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.
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By Jay Albertson, February 25, 2009 @ 9:51 am
Just curious Greg, on what basis are you thinking there will be another boom in the next 12 months?
I’m struggling to think of any time in the history of markets where there has been 2 booms within even 20 years of each other.
I think looking back on this, you’ll see that Calgary real estate was just like any other speculative bubble. Once it bursts, people look back on it and think ‘What were we thinking?’.
Tech stocks of the late 90′s, tulip bulbs of the 1600′s, they’re all the same.
“This time it’s different.” – the most famous last words of anyone caught in a bubble.
By Greg, February 26, 2009 @ 9:14 am
Boom is a relative term, everyone will judge it differently. Let’s agree to say recovery then. I would agree we won’t and quite frankly don’t want to see the same boom we saw from 2006/2007.
If prices end up 25% or so off the peak and they stop falling and even see a small upturn then I for one would call that a boom of sorts.
I think that Alberta’s fortunes revolve with the energy industry. Many experts say we are still well positioned for oil’s rebound. We may see a sharp rebound in oil prices by years end, which will likely translate into greater consumer confidence and a potentially stabilizing real estate market.
Much of the future increased demand will come from our relatively younger population that now can afford homes that a short few years ago they could not.
By Jay Albertson, February 26, 2009 @ 9:31 am
Hmmm, ok, I guess if the definition of boom = prices no longer falling, then a ‘boom’ is certainly possible.
Our fortunes most certainly do revolve with the energy industry. Oil is one of the factors, but don’t forget about natural gas, which actually brings in more revenue for our province. It’s quickly heading towards the $3.xx mark, sitting at $4.03. From the peak of $13, that’s 30% of the peak.
Oil: 32% of the peak
Gas: 32% of the peak
Home prices: 75% of the peak?
Anything can happen, but if I were betting on it, I’d say 50-60% of the peak is more realistic.