Many of us probably did not even know that the federal government is not playing fair in the mortgage insurance industry.  Keep in mind CMHC which is a federal crown corporation is clearly the market leader.  Also remember that competition in tis industry has made the business stronger and brought much innovation and best of all lower prices for mortgage insurance.

The federal government however only fully insures Genworth or AIG to 90% while they back CMHC to 100%.  this has been the way it is forever, but in these crazy times the banks have almost exclusively switched their allegience to CMHC.

You might say “who cares”.  Well read the above paragraph again.  If Genworth and/or AIG leave Canada this will no doubt hurt our industry.  Not to mention the fact that right now CMHC is causing all kinds of problems because they are more often not accepting values of real estate.

Let’s hope Stephen corrects this problem tomorrow in the historic budget

This time you don’t need to hear it from me.  Here are two different national Real Estate companies coming up with the same opinion for Calgary Real Estate.

Readers know i already think this as I have mentioned it already.  But look around.  There is still deals being made, sellers who price right will sell their home.  Buyers who break the herd will get a great deal…but the herd will be back…soon.

A little good news, modertaing supply in the market, and the forecasted turnaround in the recession by mid-year will bring a stronger second half to this year which will offset the declines in activity and price that we are seein now and for the rest of the first half.

Not that you really needed to spend too much time with an update to builders as many of them already knew in November when CMHC released their annual forecast that their numbers were to aggressive.

In November they told us that the starts for 2009 would be 4500, last week they said it will now be 3800.  Even at this number most builders think they are still off.  Reviewing a recent survey of builders opinion from the Calgary Region Home Builders Association called for starts at 3300.

Either way it will continue to be a tough year for builders, which means it will continue to be a great year for people wanting to buy a new home.  Margins will be tight.

Some people ask me how is this slowdown in the construction industry really hurting the builders?  Consider this.  Let’s say the average sale of a New home is $550,000.  In the height of the boom builders were making around a 25-35% profit margin.  Let’s say 30% which means they would have made say $165,000.  In “normal times the margin should be around 18% or $99,000.  Today most builders are lucky if they are making 13% but it is more like 8-12%.  At 10% they make $55,000.  That is almost a 200% drop since the boom, and an 80% drop in profits per house built compared to “normal” times.

Do we really need to say anymore…now is a great time to buy a new home.