Saskatoon real estate: Week in review (December 8-12 2008)
As expected, new Saskatoon real estate listings continued to taper off this week falling to their second lowest level for any week this year. A total of 58 residential properties were offered up for sale including 30 single-family detached houses and 15 condominiums. 26 residential listings were cancelled or withdrawn and just 10 of those made a repeat appearance as a new listing on the Saskatoon MLS system. Total active listings continued to slide for the seventh consecutive week dropping 28 units from the previous week to finish at 1,388 units including 850 houses and 449 condos, and reaching its lowest level since the week of June 16-20.
As residential sales activity picked up over the previous week, the listings and sales lines on our graph reached their closest point since February of this year. A total of 46 residential property owners managed to firm up a pre-Christmas sale. 28 houses and 17 condos found a new owner over the course of the week. This was one of the better weeks for condo sales that we’ve seen in some time. The category managed to capture 37% of total residential sales, compared to just 15% the week before. Since the first of September condos have accounted for less than 21% of total residential unit sales.
74 price changes were recorded this week, a fairly sharp increase from 50 the week before. Seller motivation remains high. That motivation is certainly reflected in the balance of this week’s numbers.
Prices took a substantial dive this week according to all three of our value indicators. The weekly average fell sharply to just $247,022, down from $270,226 the week before as it reached its lowest level since the week of February 11-15, and its third lowest level for the entire year. The six-week rolling average dipped to $275,914 from $283,832 the previous week. Finally, that stubborn four-week median price dropped from the sticky levels we’ve been seeing for about three months time, falling to $256,250 from $269,950 the week before and reaching its lowest level since the week of March 10-14.
So, what the heck happened to Saskatoon real estate prices this week? There’s no doubt that the unusually high number of condominium sales brought the averages down, but still, the average selling price of a Saskatoon house also came in sharply lower compared to the previous week falling to $257,536 from $279,331. Interestingly though, the average size of the houses that traded was just 1,123 square feet, compared to 1,200 square feet for those which traded the week before. Given that the average cost per square foot for a Saskatoon house was $242 in November, nearly $19,000 of that difference can be accounted for in the size difference over the two weeks. Are higher condo sales and smaller house sales an indication that some first time buyers are beginning to get active again? Only time will tell.
Regardless of the types of homes and the sizes of houses that traded, there’s little doubt that Saskatoon home sellers who were fortunate enough to bag an offer went all out in an effort to close the deal. The average underbid soared to $19,717 and reached its highest level this year. The percentage of home sellers who completed a sale within $10,000 of the asking price did see an increase from 41% last week, to 47% this week. At the same time, there was a sharp increase in the percentage of sellers who accepted an offer that was more than $20,000 under their list price. The $20-25K category saw an increase from just 3% last week to 11% this week, while the over $25K category moved from 15% to 18%.
I expect that similar activity will be the order of the day through the balance of December. From this point forward, buyers are in extremely short supply as the focus shifts from home buying to holidays. At the same time, seller motivation is likely to reach its peak as Saskatoon home owners put a sold sign at the very top of their Christmas wish list. If you have decided that you’ll purchase a home in the next sixty days, these next three weeks may present an opportunity to grind yourself a good buy. Once we get through this year sellers may be encouraged by an uptick in buyer activity that we would normally expect over the next few months.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
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Norm Fisher
Royal LePage Saskatoon Real Estate
There's 82 Comments So Far
April 23rd, 2009 at 2:11 pm
I think 45 sales this week is really good for the market. I am pretty surprised at this number. And finally, prices are accelerating downward to be more affordable. 18% of all sales are underbids of 25k or more. This is significant. Some buyers and some sellers are kinda getting it. With so many homes out there, “grinding” may replace the “bidding wars”.
Maybe some buyers will grind 25% off the list from 15 or so different sellers. I expect some sellers are bleeding cash, a few may bite. This cold weather and the holidays will have a big impact on Dec numbers, me thinks.
This past week has proven that our provincial boom is over. I was hoping it would last longer and we could get the provincial debt paid off. Oil and gas have tanked. Potash corp, and Agrium, some of the biggest players in our provincial economy have announced slowdowns with potential layoffs. Construction has slowed down considerably. And country wide, the BofC has warned of mounting foreclosures because of high personal debt and job losses. Add in the eroding of confidence in the Big 3 which will have an effect in Saskatchewan. But,people may just go and buy honda or toyota, however.
