Category Archives: Predictions

Bad news for renters

Posted on July 28, 2013 | 1 comment

NenshiMayor Nenshi predicts the rental vacancy rate could come close to zero

This is not just bad for renters, but I also believe it’s bad news for Calgary in general. If people can’t find suitable, affordable accommodation, we’ll soon see a lot of negative fallout such as higher prices for home buyers, an exodus of people for more affordable locations, lower in-migration, students without accommodation, and a flood of pets at the animal shelters.

From the Calgary Herald: Calgary and Edmonton had the lowest vacancy rate of any major Canadian city in April, at 1.2 per cent, according to the Canada Mortgage and Housing Corp. Calgary rents jumped by more than seven per cent over a 12-month period, the biggest annual rise in Canada, as the average rent for a two-bedroom apartment reached a record $1,202, CMHC reported.

Tammy Panchuk, who owns 40 rental units with her husband, said they don’t have any vacancies now, and when there are openings they advertise on only one website because the inquiries become “overwhelming.”

Calgary is now among the fastest-growing cities in North America, according to new civic census data released this week, and Panchuk expects the narrowing rental market will force many would-be renters to buy instead.

“I deal with a handful of investors,” the Calgary real estate agent said, “and none of them have any vacancies whatsoever, and if they do they are snatched up just like that.”

If we had the lowest vacancy rate in April, I shudder to think what it will be now, after the flood. Read more Rental market worries rise in Calgary

1 Comment

Posted in Predictions, Renting

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Market update Jul 1 – 15, 2013

Inventory vs sales and price2

Bloodbath postponed for five years

“House-aggeddon” was supposed to have happened every year between 2008 – 2011.  No luck.

After the mortgage rule changes, a devastating crash was predicted for 2012. No luck.

A crash of biblical proportions was forecast for 2013. That one’s gone by the wayside.

Now its been delayed for another five years according to this gem from GreaterFool.ca: . “If so many people are rushing to lock-in pre-approved mortgage rates while home prices are still high, how bad is it going to be in 2018 when the rates are closer to 10%??? Its going to be a bloodbath!”

4 Comments

Posted on July 16, 2013 in Calgary SFH, Market update, Predictions

The flood: for the record

Posted on July 7, 2013 | 3 comments

Garth Turner has been notoriously wrong with his predictions about Calgary real estate. You’d think he’d know better…

CREB says…“While it might stave off a bit of activity on the sales from what we originally were thinking we were going to have for the rest of the year, I don’t think it’s going to be significant,” says real estate board economist Ann-Marie Lurie. “If there are less listings on the market because some of these properties are coming off, it actually could improve pricing activity in some of the other areas. You could actually see prices really continue to grow at the rates we’ve seen. So I wouldn’t expect much change there.”

Garth Turner(GreaterFool.ca) says…Then Calgary would be unique. Flood experience in other urban centres (like Brisbane in 2011) shows house values dropped by about 20% in affected areas, and as much as 60% for periods ranging between months and years. In fact in Brisbane (twice the population of Calgary) the average house price for the entire city – flooded or not – dipped between 10% and 30% for months after.

Other studies show that over a long period of time, there’s a flood discount, with properties that were underwater appreciating at a slower rate than those which stayed dry. http://www.greaterfool.ca/2013/06/24/the-deluge/

After his epic failings in the past, Garth has become quite reluctant to come out and make a definite prediction for Calgary, but it would seem in his contorted way that he’s predicting Calgary will follow in Brisbane’s footsteps with a 60% drop. No, a 20% drop. Sorry, I meant a 10% – 30% drop.

Update Aug 31, 2013: Stay renting. This is not the time to buy in Cowtown. -Garth Turner http://www.greaterfool.ca/2013/08/30/divine-guidance/

3 Comments

Posted in Flood of 2013, Greater Fool, Predictions

Market update Jun 1 – 18, 2013

Posted on June 19, 2013 | 1 comment

To quote Ben Rabidoux, “Hard to see how Alberta’s housing market will slow meaningfully given population growth + low units under constrctn.”

