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?”
From today’s Herald:
May is turning out to be a very interesting month for Calgary’s housing market.
A month that could set price records once again.
So far in May, average prices for single-family homes are in striking distance of a new record.
According to the Calgary Real Estate Board, month-to-date until May 26, the average MLS sale price for a single-family home in the city is $521,633, up 3.65 per cent from the same period a year ago. The record average sale price was set in February this year at $518,452.
The city’s total MLS average sale price – which includes all properties – is also within striking distance of an all-time record this month. Month-to-date, the average sale price for all properties in the city is $459, 951 just off the all-time record of $460,766 which was established in March of this year.
The average sale price this month is also up 3.26 per cent from the same period a year ago.
Now there’s speculation that interest rates may actually drop(Sorry, Gartho, looks like you failed again):
“I think they’re definitely on hold mode at this point and, if anything, they may signal that there might be a willingness to cut rates at some stage if the global trend continues this way.”
Read more: http://www.calgaryherald.com/business/governor+Mark+Carney+will+hold+last+interest+rate+meeting+this/8439275/story.html#ixzz2UVdisdqS
Bond yeilds are up, mortgage rates will follow. It doesn’t matter what the BOC does. The markets rule.
Personally, the amount of money that is flowing into equities, and the lack of interest in bonds is going to drive yeilds higher, not to mention the view that Canada is becoming riskier to invest in (do in part to the inflated housing market and high, high debt). Yields are rising and will continue to rise, and mortgage rates will rise with the yeilds. There is nothing the BOC can do. They could take the benchmark negative, still will not help.
The writing is on the wall.