[smith12]

Originally Posted by Slava

I guess as far as real estate goes the nagging question is basically this:

A) You bought a house in 2007 for $500,000

B) Would you list that home for $425,000 today?

C) Are you going to want to list in another 6-8 months for $350,000?

That is essentially what you are suggesting that the market will do here. Whether you factor in the projected growth or not at that point makes little difference in some ways. The only time a guy with a $500,000 house is selling for those types of price is when he has no choice....its sort of an artificial floor on the market in that sense?

There's no such thing as an artificial floor. Everything that's a commodity will be determined by supply and demand. If that person who has that 500K house with a 480K mortgage left on it loses their job, what are they going to do? They have no options so their bank is going to take their house and sell if for the 350 you've quoted above.

If oil prices sustain the 30 - 40 dollar range for 6+ months this, imo, will be the norm in Calgary and not the exception. You will have combined effect of an increase in supply due to foreclosures and a decrease in demand due a lack of affordability that stems from job losses and frozen wages.

It could get very ugly if oil doesn’t recover soon……