http://www.cbc.ca/canada/saskatchewan/story/2008/12/05/deficit.html

haven’t posted in a while, think this means the boom is over and house prices are in for another 20 years of stagnation?

Apparently homes are once again “affordable” in the vast majority of U.S. markets where steep declines over the last few years have brought homes within reach of the average American. With a few exceptions, most markets are “fairly valued” and many are “undervalued.” Unfortunately, recent economic trends seem to indicate that prices are likely to fall even further before the U.S. housing market turns around.

http://tinyurl.com/6n7tbb

I’ll agree that it does sound like a wacky idea. Imagine, the American tax payer taking some of the bank’s money and putting it in their pocket. Hmmm.

this bit is courtesy of Lani over at Agent Genius

http://tinyurl.com/6xut2k

This is Guaranteed to make you shake your head and wonder at how stupid things get in the world of Real Estate.

Anybody got some tylenol?

http://www.edmontonjournal.com/business/fp/patch+output+price+hits/1033887/story.html

In a report to clients yesterday, Merrill Lynch & Co. estimated almost 800,000 barrels a day of crude — almost 30% of Canadian total output — could go “off line” if oil prices dip below US$38 a barrel, the break-even price for some projects. Another 800,000 b/d could be shut in if oil falls below US$30.

Unfortunately jobs will be lost in the west.

Inflation adjusted oil prices

http://www.inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm

But historically, oil should or could be around 40 a barrel if not for the credit bubble and speculation.

You are assuming that baby boomers own their houses. Baby boomers were some of the biggest users of home equity lines of credit, second mortgages ect. This sounds horrible, but the idea of baby boomers leaving in stretchers will someday be a reality. They will not live forever! Millions and Millions of boomers will die over the next 20 years. Leaving how many homes empty?

The second point I want to make it that how many boomers were banking on selling there house downsizing and living off of the profits? Far too many boomers have saved nothing and when the realization that there pensions will be reduced and there own investments are worthless it can only end badly.

Something to think about.

Nix

Thanks very much. Those profiles reside at http://www.teamfisher.com/Neighbourhoods/page_1719893.html

I have freinds that purchased brand new homes in 2007 – January in Stonebridge. They were sticker shocked at that time to pay $220 for a 3 br bungalow. Not the two story ugly skinny house either.

So, how is it that builders – and I am in no way being critical, are claiming that they will be loosing big money if they have to drop their prices much further? I am curious as I know that cost to build could not have rissen in dirrect correlation to the cost of housing. The same house now would be $399 in stonebridge.

So, even if costs to build rose 50%, they in no way are representative of a major loss to homebuilders.

I agree with others that people have lost complete sight of the fact that houses in Saskatoon only 2 years ago were about half of what they are now. So, maybe there are lots of jobs, maybe there are lots of people moving to Saskatoon. My opinion is that the ‘investor’ group initiated a frenzy in Saskatoon. And, it coincided with great things happening for the province. Lots of positive news. Overbids were the killer to this situation. People got overinflated egos as well for the price of their home.

For simple calculations – assume that a purchase of 300,000.00 declines 10% in the next year. That’s $30,000.00. If you rent – a really nice spot for $1500.00 – that only costs you $18,000.00. And, if you buy a house at that price you arent going to touch the principal of that mortgage for at least 3 years. So waiting, although there is a percieved loss and possibly attributed to home ownership in themselves that are quite valueable, will not really cost you anything.

Based on some of the research I have done, a drop of 10 percent is modest. Many are predicting drops of 30-40 percent as the baby boomers retire and sell off their big homes for retirement pads.

So, then, my question is back to the beginning. How will homebuilders adjust to this? Has cost of building really increased to the current level? I have looked at building, and buying new. It will cost more to hire a builder. I just don’t understand why.

“Saskatoon’s rate stayed unchanged” was from newstalk 650. I don’t have a link for cities just provinces. Saskatoon possibly has gone up

“Saskatoon’s rate stayed unchanged”

What am I missing here George. The chart you posted seems to indicate a 3.6% year-over-year increase, and a .4% month-over-month increase in full time jobs for Saskatchewan.

