I love how Garth “I didn’t say crash” Turner can pretend that he never called for a crash, and he does it with a straight face. His infamous crash has morphed into a “correction and slow melt.” He’s even convinced his followers that he never said CRASH. Today on his blog, a reader made this comment: “Garth has never said there would be a precipitous drop in prices.”
Garth made this prediction in 2008 “Real estate prices in Calgary, Edmonton, Fort Mac at 50% of 2006 levels.” That would put our average price at $200,000. Today it’s over $500,000. If that’s not a crash, pray tell what is. At the height of his scaremongering, he even had a “House-Aggedon” speaking tour. Then a few years later, he says “Actually I have not said it will crash, but correct and flatline. Please work on your reading.”
Another more recent prediction from Garth(Aug 2012): “That the Calgary market will crack is a given…it’s different here, until it isn’t. Which is soon.”
In this context, Garth probably meant 3-6 months when he said soon. The median price is up $30,000, or 7.1% since he said that. I doubt that we’ll see any references to that prediction by Garth on his blog.
How does he get away with it? Is this a commentary on the intelligence level of his readers(Smoking Man excepted)? To quote Garth, “Don’t they hate being treated like morons?”
…and here’s a comment from a reader:
‘The problem with all this talk of a “bubble bursting” in the Canadian real estate market is that the Economist have been saying this for many years now. How many years will they keep this up until it actually happens?..’
Read more Canadian housing bubble set to burst
RBC has a completely different take on the situation:
“Calgary-area buyers continue to benefit from a strong provincial economy, accelerating population growth and attractive affordability,” said Craig Wright, senior vice-president and chief economist, RBC. “RBC (affordability) measures for Calgary compare favourably against both historical norms and the national average, keeping it one of the more affordable housing markets in Canada.”
Read more: Calgary more affordable
The direct relationship between new listings and sales continues to be evident. In short, when there’s nothing to buy, sales suffer. Sales are only up 14% whereas earlier in the month when they were up 22%, but that can be attributed to low inventory and a lack of attractive new listings.
Douglas Porter, chief economist with BMO Capital Markets, said evidence continues to mount that the Canadian housing market seems to have pulled off the fabled soft landing.
He said surprises on the sales data in recent months have consistently been on the high side of expectations, not the low side.
“While some are highlighting the fact that prices are now rising at ‘their slowest pace since the 2009 recession’ the plain facts are that: a) they are still rising, and b) faster than inflation, and c) prices are at all-time highs. Some meltdown,” he said
Read more in the Herald: Calgary a bright light among Canadian housing markets.
Inner-city development properties are in demand right now. A tear-down in Capitol Hill which was listed for $475,000 was sold in one day for $535,000. An old bungalow on a 50′ lot in Banff Trail sold in one day for $549,900 which was list price. It was purchased in 2009 for $470,000. These homes are usually bought by builders who construct 2 infills in place of one old house.
Bidding wars update: Over the past two days, 20% of sales were for list price or higher.
Mortgage broker Greg Williamson has come up with a creative solution to buyers’ fears of a price drop.
The Buyer Protection Plan, launched in January, is designed to protect the buyer for 12 months against a reduction in market value of their home, as the seller places five per cent of the sale proceeds into escrow for a year, guaranteeing market value. If the market falls one to five per cent, then the buyer and seller share the escrow funds proportionally. If there is no loss in market value, the seller reaps the entire five per cent.
Read more http://bc.ctvnews.ca/buyers-insurance-policy-protects-homeowners-from-price-drops-1.1271390#ixzz2SiwIgACS
A spike in new listings led to a dramatic rise in first-time buyers in April. Bidding wars are at their highest level in years. Over the past 3 days, 24% of homes sold for list price or higher. With new listings up 5%, I would have expected to see a drop in the median price, but the pent-up demand from buyers kept sales and prices up there. When 24% of homes are selling for list price or higher, you can be assured that inventory levels are not making for a healthy market. Let’s hope for a surge in new listings in May. You can see a more comprehensive update on my Monthly stats update.