Category Archives: Calgary Herald

“Good news like strong home sales is potentially bad”

Skeletons2Anyone who’s followed the forecasts of the well-educated economists,  the pundits like Garth Turner, crazed attention-seeking bubble bloggers, or lowly realtors, the housing market predictions have been a comedy of errors(except for the realtors). Most would excel at being contortionists. Reversing direction so many times has produced dizziness and clouded analysis(see quote on blog header from Calgary Rip-off).

Porter: Strong sales means we’re drunk

The graveyard of bubble blogs

The graveyard of bubble blogs

All the bases are now covered. After reading for eons from guys like Garth Turner that the precursor to a crash is lower sales combined with higher prices, we now have Bank of Montreal chief economist Douglas Porter taking the opposite view, saying strong sales are bad news. “Canadians are already drunk on housing, so imbibing more means the inevitable hangover will be all that much worse.”

Madani: Persistent, consistent, and always wrong

“It’s astonishing to me that people are not picking up on this. If you see volumes crash and prices still rising, you shouldn’t be thinking everything is fine, you should see that as a warning sign.” David Madani from Capital Economics has been predicting a 25% drop in prices every year for as long as I can remember, and true to form, he’s back with the same prediction. I won’t be too hard on him, however, since he’s a Bugs Bunny fan. “Homebuilders are having a Wile E. Coyote moment” as when the perpetually ill-starred cartoon character realizes he has overshot the cliff and looks down to see nothing but air under his feet.

lucy-footballGarth Turner: I didn’t say crash

If Garth were a cartoon character, it would have to be Charlie Brown. He’s been ready to kick the football many times, only to have it pulled away at the last second, time and time again. Every year, some new development is the harbinger of the long-awaited crash: Higher interest rates. 35-year amortizations. Mandatory 5% down payments. 30-year amortizations. Unemployment. 25-year amortizations. Lack of first-time buyers. Now, this year, the silver bullet is the recent capping of CMHC guarantees. For six years he’s been lining up in anticipation of a big score, but rather than kicking the ball through the goal posts, he’s tripped at the line of scrimmage.

Most predictions could have been made by a monkey(Photo from the

Most predictions could have been made by a monkey(Photo from the

His futility has resulted in him saying that he never wanted to kick the ball in the first place. When confronted with the truth, he blames the victims for listening to him: “it was your decision.” Never one to be encumbered by facts, he has managed to keep a loyal following with his fantastic writing ability, sexual connotations, and lewd pictures. If nothing else, he knows that sex sells, understands herd mentality, and that people easily forget. In other words, he’s another Smoking Man but with good grammar and spelling, but not as intelligent. Cult followers have a difficult time thinking for themselves, but they should pay attention to these 10 warning signs. For example, #4  “Unreasonable fear about the outside world, such as impending catastrophe, evil conspiracies.” Yikes.

From the Calgary Herald: Canadians appear to be drunk on housing and approaching a hangover


Calgary house price growth best in Canada

Last month I made a special note of the fact that first-time buyers were busy in May, with a 30% increase in first-timers over last year. This story in the Herald reinforces it:

The real estate market in Calgary is supported by three important factors,  any of which would support a robust market independently and yet we enjoy all  three,” said Cody Battershill, a realtor with RE/MAX House of Real Estate in  Calgary. “The underlying variable that ties all three together is the  desirability and quality of living we enjoy in Calgary.”

The first factor is strong migration to Calgary and Alberta.

“The second is Calgary’s demographics. We are Canada’s youngest major city  with the average Calgarian being in their mid to late 30’s. This is important as  first-time buyers kick start the property ladder and enable existing homeowners  to sell and move up,” he said.

“The third factor is that Calgary is a head office leader and business hub  that is recognized internationally for our experience, technical prowess and  leadership. Calgary has more head offices per capita than anywhere else in  Canada and is the world’s 17th most competitive financial centre.”

Read more:  House price growth best in Canada

also, from BMO: Prices remain stable, perhaps maddeningly so for the legions of bubble mongers. The ceiling can’t hold us

Some meltdown

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.

Market update Apr 1 – 14, 2013

Sellers are finally starting to list their homes, but inventory remains low because the buyers are snapping them up.

Inventory vs sales and price2

Bidding wars update:

Over the past 3 days, 17% of homes sold for list price or higher. A bi-level in Silver Springs was listed for $475,999 and sold in 5 days for $484,000. It was purchased in 2010 for $417,000.

A 2-story in Sundance was listed for $419,900 and had a firm offer in 2 days for $430,000. It was purchased in 2007 for $365,000.

From the Calgary Herald: Calgary home price growth best in Canada

Calgary #1 Destination in Canada

Calgary skyline3

After seeing how busy the real estate market has been in Calgary, this story shouldn’t surprise you:

U-Haul names Calgary as top 2012 Canadian destination city

According to moving data reflective of nationwide statistics for calendar year 2012, Calgary ranked No. 1 and took first place from Toronto, which ranked No. 1 for 10 years in a row and dropped down to No. 2.  Montreal ranked No. 3 and Edmonton took No. 4 for the fourth year in a row. Other cities in the top-25 included Regina, Saskatoon, Kelowna, Vancouver, Victoria and Red Deer. 

The ranking reflects destinations for movers renting a truck one-way and considers every city in the country, regardless of size. To make this even more significant for Calgary, the data is not stated as a percentage of population.

In the United States, Houston took top honours.

More accolades for Calgary: Bow Tower is world’s most spectacular corporate building

Calgary housing prices and sales on the rise in September

Only three days ago, we read in the Calgary Herald, Calgary housing prices and sales on the decline in September. This headline made front page news on the doomer blogs.

The bubble bloggers took this as a sign that Calgary was joining Toronto and Vancouver on the road to real estate Armageddon. What a difference 3 days can make. I can guarantee that you won’t be seeing any links posted to my headline on the fearmonger’s blogs. They’re not interested in enlightenment or accurate statistics. They prefer to reinforce their agenda with selective data which reinforces their group-think.

What should be of greatest concern is that the housing market in Calgary has a shortage of listings. Inventory is down 23% compared to last year. Can you imagine how much higher the sales increase would be if there was a better selection of homes for buyers?

What happened in April

The April 2012 stats update can be seen here

From the Calgary Herald Calgary housing maket soars in April

The Herald reports sales are up 26%, but that’s compared to 2011. I feel that it gives a more accurate picture to compare to the 3-year average, as below.