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Originally Posted by metal_geek
More sensational media reporting... Try to give this guy come crediablility, then name 2 big markets and pass the article to your boss..
You'd have to be stupid to not see the correction right now, and that it's correcting more in places that went up alot. Calgary/Edmonton had alot of in migration from other parts of the country and it drove up demand. I think the factors that drove up alberta's market were not the same factors that drove up some of the other markets. Alberta's market was undervalued to start relative to the national average. Job prospects are still strong in alberta compared to most other places in the country, and I don't see alberta becoming any less attractive then it was before, especially considering a surplus of housing, and greater afordability.
There are too many factors involved to just lay blanket statments and talk about largest declines. All it does is create drama and scare people into thinking we are the US. COMPLETLY different circumstances...
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You sound exactly like bulls in Florida, Phoenix, Las Vegas and California did about 2 years ago.
Income is a huge factor in home prices BUT income and employment will be easing significantly for the next ~5 years. Home prices are also about 30% above what income suggests they should be.
As for the other factors you mention, they only matter when land is restricted (which it is not in Calgary) and/or where there is less CAPACITY to build than there is demand. Since capacity has grown to reach and then exceed demand prices (like they would with any consumer product) should no longer grow.
I see it already with new woodframe condos dropping and dropping their prices. Why would I buy a 2 year old condo in the suburbs for $320k (its price at peak) when I could buy a brand new one for $209k just as far from downtown? And those prices will keep dropping as well....
But keep on hoping, maybe hope will hold those prices up?
Interestingly, the industry lists price drops as one year declines but the market peaked more than one year ago. So when they say prices are down 5.6% they could really be down 12% since peak.
Claeren.