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Thanks for the acknowledgement. I have no idea when the peak will be since the forces pushing the market are unpredictable and volatile.

It boils down to supply and demand and inventory can't climb significantly this year. Huge numbers of people moved to Alberta in Q1 2009 (surprising everyone) and house starts were so low a year ago. There are lots of people who own multiple houses but that number itself is dwindling as we go forward.

A person moving to calgary would almost certainly prefer to buy than rent, given the low rates.

This effect of dwindling inventory and increasing prices feeds itself for awhile too as people get scared that prices will be higher next year. The same thing applies to interest rates (more people would rationally buy a house when interest rates start increasing, rather than when they are decreasing)

Many commentators are also overly scared of unemployment in Calgary - consider the following:

Out of 100 working people last year, about 5 will probably lose their jobs this year (assuming a yearly increase in unemployment from 3% to 8%). The other 95 enjoyed an approximately 5% annual wage increase as of a couple of months ago. Those people with jobs have quite a bit more money to spend and now that inflation is almost zero, they are actually better off than a year ago. Of course now that wages are starting to drop on average, that feeling will start to disappear. Who knows where this will all end?

I do think that realtors in the media should continue to be as factual and balanced as possible in describing the Calgary market. Wild swings do not help anybody and we don't want to see 2005-2007 again. Thank you for your balance Bob.

References for above:

http://www.finance.alberta.ca/aboutalberta/population_reports/2009_1stquarter.pdf

http://www.finance.alberta.ca/aboutalberta/economic_bulletins/current_economic_review.pdf

http://www.cmhc-schl.gc.ca/odpub/esub/64167/64167_2009_M05.pdf

to Jimmy

What kind of good paying jobs are still available in Alberta? How many people do you expect to come to live here next year?

To Mike

Drug trafficking still pays good lol

You've got to be careful if you use that drug money for buying a house. Under the "Proceeds of Crime(Money Laundering) and Terrorist financing Act, we are required by law to complete a "Receipt of Funds Record" which identifies the origin of your deposit. If it's a cash payment, look out for the investigators! -Bob

To Sky:

That's the way how you bought you first shed for 400K?

Good job boy !!!!

Well would ya look at the stats on findcalgary.ca.... the darn median is up again along with sales.

Still down yoy though, so those who didn't buy in 2007-08 are still doing better overall because they waited.  The pent up demand, coupled with the low rates, pretty much drove the spring market in my opinion.

Where do we go from here?  It's tough to say.  I'd like to think that prices will resume their downtrend, but with the happenings in the world being the way they are, you can't think this is the only scenario.  Sure Alberta is in deficit, and sure nat gas is way cheap... but all I know is that China is talking UP the US Dollar (for now), while only making slight mentions of a future new reserve currency.  All the while they are talking UP the US Dollar, they are using their Dollars to buy tangible assets (see purchases in Nigeria and Alberta for oil assets, and various places in the world for metals and mining assets).

"Thou dost protest too much" comes to mind.  Often the worst enemy of the US Dollar is the very country that talks it up while spending it to secure commodity assets around the world.

What does all of this mean?  Oil is pretty much going to stick around 60-70 and has no roof on where it goes when the inevitable collapse of the USD arrives.  Obama won't buy our "dirty oil"?  The Chinese will move in swifter than you can imagine.  They have cash-on-hand and very little red-tape.  They will buy Alberta oil hand over fist.

This does not necessarily mean real estate in Calgary will go up.  But I think we are indeed more sheltered than a housing bear like myself would like to believe.  Somehow people are still packing up and moving to Alberta, giving our province a net positive migration.  Even though the grass is yellowing here, it would seem like its brown over in Eastern Canada...especially the manufacturing sector.

For those waiting for a price drop in homes, you may still get your chance yet this fall.  The recent rise is "not real" and due to low rates.  If you are just sitting idle waiting for a outright collapse back down to 2004 prices, good luck... that doesn't look like its going to happen with the current inventory levels, new builds, and net migration.  I would expect flat prices for awhile as the market sorts itself out.

worldclass:

" If you are just sitting idle waiting for a outright collapse back down to 2004 prices, good luck... that doesn't look like its going to happen with the current inventory levels, new builds, and net migration."

With houses in Calgary may be you right. But with acreages and land around Calgary it will 99.9%.

@worldclass your comments on the macroeconomics are interesting. I'm not sure a "collapse" in the USD is inevitable, rather that a large increase in US taxes is, combined with a modest devaluation. For a preview, watch what happens in California this month - that will likely give us both a clue.

Local economics have been much more important in determining Calgary prices. Our RE market dropped significantly due to inventory levels several months before unemployment budged above 3% and several months before the stock market dropped sharply. Most media commentators were claiming the pending recession was imaginary then! Oil at the time was well over 100$ and climbing. Stelmach said our surplus would be 8 billion!

