFH (since that is what I'm looking to buy), it seems that whenever people talk about market stats they talk about SFH.

Is it the 7.5% ($23,000) year over year fall in the median price?  Or is it the 5.5% ($18,213) year over year fall in the average price?  Throw in another 5% inflation that prices haven't kept up with - and those are some ugly numbers.  Or is it the 52 DOM this month?  Or the projected 39% fall in sales?  Or the unheard of sales to new listings low of 27% so far this month?  Someone help me out here, why is it nobody wants to talk about condos??

To me the question is, are we in for a soft landing or a hard landing?  

I agree over the long term, house prices are going to go up... just like the S&P 500.  

I think there is a much greater chance of a soft landing here than in the U.S. as we don't have the same rate of riskier types of lending practice.  We are not going to see a foreclosure boom, but I expect mortgage arrears to double and return to historical averages.  Also, we are lucky to have record high commodity prices.  This will help mitigate the chances of a hard landing.

Condo inventory, which is already very high, still has record amounts of product to hit the market this year.

So, I think there is still going to be another 2 or so years to the correction.

Also, I have recently had a friend buy a new two-story attached infill with full upgrades in downtown Calgary for under $550G.  This is a price point that has not been seen since 2005.  This would have been listed for up to $750G last year... So, I have seen inner city homes dropping as well.

I believe that houses in Calgary have the potential to fall 25% in a hard landing case.  I expect things like rent and income to keep rising, thus improving affordability and investment quality over time.

As long as inventory continues to build, we are still developing downward price momentum.  

Radley; There have been 3 infills sold on MLS for less than $600,000 this year, all in the NE inner city(Tuxedo or Renfrew). The average size was 1758 sq ft. There may have been more sold directly by the builder, which is what I suspect in the case of your friend.

There were a total of 6 sold in 2007, and 45 in 2006. There are 8 attached infills listed for sale for $650,000 or less. -Bob

Bob, is it true that new homes sold by builders last year only show-up in the average SFH (or condo) price when the new buyer takes possession?

Nemesis; Those are CMHC's criteria for homes that are pre-sold, and it only affects CMHC's numbers, not MLS numbers. If it's a spec home that goes on MLS, the sale price will be effecive when the house is sold, and that is usually upon completion or within a few months after. -Bob 

 So prices from the peak actually do not play out in the average until months (or for condos) years later?

Likewise, homes that pre-sold a year before the peak would have been undervalued. -Bob 

Artificially bumping up the average and median price over the longer term (and/or ceating lag in average pricing adjustments to current conditions)?

Seperately, i hate the 'oil means prices go up' argument of the bulls. I think inflation will be what erodes prices, not an outright drop in prices (so i am not a huge bear) -- but the recent ~3 surge in pricing was due to a real and perceived lack of capacity in the home building industry to provide enough homes. A lack of capacity to meet demand ALWAYS results in higher pricing, and when the market can provide an excess capacity (as it always grows to do) it virtually always results in a drop in prices.

The home building industry in Calgary can now provide more homes then would ever be needed for new migrants and natural population growth. Suburban condos in particular can now be put up by the thousands/year if needed.

IMO Bulls should be more concerned with the sheer size and ability of the home building industry more so than simply oil and gas prices. You aren't competing just with 10,500 current condos, but also the ability of veritically integrated home builders who need to sell hundreds and thousands of homes per year to pay their own bills.

The key factor that will influence the market is consumer confidence. With the number of 1mil + homes sold on the rise, I think that's a good sign. These days, looking at houses in good neighborhoods (eg Edgemont, Hawkwood), I couldn't find a good price at all. Most of the listings are still way above the prices that I've seen in spring 2007.  

Has anybody noticed how slowly the inventory is climbing this month? As of May 19, there's been a net gain of 254 listings(sfh). Last year, the sfh inventory went up  835 in May.

I've noticed the proliferation(and demise) of many Calgary real estate blogs, with each one purporting to know the supreme truth about the future of calgary's housing market. There seems to be a new one each day, but none of them get many comments. They all have one thing in common: they use your website for accurate statistics, then go on to say how inaccurate you are! It's ironic, too, when they blame CREB, the media, and realtors for everything, and then they give a disclaimer, "Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility." LOL LOL LOL

Carl;  Do you think we will make a net gain of 600 listings before the end of May? Probably not. Instead of inventory peaking in October as it has the past two years, maybe we're at the peak right now.

Regarding all the other blogs which are critical of me, anyone who is making an impact will reap lots of controversy. I take it all in stride and like to use this analogy: I used to race cars.  When running with all the others in the middle of the pack, nobody gave you a second thought. When I was winning races, everyone was gunning for me. That was good training for this. When they've stopped talking about me, I'll know that someone else has taken the lead. Information that isn't misleading is helpful, and I am confident that all the reasonable people out there can separate the wheat from the chaff. Bloggers who constantly insult others  will not have any credibility with intelligent people, which are the ones I want as clients.

The publicity and business I get from all the blogs and links is substantial. Although I didn't plan it this way, my website and blog could be used as a model in Marketing 101 on how to create free exposure. -Bob

K, this is an honest question.  Was there something special about today (May 21st)?  An unusually high number of listings I've been watching disappeared (sales or delists?) and it seems like there are tonnes of price reductions (more in a day than I've seen all week in the neighborhoods I'm watching).  Is there something special about today that I don't know about Bob, or is it just a coincidence?

