The Lull before the storm

The financial crisis of last several months has apparently been tamed by the collective intervention of central banks. There is little fear, at least on the north of the 49th parallel. Everything appears to be in control. Except, for some candid admissions by the Canadian central bank that our big boys are facing credit squeeze. May be it's to build a case for clipping the wings of the soaring loonie and helping exporters by potentially reducing interest rates in the coming months.
Back in the world of real estate, Inventory is still piling up in both Edmonton and Calgary, despite hundred of listing expirations every week. Edmonton MLS listing count is just a couple of hundred shy of 10,000. Comfree has close to 3200.
The number of rentals is steadily rising too, and rental incentives are back, at least sporadically if not as a rule. Barring some major financial or geopolitical event, I don't expect a panic outbreak in the next month or two. It's possible that something dramatic happens and people get afraid, but this invincibility of real estate investment paradigm was built over a long period of time, at least in Alberta. If prices do not fall for ten consecutive years (1997 to present), it's hard to argue with Pavlovs that the eleventh year can indeed be very different.
A lots of hopes are hanging on January/spring/summer/{your favorite month} market turnaround. And why not? Oil is making record highs and there hasn't been any major investment curtailment announced by any company due to proposed royalty revisions.

So if the fundamental story is intact, wouldn't the prices resume their ascend to infinity pretty soon? The only problem is that the fundamental theory itself is fundamentally flawed. Yes, oil sands did play a small part. But that's about it. Easy credit, rampant speculation and the global housing mania were the bigger factors in driving up the prices. As and when the public mood changes related to these, the level of oil sands investment incoming to Alberta will be irrelevant. Sometimes it is just astonishing to see the asking prices for very ordinary shoe boxes in Edmonton selling for over $400k. What fundamentals dictate that prices of such houses be so high in area of such vast expanse and copious raw materials? Alas, there are none.
So come the 'favorite month of rebound' and the rebound does not occur, I expect a lot of 'forced landlords' to try and find an exit. May be it will be too late then.
Remainder of 2007 may yet be the best time to sell Alberta real estate for a very long time.

Finally, thanks again for wonderful discussion, information exchange and useful links. I'll be posting more frequently once my work load eases off somewhat.