[Claeren]

I have said this before but the key point against any price increases is the current 'capacity to build' in the market.

We have about 9 months of already built inventory with (in my opinion) another 9 months+ of hidden inventory that would could be listed but is not.

+/-18 months is already a LOT of inventory, enough so that prices should drop 15%-30% more to clear it. But the real heart of the problem is that the home building industry went from working towards 30,000 units/year to 5,000 (with the need for less than zero due to inventories being so high) and therefore in the short term could EASILY up their new supply to 30,000 units/year again if there really was any demand out there for it.



Thus, even if people think Calgary demand is going to pick up, the ability to supply is now so great compared to 3+ years ago that it should have no upward effect on pricing.

(In short: New demand is too easily met by new supply)



Absolute BEST case IMO is flat pricing (likely due to inflation picking up significantly).

Worst case is a further -30% drop with a long period of price stagnation thereafter (further eroding 'value', though not necessarily 'prices')


The average single family home should be $250,000-$280,000 at most, and that is with high'ish oil and/or gas prices. And that is not a 'drop' in prices, or a market of 'cheap' prices, that is simply mean reversion in a city outperforming historical growth norms. If the economy starts to underperform the mean drops significantly.





Claeren.