Thanks to Andrew Kyle and his blog for this video, I couldn’t agree more that this sums up my current feelings on our market here in Calgary.  When the oil shock comes again and we boom again within the next say 12 months, we will look back at this post and let out a collective sigh, I wish people would stop following the herd.

Much has been said lately about Alberta’s rise in delinquencies.  This story suggests it is related to falling house prices.  I doubt that, but what I can say is that as usual this story from the media lacks perspective!  They always do this, PLEASE tell us the full story.For instance why not tell us that the current arrears is only SLIGHTLY higher then the 18 year average.  The stats show us that approx. 4 out of a 1000 mortgages are in arrears, compared with 3 out of a 1,000 last year.Let’s also remember that we are comparing delinquency rates now to a period when there was almost 100,000 less mortgages.Sadly, all this will likely lead to tighter credit guidelines from lenders as they overreact to this data.   Sigh.

CMHC on Friday tried to buy up to $7 billion of variable rate mortgages from the banks as part of the federal governments efforts to provide liquidity to the market.  The shocker was they were only offered $2.3 Billion!This means of course that the banks are saying that they did not need the liquidity and preferred to hold on to their mortgages.Just FOUR short weeks ago that same iniative sold $8 Billion.  The banks either are preferring to hold the mortgages on their balance sheets OR they are able to sell them into the open market “like the olden days”, either way this is a good sign of things to come.Final note on this was also the price that variable rates were sold at were also better then in the past which would suggest that the cost of funds for the lenders on variable rates are improving.As a caution here I don’t anticipate that this will result in the lenders giving a break right away to consumers by passing on this additional savings to you.

I really enjoy reading this blog and this particular post is highlighting something I have heard more then once.  We are headed for another oil shock.  I know most of you would probably cheer and maybe you should. However please tell me or more importantly yourself that you will be more careful in the next boom.  Remember the downturn that often follows an oil shock.