Retail sales are still very strong but I am skeptical about that because part of it is being funded by credit. How much, though? The first quarter of 2009 will be a tell sign.
River landing and potash expansion looks like they are still a go, but still a bit speculative. And for me, this will be the tell tale of how well we weather this financial storm that will last a couple of years. If they go ahead, we will do OK, if not… well, not so well.
The labor shortage we have right now, might be a blessing in disguise in the near future.
April 23rd, 2009 at 2:12 pm
George,
I had heard that the PCS production cuts have been part of their plans, even well before the economy hit the ropes. Do you know if that’s accurate? As for the planned expansion, hopefully these people have some foresight that can see beyond a couple of weeks time. They just announced the expansion.
River Landing? Rumour has it that they’ve secured “refundable deposits” on most of what they have to offer, at least the initial phase. The taking of an excavation permit last week is a good sign but they have to cough up about $4.2 million for the land by January 19. I suppose that will be the step up or step out date. If they are not ready to complete the purchase we’ll know we have a problem, but they’re not likely going to firm that land up if the buildings are the least bit tentative.
Let’s hope all comes together.
As for jobs, that will certainly be our major advantage provided things continue to be better than average. There are 7,696 jobs advertised on saskjobs.ca today including 1,900 in Saskatoon. Seems to me that I read in the paper last week that a majority of Saskatoon businesses hope to expand their work force in 2009. If PCS comes through with the expansion plan they will probably start getting their ducks in a row. With one of the lowest unemployment rates in the country you have to think that a lot of these jobs will be filled by out of province people who are losing their jobs elsewhere. Lower housing costs and lower provincial taxes should help.
April 23rd, 2009 at 2:12 pm
What happened to the condo prices, Norm?
Just wondering if they’re dropping — which is what one would expect…
April 23rd, 2009 at 2:12 pm
jrochest,
The ones that sold over the past week averaged $229,706 which is above November’s average of $222,834. December’s month to date average is $226,913. I know there’s still a whack of this stuff for sale but I’m actually wondering if they won’t start to stabilize some, at least until rents take a hit. I think there are condos available that would now be cheaper to buy than to rent, or darn close to it.
April 23rd, 2009 at 2:16 pm
“This past week has proven that our provincial boom is over.”
Based on a few hundred ‘potential’ layoffs? As I understand it, potash prices remain at record levels, and what is going on is mostly due to an inventory backlog that is considered short term. Some of this is due to the credit crunch I belive. Potash companies are slowing production until the backlog clears, but still planning massive expansions in the face or record prices and anticipated strong demand. Even oil started to creep a bit. Once all these stimulus plans kick in in the new year, I imagine oil will be back in at least the 60 to 70 dollar range.
April 23rd, 2009 at 2:16 pm
I agree with Mark on potash. There will always be a huge demand for potash. Eating isn’t an option so I bet coutries like India and China who require potash for their crops will keep buying. PCS, Agrium, etc are cutting back on production to keep the price of the commodity at a sky high level, local farmers of course are being gouged at $900/tonne.
George- Interesting concept on the grinding-buying concept.
April 23rd, 2009 at 2:16 pm
Mark,
I think the boom is over, there is less optimism going into 09 than there was going into 07 or 08. But that does not mean we can’t have steady but small growth going forward. There are some great things going on here and if half of them get the go ahead, we should be smiling.
One thing I have read and have been thinking about that is very relevant to RE is deflation then inflation. Some commmentary from others would be helpful.
As I see it now, we are seeing deflation all over. Electronics, cars, homes, appliances, gasoline, you name it and it is cheaper now than 6 months ago. And this is a time when the BofC is flooding the system with billions almost weekly. In normal times this injection of liquidity would lead to higher inflation and higher prices. But these are not normal times and when banks are getting the money, they are hoarding it and not lending. So even though more money than usual is being printed, it is not actually going into the money supply. The printing of money has not made up for the loss of credit….yet. So for the time being we are experiencing deflation. If and when the credit markets improve, this would be the time when deflation is over and high inflation has started. Governments all over the world are printing money like crazy to inflate their way out of this mess.Leading to double digit interest rates. How long deflation lasts and how high inflation rises is anyones guess.
