Thursday, June 21, 2007

Is this it?

Perhaps. In Edmonton at least, the prices have fallen by around 14k.
And on the other side, our friend Bob Truman has brought back some memories from the past. Perhaps, he has a point. Last year too, bears were complaining that the sky is going to fall. This year is no different. But I think the biggest problem is that the wolf is sure going to come one day and based on a few casualties reported this month, the wolf (or the bear) just might have arrived!
What do I make of this situation? I'm very surprised with the speed with which prices have deflated in Edmonton. In pretty much all other places, it took a while and followed a pattern of slowing sales growth, build up of inventory and gradual price decreases. But Edmonton market has probably been the craziest of all, going up nearly 100% in last 2 years. So a dramatic fall won't be surprising. And let's not forget, there has been no external event causing this, except for a very mild increase in interest rates. How will this market respond when (heavens forbid), the price of oil were to fall, government spending were to be curtailed....that is if something were to go wrong.
But then, who knows, there are still some 'bigger fools' still lurking in some bus convoys ready to make their first million from the Alberta boom.
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