The head of the government’s financial system rescue effort said Thursday the Treasury Department is considering a program to encourage banks to make mortgage loans at low rates to help revive the battered housing market.

Under the proposal being pushed by the financial industry, Treasury would seek to lower the rate on a 30-year mortgage to 4.5 percent by purchasing mortgage-backed securities from Fannie Mae and Freddie Mac. It’s unclear exactly how much the plan would cost.

http://tinyurl.com/5efeu9

http://business.theglobeandmail.com/servlet/story/RTGAM.20081205.wjobs1205/BNStory/Business/home

Saskatoon’s rate stayed unchanged

Labour force: stats can

http://www.statcan.gc.ca/daily-quotidien/081205/t081205a4-eng.htm

‘Challenge’ to balance Sask. budget: Gantefoer

http://www.thestarphoenix.com/Business/Challenge+balance+Sask+budget+Gantefoer/1035600/story.html

“We’re certainly not going to have a $3-billion surplus next year going forward. In fact, it’s going to be a challenge to make sure we’re in balance and we may have to draw on the Growth and Financial Security Fund to do that. So it’s a different world,”

I think our prov government is smarter than they were letting on. They know this downturn will be long and deep. Good for them to save the money for a rainy day.

Video here

2007 price 700k

2008 price 499k

That is some haircut

I agree, deflation will be the problem for the next while. Houses, cars, electronics, fuel etc, will all come down in prices. I think we will see ZIRP or close to it within a year. A couple of years down the road could see the a swing the other way.

Mark,

Very true, I try to give an educated guess, but it is the same as a wild ass guess!

“Would high inflation and debased currency not lead to higher housing prices at least in nominal terms as the prices adjust to the new value of the dollar?”

Technically yes, the prices of everthing would rise nominally. There has been alot of talk about potential currency debasement, but I can’t say I’ve come across any information about that as it relates to Canada. Wiki has a prety good explanation of what a (hyper)inlationary scenario is and what might cause it to occur. If incomes don’t rise at the rate of inflation, this can quickly become a real problem.

http://tinyurl.com/dtwx8

I find it most helpful to think about inflation as a “tax”. Right now, IMHO, inflation is the least our economic worries for some time to come. If such a scenario were to happen, however, people who have the cash on hand to buy things that will retain their store of value even as the currency devalues will do best.

Oil: $25 Is The New $200

It is quite funny how all these predictions, on the way up, and on the way down, simply appear to be nothing more than a pencil and ruler applied to a piece of graph paper and a line drawn continuing whatever trend is current. I remember asking someone from Calgary last summer if there was one analyst out there in the world predicting oil would ever go below 80 dollars again. He said no. Remember, when it hit 100, people said 125. When it hit that, people said 150. Then they drew a line to 200. Although we don’t have much lower to go, it’s funny why we should put any credence into any projections. Even I can draw a line showing we’re heading to 25, then 10, then 5. Does anyone really, despite their credentials, have anything better than a wild guess?

re: Greater Toronto sales. Holy crap! %50 drop yoy. 3640 sales with 27,037 listings!

The median price fell from $325,000 last year to $312,250 last month, a decline of 4 per cent. The average price fell by 6 per cent to $368,582 from $393,747 in the same month last year.

And the “experts” say that Toronto will see a very small decline if any, while they say that Saskatoon will see drops of up to %50. If the economy does not come crashing down here, we will see drops here but I am going to say they won’t be as bad as Ontario.

Toronto had 259 condo projects in the last couple of years that actually made them the condo capital of North America. We know how overbuilding and speculation has treated condo buyers in Florida.

After being outraged the Liberals made the same deal with the Bloc that he did in 2004

http://www.liberal.ca/story_15511_e.aspx

He’s like our own mini dictator.

Final comment of the day, promise

Kind of thinking a bigger gas tax wouldn’t be so bad if Suburbans and Hummers are still flying off the lot