This is how I see it and I am probably wrong but some help would be beneficial. Thanks
April 23rd, 2009 at 2:17 pm
George,
I don’t know much about inflation, deflation or recessions. It seems logical to me though that deflation would be an expected consequence of recession, at least in the early stages. Businesses that didn’t have the foresight to plan for change will need to slash prices to get inventories under control. Even in periods of low interest rates, 200 shiny new automobiles sitting on a lot eats away at your declining profits pretty quickly.
Came across a blog today that I found really interesting. I think you would to George. It’s written by Greg Swann of Bloodhound Blog.
“Hope and despair at the onset of economic recession: Who cares about the tunnel? All I can see if the light…”
http://www.bloodhoundrealty.com/BloodhoundBlog/?p=6126
April 23rd, 2009 at 2:17 pm
17 is an astonishing jump from 5 condos a week, almost wonder is some one bought multiple
Good to see the average price drop, I think I was one of the ones to predict a $240,000 mean by year end! Though admittedly this week was likely an outlier, but still fits to an overall general trend of a slow gradual drop in prices (ie 6 week average is a nice evened out graph)
With so many listings being cancelled, I wonder how many specu-condos are just waiting to be re-introduced in the spring? Hopefully, they can instead be rented out to ease the rental crunch, created in part by speculation conversions.
Buyer, the “eating is not an option argument” doesn’t really hold for potash, http://www.thebench.ca/?p=210 as potash has actually lost value against inflation over the last half century, unrelated to changes in world population. Doesn’t mean it can’t do well, but as the links show, has done quite poorly in the past in the face of more substantial population increases than we have right now.
April 23rd, 2009 at 2:17 pm
Hey George,
Is there anything specific about the deflation/inflation issue you’d like feedback on? Timing?
Norm,
I’ve come across Gregg Swan’s blog in the past. I can’t quite get over this article from 2006 outlining why Gregg thought it was a fantastic time to buy in Phoenix. Phoenix prices are down 35%+ since he made that call, but perhaps I ought to give him another chance.
http://tinyurl.com/2vk4w5
The comments section is “interesting”
April 23rd, 2009 at 2:18 pm
Nick,
The sold listings show one agent as having sold two. Possible that those were the same buyer but the rest were sold be different buyers agents.
With so many listings being cancelled, I wonder how many specu-condos are just waiting to be re-introduced in the spring?
No doubt. I’ll also mention that I’ve noticed some of these conversions are actually cancelling sold units. The normal process is to pick a price and stick with it. I suspect that they’re doing some wheeling and dealing now and don’t want to report their selling prices.
Crikey,
I don’t know Greg but I have read a lot of what he has written. Clearly, he is a brilliant writer who is not afraid to share his opinions. I don’t agree with all of them, but I don’t doubt his sincerity either. I’ll bet he’s learned a lot about real estate crashes since he wrote that post in July, 2006.
April 23rd, 2009 at 2:18 pm
Just curious to know if anyone thinks that we may see some buying activity based on the low interest rates. Sounds like the US may go to zero this week. With the risk of inflation down the road, would people be looking to buy if they can knock 10-15K off the price and lock in around 4.5%?
Of course people may want to see how low prices go.
April 23rd, 2009 at 2:22 pm
Existing home sales drop 12%
http://tinyurl.com/5973fo
“The number of existing homes sold in November fell 12.3 per cent from October, marking the second consecutive steep decline in a weakening economy, the Canadian Real Estate Association reported Monday.
Seasonally adjusted, 27,743 units were sold in November, “the lowest level for monthly activity since January 2001,” CREA said.
“Bank of Montreal economist Michael Gregory had expected home sales “to slip a bit” in November, after plummeting 14 per cent in October.
“Large job losses now add to the housing market’s woes,” Mr. Gregory said in a research note.
“The latter also include ebbing consumer confidence, tightening mortgage-lending standards and the legacy of more stringent mortgage insurance guidelines,” Mr. Gregory said.
It looks like the brunt of the declines were in BC, AB, and ON, which is not at all surprising.
This also piqued my interest:
Tories set to add forestry, mining to bailout list
http://tinyurl.com/5a3vug
There’s no provincially specific information that I could find- hopefully we’ll get some more information before the budget comes out on January 27th.
April 23rd, 2009 at 2:25 pm
hello
I think we will be having lots of people coming from other prvovinces after Christmas. we all can see that saskatchewan still needs lots of people to fulfill the labour shortage.Housing prices will be stable in 2009 in saskatchewan since bank rate is very low now.
