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Claeren · 01-22-2009, 06:07 PM

I think the biggest mistake a lot of you are making is the assumption that energy prices in Calgary were the prime driver of real estate pricing. (They were not.)

There were housing price bubbles around the WORLD people. Miami, LA, Vancouver, Spain, Ireland, London, etc etc etc etc etc.

It was due to cheap money (a credit bubble) and not a fundamental need for housing.

As that credit bubble deflates around the world prices have collapsed in roughly the same order they inflated and Calgary is right on course to experience its drop roughly 2 years after everyone elses.

I will eat my own testicles if Calgary home prices are only down 2% year-over-year in 2009 (except if they are being held-up due to hyperinflation where the underlying value is down substantially but the asking price is the same - which i only say because I don't want to eat my own testicles and that is that only way i see prices not dropping further).

I would say (again, as I have been saying for about 2 years) that prices will drop at least 15% this year.

(2010 is the bigger wild card, I can see prices dropping ANOTHER 15% in a number of scenarios but could also see them flatlining at that 33% total drop from peak and staying there for 10 years instead.)

What I find most interesting is that a lot of the people saying prices won't drop are the same ones who were saying that 2 years ago and 1 year ago, etc. I am pretty sure they could drop another 15%, look like they will fall further, and those same posters would still be saying they are not going to drop.

If there was any underlying increase in demand in Calgary the home building industry is already so large now yet has cut back from capacity so much that tens of thousands of homes could be built to meet that demand almost instantly. Home prices exploded when easy credit fueled demand for more homes than could be provided in the market. You subtract heavy demand AND easy credit AND a lack of ability of provide units from the equation and prices will free fall.

Claeren.

PS - If prices were not down 2% this year I would not actually eat my own testicles unless people on the otherside of the debate anti-up something equally horrible! lol

01-22-2009, 06:07 PM	#535
Claeren Franchise Player Join Date: Jul 2003 Location: Section 218 Exp:	I think the biggest mistake a lot of you are making is the assumption that energy prices in Calgary were the prime driver of real estate pricing. (They were not.) There were housing price bubbles around the WORLD people. Miami, LA, Vancouver, Spain, Ireland, London, etc etc etc etc etc. It was due to cheap money (a credit bubble) and not a fundamental need for housing. As that credit bubble deflates around the world prices have collapsed in roughly the same order they inflated and Calgary is right on course to experience its drop roughly 2 years after everyone elses. I will eat my own testicles if Calgary home prices are only down 2% year-over-year in 2009 (except if they are being held-up due to hyperinflation where the underlying value is down substantially but the asking price is the same - which i only say because I don't want to eat my own testicles and that is that only way i see prices not dropping further). I would say (again, as I have been saying for about 2 years) that prices will drop at least 15% this year. (2010 is the bigger wild card, I can see prices dropping ANOTHER 15% in a number of scenarios but could also see them flatlining at that 33% total drop from peak and staying there for 10 years instead.) What I find most interesting is that a lot of the people saying prices won't drop are the same ones who were saying that 2 years ago and 1 year ago, etc. I am pretty sure they could drop another 15%, look like they will fall further, and those same posters would still be saying they are not going to drop. If there was any underlying increase in demand in Calgary the home building industry is already so large now yet has cut back from capacity so much that tens of thousands of homes could be built to meet that demand almost instantly. Home prices exploded when easy credit fueled demand for more homes than could be provided in the market. You subtract heavy demand AND easy credit AND a lack of ability of provide units from the equation and prices will free fall. Claeren. PS - If prices were not down 2% this year I would not actually eat my own testicles unless people on the otherside of the debate anti-up something equally horrible! lol Last edited by Claeren; 01-22-2009 at 06:16 PM.