What is Normal?

According to several CanWest publications Western Canada's real estate market it normal.

Victoria real estate market gets 'back to normal' as industry sees signs housing boom is over
CanWest Global's Vancouver Sun

"We're also looking over the last five or six years and what we're finding is things are just coming back to normal,"
-Victoria Real Estate Board President Tony Joe

Lower Mainland real estate market returning to 'normal' levels
Canwest Global's Vancouver Sun

"We're experiencing a return to more normal market conditions," Kelvin Neufeld, president of the Fraser Valley Real Estate Board said in a release.

Regina housing market back to normal
CanWest Global's Regina Leader-Post

The housing market in Regina was at a frenzied pace earlier this year, but during the third quarter, prices have cooled down and flattened out, says a report by Royal LaPage Realty. More available listings and less demand from buyers means the province's housing market has returned to more normal conditions, the real estate company said Monday.

Condo market returning to normal
CanWest Global's Calgary Herald

"In 10 to 12 months, the supply and demand in the condo market will be normalized. It's starting to shrink already."
-Calvin Buss, president of Buss Marketing

Levelling in real estate market sets stage for stronger 2008
CanWest Global's Edmonton Journal (from August 2007)

"I don't really want to use the word 'softening' because I think this is more of a normalizing market. We were super-heated, and now we're coming down to something that's more reasonable."

Saskatoon home prices stabilizing
CanWest Global's Saskatoon Star Phoenix

This fall, Janzen forecasts a real estate climate more in line with Saskatoon's "normal" residential sales market.
"We're more on par with 2003, 2004, 2005 - so we're indicating a return to a more normal, stable environment," he said, adding the market is expected to stay in a similar state for some time.

See previous post

Saskatoon Thought Experiment

Just wanted to comment on the following from The StarPhoenix in Saskatoon

Housing starts keep building

"The longer people wait the more it's going to cost them in the future through both interest costs and purchase price," he said. "If they want to act, they have to act soon before they price themselves out of today's market."

For the anxious first time buyers in Saskatoon do the following thought experiment. Assume while saving for a down payment the assertions in the article become a reality. At some point in the future you become priced out as interest rates and prices increase. Consider this hypothetical future seriously. The new market will reach equilibrium with a balance of buyers and sellers, higher interest rates, higher prices and you being priced out. For this to occur there will have to be a set of buyers that will be able to (and choose to) support these higher prices and higher interest rates. They will have to be in numbers to match the increased residential construction. Since you have saved up while waiting these new buyers will have to either have a higher income and/or a larger down payment to leave you behind.

Where will they work and where will they come from? Will there be enough of them to absorb the new construction? Is this scenario likely?

This thought experiment is similar to a proof by contradiction. Assume the statements to be true then attempt to identify a contradiction. This is not a formal proof - just something to think about. Who knows - Saskatoon may end up getting the 2014 winter Olympics and become the next Vancouver. I may think that is unlikely but I definitely did not disprove it!

Also the StarPhoenix is part of CanWest's empire.
See: CanWest holdings