April 23rd, 2009 at 2:25 pm
I know that in mining and oil and gas our province has taken a major hit. While most mining and exploration companies are not laying off permanent employees yet, many of them are not hiring or at least not hiring full-time staff. This is a big change from about a year ago, when companies were hard up for staff. I know about this since I was stuck with the reality of finding a new geologist job this fall. Good luck if you don’t have 10+ years of experience.
The reason for this downturn in the mining industry has been a lack of investment in companies (thanks to the stock market decline) and lack of available credit to finance exploration and mining activities.
I wouldn’t be suprised if the province’s economy fell a bit farther before it is better.
April 23rd, 2009 at 2:27 pm
Jedi,
The interest rate question is really interesting, and I’ve been thinking about it alot. What I’ve been thinking most about is the fact that the nominal rate of interest is low, I don’t think this is the whole story. When inflation is negative, the real rate of interest is the nominal rate minus negative inflation, yes? In other words, the real rate is higher than the nominal rate, possibly significantly higher.
Suppose you had borrowed at an interest rate of 5% at the time when inflation was expected to remain at 3%; then the real cost of borrowing for you would really only be 2% (the difference between 5% and the expected inflation of 3%).
Now suppose that after you borrow, the economy starts to deflate and prices are now falling at 2% annual rate. Now the real interest rate on that borrowing rises to an actual rate of 7% (5% – (-2%)).
Things are even worse if you had borrowed to finance the leveraged purchase of assets whose prices are now falling, no? Suppose you borrowed at a 5% mortgage rate to purchase a home whose price is now falling at an annual rate of 10%. This isn’t likey to happen over a long period of time, but bear with me here. Is the effective real interest rate that you are facing on your debt now not 5% but 15% (the sum of the 5% mortgage rate plus the 10% fall in the price of the underlying asset) for the period of time that the asset is declining in value? I’m having trouble wrapping my head around this.
I’d encourage any feedback anyone has about this.
Thanks in advance.
April 23rd, 2009 at 2:28 pm
Pam, I think you may be the only one who thinks housing prices will be stable in 2009, all the graphs look like prices are continuing on their gradual slide down hill. I’m guessing an average house price of $240,000 by year end/early next year, another $30,000 below recent and $70,000 below June’s peak and a slow drop in prices after that for a year or two, with recovery based on commodity prices and the economy.
Still at least double the inventory a “healthy” market should have, and the 45 sales this week is pretty average/just looks good next to all the anemic sales weeks we’ve had of late.
Would be nice to think our employment picture will hold, be we’re starting to see cracks in Saskatchewan’s economy, with both real and potential lay offs pending.
April 23rd, 2009 at 2:28 pm
Crikey, you make a lot of sense… buying an asset is going to cost interest – inflation. Although, if you’re leveraged (let’s say with 10% down), and watching the value decline at 10% annually… you’ve lost your downpayment after a year, so that’s a lot more like 105% ‘interest’, not 15%.
You sound like you’re thinking more like an investor (which can be a very good thing), but I don’t think most people would think about inflation/deflation in those terms when buying a home, since it’s more of a lifestyle choice than an investment choice. It’s certainly a point worth considering, especially right now, and I’m sure it gets factored in, since nobody really wants to buy in on the way down. You’ve still got to live somewhere, though, and maybe rent prices, a new baby, or a move for a new job makes ‘now’ the right time, even in downward-trending market. Interest rates and purchase price make a real difference to monthly payments, and that’s what everyone I know focuses on when they buy, once they’ve decided that the time is right. I think the decline in ownership costs could start getting some people off the fence, especially if we see some stabilization in the markets.
April 23rd, 2009 at 2:30 pm
Hello everyone,
Great blog Norm. Keep up the good work.
I work in the potash industry and I’d like to put forward a few pieces of information for everyone.
The company that I work for does a lot of work for Potashcorp, Agrium, Mosaic and BHP Billiton. We are currently looking for up to a hundred engineers, designers and technologists to join our company. We currently have over 350 people in our Saskatoon office. We have so much work from Potashcorp alone from their expansions that we are forced to share work with other offices across Canada.
Potashcorp has made so much money in the last year that it is financing it’s expansions with it’s own cash. Of the US$5.5 Billion in revenues that they earned in 2007 they reported a profit of US$1.1 Billion. The global credit freeze is not affecting its ability to spend… yet.