I wonder if taxes in other jurisdictions will only drive more people to Alberta. Our "deficit" was actually a reasonable operating budget surplus FYI before the heritage fund loss was factored in (you wouldn't know this if you listened to Alberta media though)

reference:

http://www.vancouversun.com/Business/Alberta+deficit+says+province+government/1747278/story.html

Looking at other provincial/state/national budgets is absolutely horrifying these days. If our "deficit" is like this in a huge recession with natural gas at such low levels (and with  a very steep contango coming) I really feel quite lucky.

see possible future Nat Gas prices here (hint: oil was doing this in February)

http://quotes.ino.com/exchanges/?r=NYMEX_NG

Jimmy:

"I wonder if taxes in other jurisdictions will only drive more people to Alberta. Our "deficit" was actually a reasonable operating budget surplus FYI before the heritage fund loss was factored in (you wouldn't know this if you listened to Alberta media though"

First when gov. will increased taxes they will do it in Alberta nor NEF. or Nova Scotia because here big money and pumping opportunities.

@Mike - You mean Provincial and Municipal Taxes. Federally, we are already doing via transfer payments. It wouldn't be politically safe to do anything to the transfer rates at this time when there is a balk at steady or rather bumbling Eddie on the royalty disincentive program.

In view of Canada as a whole, the debt burden is not comparable to the US where they have a good probability to increase taxes. Meanwhile Canada is in an enviable position to instead spend our way out of the recession. Hence you hear news like infrastructure spending and so on.

Philosophically, I agree that at some point the govt would have to get their revenues from somewhere or cut spending. The baby boomers won't have their govt go on a deficit and they will want all the benefits of the social and health programs that they so deservedly paid into and will want to reap those benefits when they retire. Who would pay for it would be the younger generation whom they dearly raised and pampered. Will the favour be returned in kind? Interesting times we are living in.

I see that sfh reached a new peak price again yesterday...this time for the median price now at $400,000.

When does it start going down?

I think it is going down from here. The locked in mortgage that caused the recent surge will be used up very soon. After that, with higher mortgage rate, winter coming, oil price normalized, we will see a much weaker activity.

The Alberta Bubble blog hasn't been updated lately. Did you finally sell Squiddly a house?

Bob, how much of a drop are you forecasting for the fall/winter?

Thanks.

Last year the median price dropped 12% from the peak to the low. The economic situation is no better this year, however we have a shortage of inventory. All things considered, I'd say we could expect to see a 7.5% drop by December. - Bob 

WOW!!!!!!!

SQUIDLY77 has just lost it!!!!!!

Since that Gloria bought a home and is too busy with her bubble blog (she's enjoying her property) squidlyy77 has started a new blog:

http://albertabubbleblog.blogspot.com

SQUIDLY77 really has lost it huge!!!!!!!

Remember how squidly always complained about censored blogs? He just censored 7 comments. His blog is about spewing hatred and insults - but only his.

I am still in awe over how the market turned around this spring... specially when all I hear about is rising unemployment and Albertans leading the way in bankruptcies and being the most in debt out of all the provinces.  Looks like a flashback to 1977 to me.  I imagine that most of the buyers are too young to know about that... and what happened in the years to follow...  

Long time since i've touched in here, and great to see things are respectfully humming along.  Bob, you may not remember, but you came and looked at my house a while back in South Calgary (in-fill with walk-out basement).  Anyways, I've done a lot of landscaping recently and wondered how much that impacts the resale of ones home.  Folks in Alberta in generally dont seem to care about gardens, etc. so much as other provinces , and so I was wondering on your perspectives of a well landscaped back front yard for overall value to the home.

Why does the housing market in calgary trade like a volatile penny stock? Up 7% in a couple of months is unheard of elsewhere. With your accurate forecasting I think you could do very well speculating in houses like people speculate in stocks.

Bob, could you share with us which areas you saw those anamolies?

I won't publicly mention them while this is before the courts. Any good realtor will be able to spot them when doing comparables. -Bob

Do you have any predictions on the price of real estate in Bangalore? If you've had a look at the Alberta Bubble website it's now turned into the Bangalore bubble. I'm not making this up.

Just so you know, Bob. squidly77 has started a new blog here:

http://albertabubbleblog.blogspot.com/

Under which some of his posters thinks that you are behind every negative post there and call for a very public apology from you.

P.S. His blog looks very unoriginal in every sense of the word...

Don't be too hard on Squidly. He sends a lot of business my way. I had 4 deals on the go yesterday - 3 of which originated with people who read the bubble blog. Encourage him if you can. Thanks to Squidly's promotion of my business, I'll be able to go skiing a month earlier this year.

I've had to completely ignore Squidly because it's been so incredibly busy but we'll do a special topic just for him when I get some time. I did a post about Calgary Rip Off buying a house, another about Garth Turner, and have completely ignored Squidly this year, so he's probably feeling left out. So many of his followers have bought houses that he is no doubt also feeling abandoned.

I took a look at his new blog, thanks for the link. It was very kind of him to post my prediction so predominantly on his blog. I wish him all the success and comments that he deserves. It looks like he's made quite an impression on some people.

Despite his bluster, I know deep down that he really appreciates DailyStats.ca and the accurate, timely, and relevant information on here. Why else would he be checking it so many times a day? -Bob