Housing crash deniers ??? - Continued

[Eric Fernwood]

The original thread Greg R. started on the topic has been closed for further contributions, so I put my input in this new thread.

Hello @Greg R

Crash deniers? Interesting title.

Blanket statements by experts have an advantage. They are usually just clickbait. Such statements are purposely vague enough that they are likely to be correct in some location(s) at some point in time.

However, there are fundamental flaws with such blanket statements regarding real estate. Real estate is local, not national. One market may perform well while another does not.

What I feel is a more accurate assessment is the following:

• Prices of properties in locations with solid fundamentals before COVID will likely have minimal, short-term decreases.
• Prices of properties in locations without solid fundamentals before COVID will have significant. and long-lasting price decreases.

Locations with solid fundamentals met all the following criteria before COVID (2020).

• Prices and rents rose faster than inflation
• Both state and metro populations were increasing
• Low crime rate
• New companies frequently moved into the area setting up operations and creating jobs.
• Operating costs were low. This includes property taxes, insurance, and income taxes.
• Did not have rent control or similar regulations.

Locations that met all the above are likely to have small price decreases but will quickly rebound. Locations that did not meet all the above conditions will likely have significant price decreases and will take years to rebound.

Perform your own due diligence, do not take these blanket states on local situations and anything more than clickbait to attract eyeballs.

[Anthony Therrien-Bernard]

Quote from @Bo Fric:

I really like this analysis. It sounds very similar to our situation in Calgary where migration is excellent, inventory is abysmal and new growth sectors are emerging. Yet all the doom and gloom people read, particularly about other markets, is keeping our market stagnant for now. I agree with the sentiment for our market, that any decrease in interest rates could lead to a surge in appreciation.

Definitely, Calgary is a good example of a real estate market that had strong fundamentals pre-covid and was already recovering from the last oil&gas downturn.