The announced 2 million tonnes cut back in production from Potashcorp is partially accounted for already because of the concurrent strikes that recently took place at 3 of it’s mines here in Saskatchewan.
Agrium has announced a “potential” layoff of 300 employees. Incidentally 2009 is a contract renegotiation year for Agrium and its union workers. I’m not sure if the newspapers mentioned that in their articles.
The good thing for us folks here in Saskatchewan is that although downturns do occur in the Potash industry, the big players such as Potashcorp and BHP Billiton are not focusing on 2-5 year returns. They are looking at investments that will provide returns over the course of 5-50 years.
If anyone has any questions about the Potash or Uranium industries here in Saskatchewan let me know and I’ll see if I can track down an answer for you.
Cheers,
Glen
April 23rd, 2009 at 2:30 pm
Interesting price changes on the graph, looks like we are at a March 2008 price?
Glen- Your comments about Agrium-Vanscoy and their potential layoffs make a lot of sense with a contract needing to be renegotiated in 2009. Going how the strike with PCS went that would all add up.
Any word on the possible future potash mines out by Burr and Janzen Lake? I believe this was Athabasca and is backed by Chinese money?
April 23rd, 2009 at 2:30 pm
Canadian MLS SALES DOWN 42 % IN NOVEMBER
http://www.edmontonjournal.com/Homes/Canadian+sales+slide+cent/1077905/story.html
April 23rd, 2009 at 2:34 pm
Thanks guys,
I am just trying to wrap my head around the deflation and then inflation scenarios.
Anybody see 60 minutes last night?
Second mortgage shock looming in the U.S.
http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2008/12/15/the-next-mortgage-crisis.aspx
“It’s not pleasant viewing for those who hope the subprime crisis and its aftermath may be near an end. The show’s sources seem to suggest that 2009 will be no better than 2008 and 2010 is looking pretty grim as well.”
Gonna get worse before it gets better? Yikes!
And for my weekly warning. Don’t trust the Canadian banks:)
Canadian banks told to bulk up reserves
http://www.financialpost.com/news/story.html?id=1078752
April 23rd, 2009 at 2:35 pm
Here for a temporary visit,
saw an interesting graph in the paper about how high Canadian debt levels are, and how much more Canadians owe on their mortgages compared to wages which haven’t kept pace. looks unsustainable and uncanny resemblence to the US housing situation
not sure if any one has posted this yet, courtesy the bench, potash not so great as investment
http://macleans.ca/article.jsp?content=20080827_54739_54739&page=2
brings up some good points and a good low level macleans read
April 23rd, 2009 at 2:35 pm
George,
That is some scary stuff in the 60 minutes video. Started watching earlier in the day but had to turn it off after the intro. Yikes. Really makes me doubt that any kind of “stimulus” plan is doomed to fail, especially the way it’s being approached. The U.S. would be far better off allowing this house of cards to crumble.
Sask tops in economic growth, but…
http://tinyurl.com/55jkzs
Housing sales slowing in province, but…
http://tinyurl.com/6ms78o
April 23rd, 2009 at 2:35 pm
Glen,
Thanks for that. Appreciate hearing from someone with a bit of an insider’s view.
April 23rd, 2009 at 2:36 pm
Crikey,
Interesting observations regarding interest rates. I was thinking along the lines of someone that may be a fencesitter. I think there is a lot of people waiting to get in but the question is how low can the prices go. Obviously they don’t want to purchase a declining asset. However, if the “mass inflation” ever occurs, they would probably want a lower rate rather than a higher. I think Heather mentioned a difference of a point being about $200 a month. I am not sure either of whether the low rates cause them to bite the bullet, or will they wait it out? In the end, it is the same – pay low interest, lose in value or get optimum value, with high interest payment?
April 23rd, 2009 at 2:43 pm
Mmm, that 60 minutes clip is some scary stuff. I’ll post that graph from Credit Suisse that shows the US monthly mortgage rate resets so those that are interested can take a closer look:
http://tinyurl.com/2ahcsc
Jedi,
Sorry for overthinking the interest rate question! What’s better, a lower purchase price and a higher interest rate, or a higher purchase price and a lower interest rate? A lower price would be more important for me than a low interest rate, IMO. You can never change the price you paid for the house after you’ve purchased it, but you could always try to refinance and change your rate after you’ve purchased. Running the numbers through a mortgage calculator will help. This being said, psychologically, the amount/monthly payment people think they can afford is probably heavily influenced by interest rates. I personally think people should be paying far more attention to total loan cost than monthly payment cost, but that’s me. I would never buy beyond my means in the hopes that I could “refinance” later.