Warren; You're not kidding. There were 377 price reductions over the past two days and 69 de-lists. It's because of the long weekend. A lot of the activity that would have happened on the weekend gets compressed into the first couple days thereafter. -Bob

Thanks for the info Bob, that makes sense.  Although the long weekend wasn't as quiet as I would have expected (going by the stats).  Did you find it busy?

Warren; It was pretty quiet although I spent a good portion of it in the mountains. -Bob

Entry on the bubble blog today that says

"Mike's site contains serious mathematical errors. It consistently raises median prices more than upward changes should cause and underestimates downward changes. Yesterday, for example, the median was $420,000. Today it is $420,000. That is despite the 46 hourses that sold with a lower average median."

To me, it makes absolutely no sense, yet no one over there has questioned it. What gives? 46 houses sold yesterday, They can't all be below the median price. Only 23 of them can. Underestimates downward changes? I thought facts were facts.

Celsius: Here's a tipoff: when someone says "average median," you know they flunked high school math! It's all gibberish. I've never heard of "underestimating downward changes" in the median price. They're not estimates, they're hard data.  My guess is someone posted it on purpose to prove a point(that it's easy to confuse some people with B.S.) Mike's stats are accurate.  -Bob

Bob, I know you'll be devastated, but the president of your bubble blog fan club, Jim S, says he no longer reads your blog or website.

Funny thing is, he is quoting things that you said yesterday. Guess it's effective today.

It was funny to see how quickly he agreed with the median price mistake. They're having a lot of trouble wrapping their heads around what a median price is.

Chopper; He can't stay away. He's hooked on my website. He's logged on as many as a dozen times a day. Is he now going to go cold turkey? For those who don't know, he posted on here a while back under the name "confused." When someone goes out of their way to tell you they aren't reading here, they're reading here. -Bob

That median price thing was bizarre.

Mike's gone through the trouble to post a primer on how to understand the median price. It won't do any good, though, because the guys that really need it aren't reading realtor blogs anymore LOL.

Celsius; As I just said, they're hooked. They'll be reading it. -Bob

LOL...and I quote:

"46 houses sold yesterday, They can't all be below the median price. Only 23 of them can."

I have news for that poster... if 46 houses sold yesterday, all of them could be below the median, and if all of them were close enough to the median, effectively they might not even have enough impact to make any change in the median.  Especially since CREB seems to round that number off to the nearest thousand.

Al; If you're using the entire month's numbers, yes, all 46 could be below the median. In this case, it was just the day's sales. -Bob

"Underestimates downward changes? I thought facts were facts."  That's the only correct statement in that entire post... facts are facts.  And the fact is, that poster needs an enema just to clear his mind out.

So I checked out the "other" blog to see what all the fuss was about.  Yes, the misunderstanding of statistics (median price) is sad.  And yes, I disagree with the vast majority of what is posted over there.

That being said, as for the Garth Turner reference, I see that Brent has posted a piece from Garth's blog referencing things to be concerned about with the Canadian RE market.

I think there are some very good points in that post.  Instead of just bashing him and not even addressing the issues he raises, I was wondering if Bob would like to maybe offer a rebuttal to any of Garth's points about Canadian RE?

Warren; I will let people decide for themselves based on the facts, as I always do. I just want any unsuspecting readers of his propaganda to know the other side of the story. -Bob

Incidentally, I didn't realize it was 2019 (my, how time flies when prices are falling!).  Perhaps we shouldn't be pointing and laughing too much about predictions of "20 years in the future" until we see just how much this bubble pops?

And Chopper (not to pick on you, but you're one of the more regular bulls left on here now that Al, Mike and others have seen the writing on the wall), I was wondering if you could help me out with my request?  I have some friends who are thinking about buying a condo.  Could you form a coherent argument as to why it is a good time to buy a condo now instead of waiting?  Anyone?  Please?

I'm just curious, because as far as I can see one should "Wear your sunglasses today when you look at the daily stats on Mike's site at www.findcalgary.com. You'll be looking at two bright and shining red arrows. Those each represent the major price indicators of Calgary condos. For the month of May, average and median price is down for condos."

Whoops!  I forgot Mike got rid of the arrows....

Warren; Maybe you should ask Mike why he deleted the arrows. My guess is that he ran out of space, or they were showing green too often and making the bears upset.

The problem with the misunderstanding of the statistics, in my mind, is that if Bob had made a similar mistake, they'd be all over him with a 1000 angry posts about how "unethical" he is. Oh, wait, they do that anyway. I never understand why the people on that blog are so emotionally invested in the daily fluctuates of the price of real estate. Very odd.

As for condos, I tend to think they're going to take a substantial hit -- given amount of existing inventory, the quantity of new construction coming on the market, and the fact that this segment of the market is most prone to speculation, I honestly can't see prices going up in the near term. Furthermore, I think Calgary is probably overbuilt at this point, so I think the whole construction industry might be in for a big slide. So, yeah, I'd wait before buying one. Of course, the real question is: how long do you wait? Can you time the bottom?

Of course, if you're entirely sure that real estate in Alberta is in