The other day Sheldon said to me: "It feels a little like it did at the end of 2005..." He reminded me of some properties that sat on the market for ever that just started to sell out of the blue in 2005, and related that to what is happening with some properties now. I didn't think much of it at the time, until I put together the numbers today. And wouldn't you know it...to me they look a lot like November 2005.
Take sales for example, they actually increased in November compared to October - that is not normal, and the last time it happened was 2005. From my perspective it's not just the fact that sales increased that is interesting, it's that after 6 months of below average sales we jumped back into the normal range:
There are other factors that feel a little like 2005... according to an article in the Edmonton Journal the oilpatch is ramping up again -- with $2 billion in land sales this year as a precursor to much more largely unconventional oil and gas development, with airports and work camps full, and with a growing lack of good staff available to work drill rigs, the picture is starting to look familiar. Alberta has the lowest inflation and highest job growth in the country, and is expected to lead the country in economic growth in 2011 at 3.5%.
Average prices continued to decrease in November, which is normal for this time of year. The question on everyone's mind seems to be: "What happens next spring?" Time will tell...
As always we will post a final analysis once the press release is issued from the REALTORS® Association of Edmonton.
I would agree! Great to see the improving market.
I’m not trying to be incendiary, but I am genuinely confused when you say Alberta has the “highest job growth in the country,” when the Edmonton Journal article you cite reads:
“While Alberta’s job market hasn’t kept up with gains across the country, Koustas expects ‘substantial’ improvements in 2011,”
and
“While Canada has regained all the jobs lost during the recession, Alberta has had a roller-coaster ride, with many new jobs being part time.”
Maybe you linked the wrong article? Anyway I think a much more accurate interpretation of that article is that Alberta’s job market suffered the worst during the downturn, but is expected to rebound faster if a recovery materializes as expected in 2011, yes?
Yes those were from other articles… inflation – http://www.edmontonjournal.com/business/Alberta+enjoys+nation+lowest+inflation/3873056/story.html
Job growth – http://www.edmontonjournal.com/business/Alberta+logs+highest+growth+country/3788168/story.html
Cool, thanks for clearing that up.
Your comparisons between 2005 and 2010 make for interesting reading. I suppose the most critical differences between the two years are that the 2010 mortgage arrears rates are roughly double that of 2005, while 2010 median housing prices are roughly 70% higher than 2005′s.
The logical question to take away from this scenario is whether or not economic growth can be strong enough to cause fundamentals to rise quickly enough to close the gap between housing prices before prices erode significantly beyond a small correction. It would be great if you could find something like this to post/link to, as the pessimistic scenario is easy to envision but a middle-of-the-road scenario where falling prices are caught by rising fundamentals is more difficult to conceptualize.
Don’t get your mouth frothing yet. This is in keeping with a bear housing market. During most of 2010, we say a decline in housing prices. While most months in 2011 will see a decline as well, some will not. One or two months may even see an increase.
But the unmistakable general mood and expectation is one of decline in housing prices, which will proably protract for another 24-36 months until 2014.