April 23rd, 2009 at 2:43 pm
Potential Buyer said:
Any word on the possible future potash mines out by Burr and Janzen Lake? I believe this was Athabasca and is backed by Chinese money?
—————————————————
BHP Billiton is producing a feasibility study for the construction of a 8 Million Tonnes per year potash mine near Janzen Lake. Potashcorp’s largest mine is in Lanigan and is designed to produce 3.8 Million Tonnes per year. BHP has bought up all of the mineral rights around the Potashcorp mines South East of Saskatoon. BHP is the largest mining company in the world and has cash in the bank. Don’t be surprised if they just buy out Potashcorp in the coming year. Being such a large company BHP is not focusing on the downturn over the coming 5 years or so. They are slow and methodical and looking at the big picture 10-50 years down the road.
With regards to Athabasca, PotashOne and other startups I expect these to be bought out for their mineral rights someday in the future. None of them have a shaft or the Billions it would cost to construct a new mine. I haven’t heard much about the Chinese government’s involvement in the local potash industry, although it would make good sense for them to invest in the extraction of the product since they use so much of it.
Glen
April 23rd, 2009 at 2:45 pm
Just a note on the supposed “labour shortage” people keep bringing up.
That’s a heavily marketed term used as a rallying call for those who outsource their opinions. Much like “weapons of mass destruction”, etc…
The notion that there is a lack of people able or willing to work is simply naive.
What it is, is a candy-coating for a much more dire reality: Stagflation. The idea that you can accuse the unemployed of being lazy is simply presumptuous and cruel.
People aren’t going to work jobs that cost them more strain and time than the job benefits their livelihood. Why would anyone piss their lives away being run ragged, never to be rewarded and to watch the management soak up 100% of the profits?
I see it everywhere I travel in Western Canada because I see both sides. Store managers and corporations are registering zero brain activity in not only comprehending this situation, but also wanting to comprehend it. They pretend that the problem isn’t of their making. This is especially true with such a convenient term as “labour shortage”. People have bought into the notion before they tested it’s validity.
Post a job ad for a position and actually offer a pay that is consistent with the work involved and living costs of your area, and you can have that job filled overnight. I promise.
Ultimately the problem stems from money-drunk higher ups not paying out profitability to anyone but themselves and investors. According to the corporate mantra of the 21st century, people should work for free.
We as the middle class should know better and demand more than that.
The correct term is that there is a “viable wage shortage”.
April 23rd, 2009 at 2:45 pm
Hey all,
Just am back for the holidays and thought I would check back to see what the latest buzz is about the Saskatoon housing market. I like the new graphs and charts Norm, they are a great addition to an already swell site! I’m a bit confused as to what is going on with the market though. Several of my friends still here are looking at buying in town and they are being told that prices are set for a big jump over the next months and that they should act now. What are your thoughts on the market trends, Norm? Do you agree that come spring there will be a huge rebound in prices?
As an aside, I am loving the new job in Edmonton. I feel like sanity has once again resumed in my life, and I am no longer working insane hours trying to stay afloat with the steady stream of rent increases. It’s actually the opposite with the new job at the city; I am now working less hours, have evenings and weekends back off (woohoo!), and am making a little bit more than my old job with rent that is about $250 a month cheaper in a building that is not falling apart. Overall, you could say I am happy with the way things have turned out. Despite what people back home say about Albertans, I find the folks in Edmonton great as well. Unlike Saskatonians who prior to my departure seemed to all think they were Donald Trumps for having the benefit of buying before the market boomed, Edmontonians seem much more humble and seem to be not quite as boasterous about their wealth as the folks back home. This alone is very refreshing as the people there don’t seem to think of us renters as second class citizens like they did back in Toon. Anywhoo, just wanted to say hi to everyone, and wish everyone a Merry Christmas!
April 23rd, 2009 at 2:46 pm
Frustrated Renter You hit many of my thoughts concerning Edmonton (Calgary is a different story however) right on the nose!!!
