Friday, May 9, 2008

Why buy Real Estate in Calgary

Despite lumming times, the province of Alberta is uniquely placed to weather almost any storm. Because I do not want to give some people the wrong impression with my initial post to this blog, please do yourself a favour and read the following:

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Why buy Real Estate in Calgary

• The market has made a correction. Why would the market make a correction? In 2006we had the highest number of people decide to build a new home. All of those new homes began being ready in late 2007. Now those same people had to put their home on the market in order to take possession of their new one. This allowed the inventory to go from 3500 to 15,000 homes over night. This created a large supply, but if you noticed the amount of homes buyers purchased did not change much from 2006, we simply just had more for buyers to choose from. As a result the highly motivated people who run the risk of owning 2 homes have been willing to reduce their price to get their existing home sold. We’ve seen the same thing with condos.

• Will the market go down any further? Not likely, for that to happen we would need to start seeing large amounts of people sell for less then they paid for them. The only way the masses will start selling their homes for less than they paid for them is if they can’t make the mortgage payments. If they can’t make the payments, then the masses are now getting laid off. To see the masses getting laid off would mean that we have a problem in the Oil sector of our economy.

• Let’s discuss Oil. I have numerous articles that talk about Peak Oil. The days are gone where we can buy cheap oil. Why, because the countries that used to be able to provide it no longer have it. This makes Oil in the sand very attractive. Alberta has the infrastructure to take the oil out of the sand for a reasonable cost of about 22.00 per barrel. As we all know this has brought tremendous amounts of money into our Province and will continue to do so.

• Why is Oil so high and will it go higher. It’s high because the demand for oil is at the highest level its every been. China and India have increased its consumption by 23% in the past year. China has 1.3 billion people, India almost a billion; they want oil more than ever before. The outlook is that oil will hit 200.00per barrel before long.

• All the big oil companies are aware of this which is why they continue to invest in our Oil sands. They are now going to build a pipeline to the US from Fort Mac to increase production by 3 times the amount.

• Interest rates will remain low. With the dollar high we can’t afford to raise rates and send Ontario into a recession. This will allow more Albertans to afford housing.

Bottom line for Real Estate in Alberta/ Calgary. As long as people are making money and have a job then the demand for Real Estate will stay high. The outlook is good, which makes right now a very good time to buy.

Rob Vanovermeire/Broker
Maxwell - City Central


John Prince, Alberta licensed real estate agent, MaxWell City Central – Crowsnest Pass. Serving the Crowsnest Pass and area. Call me directly at 403-564-4518 or by email at: johnprince@shaw.ca.

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