There’s a comedic line that goes, “it’s like deja-vu, all over again.” And maybe that’s appropriate as we continue to watch, not only Calgary’s housing market, but also the national real estate market as a whole.

Here we are a little more than a year after local and national markets each took their respective nosedives, and in most of these same markets, we’ve seen a return to pre-October 2008 values, if not growth (in some cases record growth) above and beyond previous levels.

In fact, a recent Scotiabank report is suggesting Canada may once again be on the verge of another housing bubble. Now, at the time I composed this article, I went online to Scotiabank.ca and searched through their latest media releases and the link for this latest report was yet to be published. But according to a recent CBC write-up , Scotia’s economic experts say the signs are pointing towards a housing bubble of national proportions.

One statistic that jumps out for me is the report’s claim that Canadian real estate prices have jumped an average of 86% over the last decade. This is based on comparing current and past prices but it’s still an impressive number. Housing prices seem to have ‘weathered the storm’ and remain stronger than ever. And Scotiabank economists seem to think this will be how things stay for at least several years to come.

The report says Toronto and Vancouver have helped lead the way when it comes to this overall real estate boom. I’m inclined to think Calgary, Edmonton, Victoria and Ottawa can’t be too far behind either, since all 5 of these larger centres have seen prices rise significantly, and the average and median price (especially in Calgary, Toronto, Vancouver) return to or surpass some 2007 & 2008 levels.

The article is quick to remind us the Bank of Canada (BOC) seems to be holding steadfast to its pledge to keep interest rates the same until at least Q3 of 2010. And a quote from the Scotia report says, “low interest rates are driving healthy affordability right now, but this effect will wane in the next two to four years.”

On a micro-scale, I’ve said, since September of ‘08, that if Calgary’s real-estate supply remains the same or lowers (this means that we don’t suddenly get an influx of new listings on the market) we’d see another rise in average and median prices. Low and behold, that’s been the case over the last year – and it’s also the case on the national level. Supply of homes on the market seems to be limited and that’s creating increased demand for what’s available – thus inflating real estate prices as well.

Also, as the article mentions, and something I’ve talked about before, innovations in the mortgage market, adapting to the economic conditions of the time, have brought more buyers into the market – especially in the last 5 years. Apparently the Scotia report outlines 18% of Canadian mortgages are amortized for periods of longer than 25 years. 10% are amortized for over 35 to 40 years.

And the report seems to suggest we won’t see a slump in values or this ‘real estate bubble,’ as it were, anytime soon. It seems to show that, if anything, we’ve learned from the mistakes of our counterpart to the south, and the U.S. subprime crisis which helped drive one of the worst economic recessions in history, will not be associated with any sort of risk or ‘bursting of the bubble’ in the future.

Does this surprise you? What do you think? Send me your comments

I remember predicting, awhile ago, that if inventory levels continued to remain low, and buyers and sellers finally decided to harness the courage to ‘get off the fence,’ we’d see Calgary’s real estate market recover to one of a more balanced nature.

Sure, that might seem like an obvious forecast, in theory. And yes, some of you would argue Calgary’s housing market has basically been balanced since April or May of this year. But it’s interesting to see, now, the experts are using the city’s recent real estate numbers to show a return to levels quite similar to what we experienced before the sharp decline starting in Q4 of 2008.

According to the latest stats from the Calgary Real Estate Board (CREB) and an article from the Calgary Herald, sales and prices here have definitely recovered. CREB points to October’s numbers as strong evidence the Calgary real estate market has turned a corner.

For instance, the average, single-family sale-price, for October of 2009, is just under $462,500 – that’s up almost 10% over this time last year and up roughly 1% from September. It’s also, according to the Herald, the highest on record and more than $10,000 higher than October of 2007, when the housing market was still booming.

The CREB numbers also demonstrate both single-family and condominium sales are each up more than 50% over October of 2008, with 1285 single-family homes sold and 601 condo-units changing hands, respectively.

So is this a surprise? Well yes and no. Very few people here, including the top realtors, industry analysts, and market experts predicted the Calgary market would seemingly bounce-back this quickly. In fact, rewind back to last December and most of these experts were feeling grim about the near future.

Now, here we are a year later, and the combination of mortgage affordability, low-rates, more affordable carrying costs and a flood of buyers into the market, and we’re essentially back to pre-recession levels in the Calgary market.

And as I’ve pointed out before – for the last 7-8 months, if anything, we’ve seen inventory levels drop and remain low, while demand has increased. And as this continues, that’s what’s driving prices back up. But it’s also important to point out (and the Herald article doesn’t adress this) that most of the increase in sales activity in Calgary is happening in the $200,000 – $500,000 range, and also, interestingly, in the $1,000,000+ category. So not every price-point is seeing noticeable growth.

Overall, don’t expect prices to keep rising dramatically. And certainly don’t expect the double-digit price increases to return to what we experienced in the ‘good old days’ of ‘07 and most of ‘08. But, all signs point to a strong. stable, spring-market, after we wade through the usual winter slowdown.

What do you think? Send me a reply.

As some of you may know, one of my more consistent ‘go-to’ sources, when it comes to talking about the economy, is Benjamin Tal. And as we carry through Fall of ‘09, the latest buzz seems to centre around, dare we say it, recovery. But when & how do we raise the flag that officially signals we’re in the recovery phase of economic growth? Well it depends on who you talk to.

Tal is quick to remind us that the true definition of a recovery is, “when GDP (Gross Domestic Product: the size of our economy) begins to grow again—not just for a single quarter, but on a trend basis.” By that definition, he says Canada is on the brink of the ‘r-word,’ by virtue of the latest numbers indicating Q3 growth. Couple that with the latest U.S. growth trend, over the last  6-plus months, and many economists are convinced the word ‘recession’ will soon be replaced with recovery.

On the other side of that proverbial coin (read: loonie) Tal points out a great deal of Canadians are quick to point to the unemployment rate as a primary economic indicator. And until the job losses stop or more jobs are created, recovery will be significantly delayed – perhaps as long as two years. And Tal alludes to a still weakened global economy coupled with a Canadian unemployment rate expected to hover at nearly 9% until at least 2011, as reasons to question whether recovery will happen sooner than expected.

“Even if the growth in GDP over the next couple of quarters is larger than we project, it likely won’t be enough to lower the unemployment rate. US house prices and credit markets remain challenged, Canadian and US consumers are still cautious given their earlier wealth losses, and businesses are hoarding cash rather than buying equipment.”

The good news seems to be that Canada’s national housing market is in recovery, with the auto industry targetted to strengthen further as well, over the coming months. And Tal says interest rates won’t “be tied to when economists declare “recovery”, but to when the unemployed see a recovery too.” He adds that if the Bank of Canada’s benchmark rate remains well below 2%, in 2010, we shouldn’t expect any significant interest rate hikes in the near future.

So the tendency to trade one ‘r’ word for another (that being the word recession with recovery) will vary depending on who’s doing the talking. Certainly, we’re starting to see signs of things returning to some level of normality – or at least subtle to significant improvement. Meantime, we’ll keep monitoring the usual indicators to see where we measure-up.

Thoughts? Drop me a line.