And your friends are getting fed a bunch of B*llSh*t. (I guess I would feed anybody a line like that if I havent sold a property for a while and was getting hungry) I’m in the belief that the spring will bring a large number of “new” property into the MLS system and next fall would be the best time to buy in stoon.
April 23rd, 2009 at 2:48 pm
Frustrated,
Thanks for checking in. I’m glad to hear your are well.
“Huge price increases?”
I think I would be more in line with Wesco’s thinking than the opinions of the friends. This economy would have to turn on a dime for prices to start going up.
April 23rd, 2009 at 2:48 pm
Merry Christmas, FrustratedRenter. Glad your move is working out for you.
Simple question for your friends: told by whom? If they’re hearing it from News Talk Radio 650, that could explain their bullishness; I’ve had a couple of people talk to me lately saying that they thought things were turning around, and that was their source. NTR isn’t exactly known as an ‘unbiased source’, though. See http://www.thebench.ca/?p=251 for a discussion of their one-sided boosterism.
April 23rd, 2009 at 2:48 pm
What more do you expect from these people? They only serve the rich.
If that isn’t apparent to anyone by how they massage conservative support then I’d have to say those people lack higher brain function.
It’s the same garbage as what the Americans went through with their media. Canada is going through the same thing right now – how else can you motivate most of the middle class against their own best interests?
Media.
April 23rd, 2009 at 2:49 pm
Frustrated Renter,
I’m with everyone else – it’s total BS what your friends have been told. Think about all of the listings that have been pulled off MLS over the past couple months… many will relist in spring thinking they can get a better price. Once the market is flooded yet again with listings it will give better leverage to buyers.
April 23rd, 2009 at 2:50 pm
I found what I wanted about deflation-inflation on Mish’s site. For anybody that is interested
http://globaleconomicanalysis.blogspot.com/2008/12/humpty-dumpty-on-inflation.html
April 23rd, 2009 at 2:51 pm
Talking to a group of affluent associates, one noted it was no surprise sales were stagnant and inventory up, apparently, in this group, all had went out and bought an average of 3 properties in Saskatoon – all but a few are holding these vacant listings for hopes of a recovery…
The smart one sold at a small loss/is renting
April 23rd, 2009 at 2:53 pm
I have followed Norm’s site for some time now and I feel I need to make an observation. I think that the people who respond to this blog are a cross-section of the general public – each with their own opinions and beliefs. What “EVERYONE” has to remember is that we live in the best times that have ever been!! Does it matter that you can’t afford everything you want? Does it matter that you are pissed off that you missed out on the housing bubble? Does it matter that your investments lost money?
I would say that anybody posting on here doesn’t have to worry about a warm bed, a roof over their head and something to eat. If they do they should think about pawning their computer!!
Words to think about especially this time of year…..
April 23rd, 2009 at 2:53 pm
Nick,
They’re holding them vacant? Sounds like a good way for the “affluent” to find their way to the poor house. Three condos, purchased towards the peak, which I assume is the case since one sold at a loss, has got to run $4-5K a month. Give your pals some advise. Sell them or rent them, but don’t bleed to death while you wait.
Al,
Good points. We do have it pretty good in this part of the world. Thanks for reading.
April 23rd, 2009 at 2:55 pm
Al,
very true, at the end of the day, as long as we have a roof over over our heads (mortgaged to the hilt or not
) food in our belly, clean water in our cups, everything else is gravy.
I had a feeling that the US would establish ZIRP, but not so soon! Some media are not even talking recession but depression, but that is the media. I do wonder if Canada goes to ZIRP.
My uneducated guess is that we will see sprinkles of 90’s Japan and the Great Depression followed by 70’s stagflation. Will government intervention make it better or worse?
April 23rd, 2009 at 2:56 pm
Not sure about 3 but some friends own condos and have pulled them from the market waiting for better prices. It is crazy, but you have to realize these are the same people who thought buying a $300,000 + condo in university heights, which is no where near the university or anything else, was a good idea. They should realize selling now for some profit, or minimal loss is better than selling later. Renting in the mean time seems like a good idea too. Seems everyone knows some one with a “speculation” property they are trying to figure out how to sell. Norm, any way to estimate what the real number of places that are available in Saskatoon? Based on cancelled listings? Maybe they are “waiting” on these condos value to go up, because Remax says Saskatoon is primed for another boom. Wonder if Remax owes them any money when their blatant boosterism leads to people sticking onto investment properties through another 10% or more loss?
