Tuesday, September 11, 2007

The waiting game is on

Not much going on, except for the same old....unrealistic expectations of sellers and nouveau landlords. Speculators and flippers would like to believe that they can ask for whatever they want so long as they can show a positive net worth contribution from their real estate holdings. Mark to market will be a slow painful process, both for speculators and bubble-sitters.
The mood on the street has changed. People are now talking of the 'old days' and unrealistic expectations. I've even heard from some people that 'this was coming!' I expect the chorus of 'I told you sos' to only get louder with every passing day that inventory rises in Calgary and Edmonton. Calgary is slowly approaching five months of inventory for single family homes while Edmonton is approaching the seven to eight months supply. Thousands of new condos and homes will be introduced into the market every month for at least another year.
I know a couple of people whose 'investment' properties will be ready this month. They booked these for 'investment' purposes last year. Now the day of reckoning has arrived for a lot of such people. These properties will need a buyer or a renter. At the prices they are asking for, they may find neither. But I doubt there are too many people who can pay multiple mortgages without getting hit financially hard. Especially when the average home is losing close to $500 per day in Alberta.
But all hope isn't dead yet. The expectations of a turn around later this year or early next year are still very high. Perhaps there will be a dead cat bounce for a month or two and pull in some more suckers into the real estate investment club.
Sorry for the less frequent posting. I'd like to post more often, but I've been crazy busy with work.
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