Sunday, June 10, 2007

Alberta Real Estate 'Truths'

1. Real Estate always goes up.
2. Buy now or you'll be priced out forever.
3. Alberta market which has gone up almost 300% in several cases in the last 3 years will not go down from the current levels. The worst case scenario is that it will go down by 10% or so and then stagnate before starting its upward march.
4. We are running out of land in Alberta. Not all types of land, but affordable, residential land.
5. Oil prices will never go below $50 again.
6. The dramatic surge in the prices in the last few years was a result of robust fundamentals that merely brought Edmonton and Calgary in line with prices in other 'big cities' such as Toronto and Vancouver.
7. Alberta is different as we have oil sands and our real estate prices should reflect that.
8. There is no speculation in Alberta market. The majority of buyers are buying their primary residences, either for the first time or upgrading. May be some wealthy Boomers are buying their second/third vacation homes.
9. Everyone wants to live in Alberta, or at least get the $12/hour jobs offered here in plethora.
10. Interest rate hikes or US recession are unlikely to have any impact on Alberta economy. Even Chinese recession is unlikely to slow down the Alberta boom.
11. The current dramatic increase in inventory is a result of usual summer slow down in Sales and is merely reflecting a return to the 'regular' and more balanced market in which buyers have more choice. Prices will rise with a vengeance by autumn and continue their march to infinity thereafter.
12. Increase in housing prices is great for a locale. Lots of companies will have trememdous interest in opening offices here once employers realize that they won't have to pay any wages to their employees but can pay them in the form of 'assignments' on latest condo projects in Airdrie or Fort Saskatchewan. Just look at start ups and other companies around Route 128 in Massachusetts and how it has been flourishing since the dot com bubble burst and the real estate bubble inflated.

Please add any other 'truths' that you might have heard from the main stream media, your flipper friends and neighbors, real estate agents, bank managers, loan brokers builders or other variants of perma real estate bulls.
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