Phantom buyers

It seems "Alberta Real Estate Watch" is now mainstream. So now I feel like I'm kicking the industry when they are down instead of being some sort of renegade blogger. To see what I mean have a look at the comments the Calgary Herald article Calgary's MLS sales price to drop by 2% for homes, 5% for condos

Posted by 'Disgusted'
This article is completely irresponsible, wreckless manipulation aimed at coercing people into buying into a market that is headed for much lower prices. There are people who will be hurt by this - young people who have never seen this type of market before, older people who are hanging on in desperation seeing their retirement dwindle and others hanging on by a prayer hoping beyond hope for a recovery. Where are the facts to support this ridiculous prediction when all the facts point to a failing economy and lower housing prices. I am disgusted by the self serving message by the PRESIDENT of CREB and would urge everyone who feels the same to contact CREB to voice their complaint. At the very least I would like Ms. Wegewich to back up her comments with some realistic facts ilustrating her conclusions. Which of course she could never possibly do.

January 22, 2009 - 10:46 AM

So what does this mean for Alberta Real Estate Watch? I just put on some Vietnam jungle boots.

Yet again we are waiting for the buyers as we have since the boom ended. I put together a compilation of quotes from Calgary Realtors talking positively about interest from potential buyers.

Q: Has the market hit bottom?

A: All of a sudden we're seeing some buyers come out again and start looking for houses. I think they want to buy before the market starts to go up again.

Bonnie Wegerich, CREB president
Incoming real estate chief expects return to stability
Calgary Herald
Jan 21, 2009
(sales between Jan 1-15 are down about 60% from the same period last year according to Mike Fotiou)

Real estate agent Kristen McNaugton has been run off her feet. Instead of the usual winter slowdown, December has been the start of a real estate frenzy. "Well our phone is ringing off the hook. People seem to be getting off the fence and they're ready to buy"

CBC News Fail
December 10
(December SFH sales fell 47% YOY)

"International investors are definitely buying. Calgary and Edmonton real estate is hot in Europe and the U.S., more than I've ever seen before in all my years involved in real estate. The top banks in Ireland, for instance, are buying here. They see it as safe, secure and good for the long-term, compared to other options."

While he says the number of sales won't be anywhere near the record levels of the immediate past, "most cities in the world would cry for what is still forecast for here."

Don Campbell,
Calgary resale market seen as 'self cleaning'
Calgary Herald
March 1, 2008
(The bank of Ireland is trading at $2.12 down from about $60 in March 2008)

...Sales will come, he says.

It is already happening, says Tim Crough, a realtor with Prudential Toole Peet. "We're starting to see the starter home market pick up, predominantly in condos, but also lower-end singles."

'Breather' for market
Calgary Herald
March 1, 2008

Pent-up supply

It seems the recent "softening" of the Edmonton real estate market has been framed as a short term event as a result of hesitant buyers. This article in the Edmonton Sun quotes three REALTORS: Housing to heat up: Realtors

ReMax realtor Simon D. Hunt

"I don't think we'll continue to see much of a dip because there's still a lot of demand,"
"Peoples' perception is that the market has crashed, but that is skewed."

ReMax realtor Len T. Wong

"There's no urgency out there to buy at this time of year," he said.
"But the spring markets will be a lot more stable."

Jon Hall of the Edmonton Real Estate Board

"There's just been so much steam in (the house market) that the top is loose and the steam is getting out a bit,"

However, their are also people waiting for the spring "bounce" to relist. And consider the quote from John hall in this article

He noted that one builder has built 100 basements, but has now capped them waiting for things to improve.
"He's just going to wait for the market to turn," said Hall

To me this does not make sense especially considering that the recent downturn is small compared to the boom as pointed out in the article:

Hall said prices had dropped 6.5 per cent over the last five months after a 74 per cent hike over the previous 17 months.

So after a combined 60-70% increase is it reasonable to hold out for more? Are sellers reasonable to wait until spring to sell after such an incredible long term run-up? Is the spring going to be a market of pent-up demand or pent-up supply?