Inventory vs sales and price2Rabidoux: “Alberta nominal y/y population growth in Q2 2013 was HIGHER than Ontario for the first time….ever.”

 Here’s a chart from Rabidoux showing population growth:

Population change

1 Comment

Posted in Calgary SFH, Market update, Population, Predictions

Would a 50% drop constitute a crash?

Posted on May 24, 2013 | 4 comments

Garth TurnerI 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?”

4 Comments

Posted in Greater Fool, Predictions

The Economist: “Canadian housing bubble set to burst”

Posted on May 22, 2013 | 2 comments

…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

2 Comments

Posted in Calgary SFH, Correction, Fearmongers, Predictions

Some meltdown

Posted on May 15, 2013 | 11 comments

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.

11 Comments

Posted in Calgary Herald, Calgary SFH, Correction, Market update, Predictions

As predicted

Posted on April 11, 2013 | 4 comments

Sales have been repressed this year because of low inventory. A few days ago I predicted we’d see more listings and consequently more sales this month. Unlike Garth Turner’s predictions, mine come true.

So far this month new listings are up 18% compared to last year, and sales are up 17%.

I have a lot of respect for someone who admits they screwed up. If you got it wrong, man up and admit it and move on. Denial and obfuscation is some people’s style, however. Yesterday Turner was taking credit for his predictions, but there are a few of his readers who can see through the spin, such as this  one:

#97Vik on 04.11.13 at 12:08 am

Garth,

Price went up 30-40% in the GTA. You call 15% correction? Nice try dude. More like a dent. I feel sorry for the people who listened to you for the past 5 years.

We all know what prices inflated. I’m telling you why this period is over. — Garth

It would be enlightening to know what excuse he would use for his incorrect prediction about Calgary’s prices dropping to 50% of 2006 levels.

4 Comments

Posted in Calgary SFH, Greater Fool, Market update, Predictions

“…the beginning of the end in Cowtown.”

Posted on April 7, 2013 | 5 comments

Overheard on greaterfool.ca on April 1:  “It is not a bed of roses in Cowtown just wait and see over the next 2 mths.”

crocus2The 6% drop in sales in March is intoxicating to the doomers who can’t contain their excitement at seeing Calgary finally meeting the same fate as Toronto and Vancouver.  Even this insignificant blip created hysteria among the bubble bloggers, who are conveniently blinded to the realities of accurate data.

From a salivating Garth Turner this prediction: “… the beginning of the end in Cowtown.”

It’s been annoying and irritating to Turner to see the stability of the Calgary market, given his distaste of Alberta. In his frenzy to see Calgary crash, he’s conveniently forgetting that he once said, “one month means nothing.”

As for his credibility, Garth also predicted 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.

Most fail to mention that new listings have been down, year-to-year, for 10 consecutive months, or that homes were at record high prices in March. How do you buy a house when there’s nothing coming on the market that appeals to you, or is in your price range?

April will be the first month where we see an increase in new listings,  Y to Y,  since May 2012. More selection will hopefully result in a moderation of the prices, also resulting in increasing sales.

To April 6, new listings are up 13% compared to the 3-year average, and up  5% compared to last year.

Spring will bring more listings, lower prices, more sales. It may not be a bed of roses, but crocuses are beautiful, too.

5 Comments

Posted in Calgary SFH, Fearmongers, Greater Fool, Predictions

“So buy a house. Let us know how it turns out.” — Garth

Posted on March 19, 2013 | 6 comments

I’m glad you asked. Garth Turner(GreaterFool.ca) has been telling us not to buy a house since 2008. If you live in Calgary and took his advice, here’s how it would have turned out. Furthermore, in the past, you would have had a nice selection of homes to choose from, but with today’s miniscule inventory, you can’t be choosy.

If you bought a house...

Famous last words

Seven months ago, this prediction for Calgary from Garth Turner at GreaterFool.ca: “That the Calgary market will crack is a given…It’s different here, until it isn’t. Which is soon.”    

http://www.greaterfool.ca/2012/08/24/all-hat/

The average price has risen $45,000 since he made that guess. Any thoughts on what he meant by “soon?”

6 Comments

Posted in Greater Fool, Predictions