2/9/2009 12:17 PM
Maybe I haven't posted too much lately but it is because I am keeping a close eye on the economy and on what is going on with Real Estate
For the last several months I have been keeping a pretty close eye on both the economy and also real estate. First, on the economy, yes everybody is sick of the bad news. My advice, tune it out as nobody has a crystal ball that isn't clouded with their preconceptions and biases. The economy has never been here before. History is not going to give anyone answers. The only certain thing is that change is inevitable.
On the real estate front is where the lies are most insidious. It always starts off with , "well we expect to see some declines but Canada doesn't suffer from the same problems as the US". It is at that point the lying is the absolutely worst. Are you trying to tell the world there are no greedy types in Canada?
Let's look at Calgary for instance (convenient for me since I currently reside here). Is it possible that Calgary could see the same kind of price declines as say Las Vegas (over 30 percent in one year)? I say absolutely YES. Here is the reason, both Calgary & Las Vegas share 2 things in common. First, people buying on speculation in hopes of making huge profits. Second, people flooding the area from other regions to cash in on the economy.
So what happens when all these speculators can't flip these leveraged investments in real estate? The price goes down, let me say that again , the price goes down. So what happens when a region's super hot economy cools as it now is in Calgary? The price goes down!
Calgary might not suffer from subprime mortgages but it does indeed have a bad case of speculators. So in short don't believe these mild predictions of corrections. Yes, this is just my opinion and may not be grounded in scientific fact finding, but if you reason it out, you might come to the same conclusion.