Quote of the day

“If we have 10-per cent-unemployment, that means 90 per cent of people are employed,” he said. “People are re-entering the market – they have the confidence to take advantage of bargain-basement prices. There's been a release of pent-up demand, and that has a long time to play out. Prices have gone as low as they are going to go.”

Gregory Klump
CREA economist
Canada housing rebound sparks fear of a Bubble
Nov 16, 2009

First consider the scenario where headline unemployment is 20% you could make the case that it's not so bad because 80% of people* are employed. Well if you did you would be wrong because that case is called a depression.

*Actually, if using the headline number it would be 80% of people in the labour force and not include discouraged workers. Also employed would include people who are forced to take part-time positions because they are unable to find full-time work. That is why 8.5 or 10% headline unemployment is really bad.

Next, what bargain-basement prices? Nationally, the Canadian housing market has reached new highs so its simply false to imply that buyers are taking advantage of any serious price discount. I would expect a chief economist to know where prices are.

A final point, while I believe some of the increase in sales this year was the result of pent-up demand I disagree it has a long time to play out. The Canadian housing market was experiencing strong sales into 2008, and achieved high home ownership rates. The downturn in sales started the second half of 2008 until spring 2009. So we had at most one year of below demographic sales from which pent up demand could accumulate, I would expect this to be consumed shortly, if it hasn't been already.

Quotes

Our government will be looking for ways to get you to spend money to stimulate the economy and they will be spending your tax dollars to stimulate the economy, so be a good Canadian and buy a home!!

Richard, Red Deer realtor

For a $300,000 home, a family would need an annual income of slightly less than $50,000. Monthly principal and interest payments would be $887 and $1,330 respectively. "At Jayman, we have lowered prices substantially as we move through our excess inventory," he says.

"We are selling home at close to cost and below replacement value," says Westman.

Jay Westment, President of Jayman

Quote of the year

2008 quote of the year goes to the chief economist of the Canadian Real Estate Association. The following statement appeared in the Calgary Herald regarding Calgary real estate. [emphasis mine]

"It's clear looking at the data that I'm looking at, that in terms of the prices, they've stabilized," he said. "Anyone expecting a continued decline in average price will be surprised and disappointed."

Gregory Klump, July 16, 2008

I think this takes the cake because it comes from the CREA's chief economist who makes assertions with such certainty without explaining to the public what data was used or how he came to his conclusion. The confidence was there without any reflection on what was said in the past.

Anyway I update the chart a had posted earlier this year. Enjoy.

Quote of the day

From 15 real estate myths and realities:

Generally though, British Columbians, and Lower Mainlanders in particular, are pretty savvy about their property, the experts believe, with so much information out there about real estate, between Real Estate Weekly, the real-estate sections in newspapers, the realtors' Multiple Listing Service posted online and Home and Garden TV.

People in Vancouver are saavy because they listened to Realtors and HGTV!?!. I'm sure if more people in the states did that they would have absolutely no problems right now (sarcasm).

I know this is not Alberta, but this come from one of CanWest Global minions, the Vancouver Sun. It just reinforces how those set of newspapers are 'pro-establisment' and lustful for juicy ad cash. Other posts examining CanWest previous doses:

Power of the Press Release
What the MSM is serving
Calgary Home Sales
Saskatoon Thought Experiment
Spotlight Calgary Herald
Chicken Little

Update! (thanks tulipboy)

It appears the Vancouver Sun had "technical difficulties" with their comment section. By "technical difficulties" I mean the comments were overwhelming negative and are now disappeared.

Here is a link to some of those cached comments and the discussion has also been moved to Vancouver Condo info. Keep in mind the Vancouver Sun have the same overlords as the Edmonton Journal and the Calgary Herald, which makes it relevant to post here.

Quote of the Day

From Edmonton site WorkingTogether:

Most of the major analysts agree that within the next 3-4 years we will see a repeat of 2006 in terms of amazing shortfall of inventory. We can expect prices to see dramatic increases again at that time. Wouldn’t it be nice to be positioned to take advantage of those gains? And not have to fight in it to get a piece of property once it starts?

This is the first time I have heard this forecast from any analyst. Because of this I doubt it being agreed to by "most of the major analysts". When will we get back to selling homes on their own merits and not in preparation of some imagined economic shock?