* Single family Calgary metro new listings added for the month of May totaled 3,432…. Single family Calgary metro sales for the month of May came in at 1,368…

(ouch)

* Calgary metro condominium new listings added in May 2008 were 1,538… Condominium sales for the month of May were 577

(ouch)

CREB(R) President, Ed Jensen:

“Now is not the time to wait until the sale is over and then decide to buy”

(the sale hasn’t started yet Ed, but thanks for publishing the stats so we know the clearance sale is coming)

“The conditions today are perfect for buyers. We have a surplus of homes on the market”

(perfect to wait… not only is there a 5 figure surplus, but your own stats show its getting worse. Oh, conditions are perfect for buyers… perfect to wait for a year for the wheels to come off this mess. Or do what Ed want… buy into a surplus market before the price drops… good one)

“A professional REALTOR(R) understands what is going
on in the market and can help the buyer make an informed buying decision”

(that’s right… buy now, buy tomorrow, buy yesterday, buy again, buy, buy, buy, buy… great professional help)

“The Calgary Real Estate Board is a professional body of 5,752 licensed brokers and registered associates”

(Over 5000? Wow… I guess we have to continue buying at any price, at any stage of the cycle, or these folks won’t have a pot to piss in).

At the time IIRC CMHC could only pursue for a deficiency balance on a mortgage if it went thru foreclosure and was insured by them.

Quit claims and uninsured mortgages did not have the personal covenant you could pursue. That has not changed AFAIK.

I am an avid walker, runner, biker, and I commute to work via foot, and I can tell you that in:

In Killarney, Glengarry, Sunalta, Canaught, Bankview, Knob Hill, and Scarburo

There are an average of about 3 for sale signs per 1 block length of street, and “price reduced” signs outnumber “sold” ones.

And for anyone who doesn’t know, these are saught after areas in the SW, close to downtown with easy access to everything.

Who disagrees that house prices will continue to fall?: http://patrick.net/housing/crash2.html

What are their arguments?:
http://patrick.net/housing/crash3.html

What should you pay for a house?:
http://patrick.net/housing/prices.html

“So what should I do?”
Don’t take financial advice from realtors, lenders, mortgage brokers, or anyone else who gets paid only if they convince you to buy. Put in your own numbers and calculate what it would really cost you to own rather than to rent.

Where I believe the push will come from in Calgary is people upgrading to new homes. Now get this: In Calgary for the last 4 years it was a huge risk to sell your old house based on the promised delivery date of your new house by the builder. Builders were 3, 6, and 9 months behind schedule and offered no appologies. Plus anyway prices were rising. So rather than be outdoors, the motto was “don’t list until you have possession of the new house”. It was safer and you stood to make money anyway.

Well, the builders are starting to catch up. I have 2 friends myself that have possession of thier new house now, 2 shinny mortgages, and they can’t unload the old house. Of course the thought of cutting the ask price is still far from thier minds and it will stay that way because the ask price was somewhat baked in to what they paid for the new house. But eventually the burden of paying 2 mortgages is going to catch up with a few of these new home buyers.

I was looking at a house I was interested in. The owners have built a new McMansion and want to sell the old one. They paid $350,000 in 2000. They listed it for $820,000 and recently relisted for $800,000. I wish them luck because if I put the same money in bonds I can rent a similar property indefinately just on the interest.

But what I guess few are considering is that once the first seller throws in the towel, the drop will be rapid. This is because even a 30% correction (read “drop”) in house prices will still leave most people in Calgary with a well above inflation rate gains on thier house. They won’t loose money, just make less. For example the $800,000 house would sell for $560,000 and the sellers will still have a $210,000 profit in 8 years. That’s about a 6% annual return tax free, which is better than most investments. And that’s after a 30% drop!

Look out below I say. And most people will still be well in the money.