Remember about 6 or 8 months ago when the US National Association of realtors (NAR) were all saying that "now is a good time to buy because there is some real value out there after prices have corrected".

Bottom line (my take): It's NOT different here in Canada. It's basically just the same, and prices are going to drop for a long time to come but shorter than US.


After a 10 year house price boom, it is unlikely that the subsequent bust will be very short (ie 1 or 2 years). Historically, housing busts have lasted many years. Since we just finished the greatest housing boom in history, both in length and especially in price increases, it is likely that the subsequent bust will be the greatest in recent history also.

Check out this article in today's NYT:


Home Prices Fell at Sharper Pace in October

http://www.nytimes.com/2008/12/31/business/economy/31econ.html?_r=2&hp=&adxnnl=1&adxnnlx=1230663114-gHlQuxaFT/O+m7Js2Zjy1Q


According to the latest data in the C/S index in the US, price declines are now accelerating in most cities.

In San Diego, the peak was Nov 2005, so now we are 37 months into the decline and prices continue to drop (Oct was 36% down from peak).

In Phoenix, the peak was June 2006, so now we are 30 months into the decline and prices continue to drop (Oct were 41% down from peak)

In Miami, the peak was Dec 2006, so now we are 24 months into the decline and prices continue to drop (Oct was 38% down from peak)

Where are we in Calgary? In Calgary, prices peaked in July 2007, so we are only 18 months from the peak, and prices are only down 18% from the peak in sfh and 16% for condos.

Also, our bubble was similar in size to the US bubble cities. San Diego prices peaked at 238% of 2000 prices; Miami at 280%. Las Vegas at 234%

In Calgary, prices peaked at 258% of 2000 prices, near the top of US bubble cities levels.

But Calgary has oil and gas you say? Guess what, it also had oil and gas in 2000 and 1990 and 1980 and 1970.

Mortgage rates are low you say? In the US, you can get a 30 year FIXED rate mortgage for around 5%, it's not helping the bubble cities re-inflate.


I don't know too much about GTA price history.

Home sales slide to lowest since '96

http://www.calgaryherald.com/business/Calgary+home+sales+slide+lowest+since/1150209/story.html


Turner said the Calgary market went beyond the point of sustainability and the correction was only inevitable when people were not able to afford homes on their incomes, oil prices collapsed and cheap mortgages were taken off the table.

"To talk about a rebound in the middle of 2009 is a complete myth. We are in the middle of a North American meltdown, which is not going to be rescued in 2009," said Turner.

"Many people took their houses off the market waiting for the spring. One of the big surprises of 2009 will be that there is no spring market. It will be dismal."

He predicted listings are going to explode in Calgary beginning in March, with the greatest number of listings in April and May. He expects local prices will drop a significant 15 per cent but won't hit bottom until 2010.

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Remember:

In 2007, a Calgary Herald headline read: $500,000, 0 down, 40 year mortgage. A glowing couple hugging joyfully was the picture under that headline.

Today, the Calgary Herald biz headline, shows another hugging couple who is not as glowing, but just surprised that their home isn’t going to sell of the $730k they thought it was worth.

My prediction: End of the year, it will be another couple hugging each other, and the headlines will read: “FORECLOSURE”.

and maybe, just maybe if I wait long enough, I might see a headline someday that might read something like this:

Employed homeless man lives on banks of bow river, uses savings to buy first house……..(ever wonder?)

This is sad and honest reality. This is a typical North American scenario of well educated working poor, guy has a mortgage a nice house, a nice car but is living pay cheque to pay cheque. There are millions of people like this just holding on means 2-3 paychecks away from complete collapse.


http://www.greaterfool.ca/2009/01/15/not-too-proud/#comments

I am 38 years old, I have no debt but a Mortgage 155K and car loan 15K. I am a long time blog reader Garth first time poster and appreciate your honesty, thank you.

My mortgage is somewhat low compared to some friends that bought in the last year or 2, due to the fact that I have been paying it weekly for the last 8 years as well as adding an additional $75.00 per week and what ever savings I had at the end of the year. I have now under 11 years left to pay!

Today I was told with about 300 or more other peers to start looking for work as I will be out of a job in the next 2 weeks. I work in the EPC world (Engineering, Procurement and Construction) specifically Oil & Gas industry.

We are a single income family with 2 very young children both under 3 years of age.

I was always taught to pay down debt, pay down that mortgage and I have. Sad thing is I have no savings! UI will not be sufficient and needless to say I have never been on UI either. I will look for work immediately, but friends and colleagues that have already lost their jobs are telling me there’s no work .

I kept a brave face through out the work day and even laughed. When I got home the mood somewhat changed? As I tried to sit down and have dinner with my family, I couldn’t. I felt “let the little ones have my share, I’m fine, I’m not hungry”.

Then I left the dinner table, sat down in our family-room put my hands in my face and cried. Only to hear my daughter say “mommy, daddy have booboo”.

I am not too proud to ask for work, if any of you have suggestions or leads for employment please post here. I have 16+ years experience in my field of Procurement.

Garth I apologize for using your blog as a means to find work, if you decide to delete this post I will understand and will wish you no ill will.

Thank you all in advance,