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lorenavedon · 02-05-2014, 11:41 AM

the situation in Calgary is completely different. Really rather impossible to have a crash but totally possible to have stagnating prices or even a small pull back.

A few factors. One being that Calgary is the best economy in NA right now. People aren't just going to randomly pack up and leave the city. Where are they going to go? So a mass exodus is not likely to happen like it did in the 1980s or 90s where people tried to leave the city. Even if oil and gas slows down quite a bit people aren't going to pack up and leave to Vancouver so they can get a job there at Walmart. Calgary has grown to a size now that if the economy is bad here, chances are it's bad everywhere.

Another major factor is money. People here in general are filthy rich including the middle class. People just don't HAVE to sell. Someone might want to sell, but if they see they cant break even or get the price they want they'll just hold on. Nobody is in a panic to sell here like they were in the US. In the US people were foreclosed because they couldn't make monthly payments. Here, people could lose their jobs for years and still have savings enough to make payments. Also foreign billionaire investors have money and time to hold and not have to panic sell.

Interest rates. A big factor and we'll probably see a cut in rates before we see an increase. Canada is dead set on a currency war with the US and no matter how good our economy is, they will do what they can to kill the dollar to match the pathetic "recovery" the US is currently struggling through. This means rates will remain low for years or decades and it's very possible inflation will wipe away a lot of people's mortgage debts.

Another huge factor is supply and demand. There just isn't any supply out there. This makes owning economically viable evidenced by rent prices. In a lot of places where the housing market crashed there was tons of supply and rents were dirty cheap. $1000 rents on $500k properties. People were renting at a loss because they thought their house appreciation would make up for it. Rent at a loss for 5 years then sell your 500k place for $800k or 1 million. People were crazy. This isn't happening in Calgary now. Rents are super high and in tern justify the house prices.

In general are house prices high in Calgary? yes. Welcome to the new norm.

02-05-2014, 11:41 AM	#2386
lorenavedon Backup Goalie Join Date: Dec 2013 Exp:	the situation in Calgary is completely different. Really rather impossible to have a crash but totally possible to have stagnating prices or even a small pull back. A few factors. One being that Calgary is the best economy in NA right now. People aren't just going to randomly pack up and leave the city. Where are they going to go? So a mass exodus is not likely to happen like it did in the 1980s or 90s where people tried to leave the city. Even if oil and gas slows down quite a bit people aren't going to pack up and leave to Vancouver so they can get a job there at Walmart. Calgary has grown to a size now that if the economy is bad here, chances are it's bad everywhere. Another major factor is money. People here in general are filthy rich including the middle class. People just don't HAVE to sell. Someone might want to sell, but if they see they cant break even or get the price they want they'll just hold on. Nobody is in a panic to sell here like they were in the US. In the US people were foreclosed because they couldn't make monthly payments. Here, people could lose their jobs for years and still have savings enough to make payments. Also foreign billionaire investors have money and time to hold and not have to panic sell. Interest rates. A big factor and we'll probably see a cut in rates before we see an increase. Canada is dead set on a currency war with the US and no matter how good our economy is, they will do what they can to kill the dollar to match the pathetic "recovery" the US is currently struggling through. This means rates will remain low for years or decades and it's very possible inflation will wipe away a lot of people's mortgage debts. Another huge factor is supply and demand. There just isn't any supply out there. This makes owning economically viable evidenced by rent prices. In a lot of places where the housing market crashed there was tons of supply and rents were dirty cheap. $1000 rents on $500k properties. People were renting at a loss because they thought their house appreciation would make up for it. Rent at a loss for 5 years then sell your 500k place for $800k or 1 million. People were crazy. This isn't happening in Calgary now. Rents are super high and in tern justify the house prices. In general are house prices high in Calgary? yes. Welcome to the new norm.