Weekend Open Thread

It isn't Friday yet but we are crazy busy getting ready for our move. I've been meaning to do some posts but didn't have the time. Here's a compressed version of some items of interest that would normally require a full individual post of their own.

- Very early in January, we questioned "Where are the buyers? And the answer given was- they are all sitting in front of their fire places and hiding from the cold weather. That weather is largely gone but the buyers haven't come yet. The question therefore merits repetition. Where are the buyers? It's end of March and so far sales are off by more than 40 percent YOY and barely equal to the Feb 2008 levels. Is this the turn around everyone was counting on? Is rest of the buying season going to be different?

- The more things change, the more they remain the same. Perhaps, the Calgary Builder Association president needs to be given an introduction to the large write offs builders south of the border have had to take due to 'land banking.' But out here, protected by the 'Canadian shield', ridiculous prices paid for land by Calgary builders is touted as one of the reasons why Calgary prices are unlikely to fall. Of course, rising land prices should be one of the primary reasons for rising housing prices in the middle of prairies with unlimited land for hundreds of kilometers in all four directions. But common sense is the first casualty in a mania.

20 months Supply of Condos in Calgary
- I don't know the extent to which Genworth's balance sheet contains toxic sub prime garbage, but they are trying their best to deny that there's any bubble in Calgary condo market. We all know that there's no bubble after all, right. There are only 3000 condos for sale in Calgary and the market has just experienced its first YOY decline in a long time. And there are only 9000 condos under construction in Calgary as of January 2008 as per CMHC Feb 2008 report for Calgary. At the current rate of sales of very optimistic 600 per month, there will be supply of at least 20 months. That's right, there's no bubble. The more important question that everyone should be asking is- just how many 40 year subprime mortgages has Genworth doled out to those making the best investments of their lives. It is quite pathetic that main stream media refuses to do any homework before rehashing the propaganda from the Real Estate marketing machine. It's especially pathetic given the recent happening south of the border. One would expect that if someone is denying that there's a bubble, someone would do some research. But the party must go on otherwise there will be a problem in the food chain.

40 months Supply of Condos in Edmonton
Edmonton is in even worse shape with over 9500 units under construction as of Jan 2008 (as per CMHC Feb 2008 Edmonton report) and current inventory of around 3000. At the current sales of around 300 per month, there will be more than 3 years of supply. But there are no bubbles.

Everyone have a great weekend!