Quote:
Originally Posted by Claeren
There is going to be a LOT of data supporting higher prices in the next 6 months. It is a VERY specific and dedicated plan being put forth by the home builders association and various related interests to clear their inventories. In other words it is propaganda - virtually all of the data available you will quote is directly issued or indirectly issued (submitted data being easily manipulated) by people in the industry.
Claeren.
|
First off I have to agree with you completely on this, why would real estate companies say prices are going to fall? Does not seem like a good idea to me.
I know prices are strongly associated with supply and demand (and yes I am an economics major) but lets think of some of the contributing factors to supply and demand.
Warning: Obviously this is speculation and I am far to lazy to look for print to back up all my comments, its more for a discussion purpose.
1) Falling price of lumber - Softwood lumber has gotten crushed lately and due to the real estate market in the USA (less new home starts) I doubt its going to recover anytime soon. Lumber prices have fallen across the board meaning it costs bulders less to build a house now.
2) Labor - Not sure how many people know someone that does cribbing, framing, etc. Let me tell you, their rates have been dropped significantly. The labor costs will come back down to earth (like not paying $40/hr to some drug addict to frame your house who's only experience in building was with legos when he was 5)
3) New home starts - They have almost stopped (spec builds). Most major builders are not building on spec anymore as sales have slowed.
4) Immigration - Will Calgary get another 25,000 people this year? Who can actually afford our houses? With the oil patch starting to slow down (ask any well tester who recieved the fantastic 'your job is not guarenteed this year' letters) continue to affect jobs?
5) Emmigration - Are prices just too high and people will continue to flock back to Sask. (Saskatoon went up 50% last year)
5) Land - We are not like Vancouver where they have limited land and have to build up. I believe we have hit the peak (or close to) on prices.
6) Flippers - How many people have more then 1 house/condo right now and are "renovating it" to be flipped. I know plenty. When the housing market gets flooded with these it often skews the results of supply and demand. How many houses are flippers selling to flippers?
There is a lot to take into consideration and like always nothing is a guarentee. I would say that I can see house prices going lower in the near future then higher. Also with the recent activity of the stock market people may be a lot more sceptical when they are looking at dropping 500k+ on a new house when they lost 10%+ this month.
Food for thought. Flame away
