To borrow from Mister Kennedy, "When the Saskatoon boy gives you real estate investment tips, you know it's time to get out of the market."
It's funny that we Calgarians can see with perfect clarity the bubble in the Saskatoon (or any other market) but hold fast onto our conviction that Calgary's doubling in real estate prices is purely Real. I've got some bad news. People aren't moving to Calgary any longer to pick up high paying energy sector jobs. In fact, I have a friend who works in an energy (gas) sector company that is losing money and looking to lay off staff. On the other hand, I know tonnes of people who work in housing (selling or building) and they all still think the sky is no limit.
More importantly, perhaps you missed it this week, but the US economy had it's clarion moment this week regarding the housing bubble and credit crisis, and some very, very bad things will be coming down the pipe the next two years. And it will be far worse than the dot com bubble.
What's in store for Calgary? By the end of 2008, prices will be off by 25% from today's peak. Interest rates will be up, and credit will be very tight. The rental market will be blooming as many places that are currently sitting vacant in the hopes of a "quick flip" will suddenly be forced onto the rental market as the owners will be unable to sell. There will be layoffs in the construction trades It will be a different world.
The Oracle has spoken.
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