Last week their was a story in the Calgary Herald that is very optimistic about the Calgary market.

Yep, look down. There’s the bottom.

The Royal Bank has already gone out on a limb with a call that the recession will end in the third quarter–July to September.

and this from easily one of the most pessimistic economists in Canada only a few short months ago

“If you blinked, you may have missed the great correction in the Canadian housing markets,” says Douglas Porter, deputy chief economist for BMO Capital Markets. “Low borrowing costs, more affordable prices in many markets, and some pent-up demand after the fall/winter sales freeze have provided some heavy-duty support for housing.”

For what it’s worth there are many opinions lately on the sustainability of this recent surge.  This story seemed to put a lot of emphasis on the fact that you may have missed the boat.

My concern with this is that it fuels people to think irrationally.  The fact is that the market at this exact time has a incredibly low supply, and buyers even though interest rates have edged up are faced with the “do I buy now, or wait for more supply”.

My advice is simple.  The price appreciation we are seeing now will sustain throughout the balance of this year, and likely well into 2010.  Look for the Calgary real estate market to increase by 5% in 2009, and maybe more in 2010.

Interest rates are also on the rise.  If you put both the increased prices and increased interest rates together affordability will cool.

Make sure the house you are contemplating is well in your affordability today, and not stretching you to the max of affordability.  Also make sure you are working with a mortgage planner who will recommend a mortgage strategy in context of your overall financial wellness AND committ to managing your mortgage over the long term, as we navigate the turbulent waters of inflation and rising interest rates.