April 23rd, 2009 at 2:58 pm
As a group we promised to stop picking on saskhouses, but I can’t help myself! Guess not everyone realizes prices are still going down as they keep asking for more and more. Poor sellers. Just prolongs time on market, and eventual switch to MLS agent. By then prices will be down further. Setting unrealistic expectations in a declining market is not a good idea! http://saskhouses.com/News/22/
April 23rd, 2009 at 2:59 pm
Agreed Norm, holding vacant condos right now, not a great idea. Renting them out would be a good revenue generator if they feel they need to wait for prices to rebound. Not worth telling all the associates they’ve misplayed the market, won’t be too popular, easy to just sit back, listen, and appreciate some of the wealthy investors whose speculation caused the over valuation are catching some karma.
Then again, another approach seems to be to ask more to offset lower sales prices? Maybe these independent sellers would have benefited from a realtor to help them actually sell.
April 23rd, 2009 at 3:01 pm
a lot of the town houses around me were for sale and are now just empty so is really unfair rent is so high when so much rental potential is just empty
April 23rd, 2009 at 3:01 pm
Dan,
I don’t think there’s any way to get a handle on how much of that stuff might be out there. We’ll know if and when it hits the market.
renting,
The rental market will eventually see a correction as well. It’s all mathematics, and sooner or later, there has to be some relationship between real estate prices and rent rates. These vacant units you’re seeing, do they have for sale signs or are they just sitting there?
April 23rd, 2009 at 3:01 pm
Canadian cities in rapid decline: CIBC
http://business.theglobeandmail.com/servlet/story/RTGAM.20081217.wcities1217/BNStory/Business/home
Regina shot to No. 1 spot in terms of economic activity from its 10th place ranking last year.
“Strong population growth (second only to Saskatoon), a nation-leading pace of job creation, low unemployment rate and well below average corporate and personal insolvency rates combined to boost Regina to its current rating,” Mr. Tal wrote.
The place to be is Saskatchewan
April 23rd, 2009 at 3:05 pm
Interesting, Regina, #1 in Canada, with higher wages, better job creation and cheaper housing is ranked ahead of Saskatoon…
Also interesting, Toronto is ranked ahead of Saskatoon in economic activity, and percent gains in Toronto are much larger in absolute terms (the arugement we always here when Saskatoonites are explaining why are total crime is low, so highest per capita doesn’t matter, also translates to total economic growth kicking Saskatoon’s butt).
Still seems surprising we’re hearing about “population growth” in Saskatoon, when we have super low sales and a lot of properties listed on MLS and anecdotally, a lot of empty houses and condos just waiting to be listed…
I take this as a reason the rest of Saskatoon should follow me, save some cash, take a raise and move to Regina
April 23rd, 2009 at 3:07 pm
George,
“The place to be is Saskatchewan”
Been outside lately?
Nick,
“the rest of Saskatoon should follow me, save some cash, take a raise and move to Regina”
Shhhhhh! We’ve got a good thing going here and you’re spoiling it
That 60 minutes video is something else. I don’t see how the stock market could have already (fully) taken the next mortgage crunch into account; but what do I know.
April 23rd, 2009 at 3:07 pm
Nick,
Perhaps Potash Corps just announced plans over the next couple years won’t come to fruition, but if they do, and they have the cash to do it, and the potash prices to justify it, I understand a couple thousand high paying jobs might be in the offing for Saskatoon and area. I imagine that will bring more people and more wealth Saskatoon’s way pretty quick. And raise average weekly earnings there. And eat up potential housing inventory. Or push rents. If your employment picture stays a fair bit better here than the rest of the country’s, my bet is on immigration, not the other way around.
April 23rd, 2009 at 3:28 pm
Mark sounds like Saskatoon is back to the what if’s and future potential argument. Point is, right now, Saskatoon has a lot of property for sale, low demand, wages that trail Regina (and Edmonton and Calgary) by a LOT and house prices that are closer to Edmonton than to Regina. Sure Potash Corp could follow through with expansion plans, but right now, Saskatoon’s population “growth” is questionable and with 10% of Canada’s population being in Toronto, #3 behind them doesn’t even put Stoon in the top 10%
Regina has announced a multi-billion dollar refinery expansion, with high paying jobs as well.
April 23rd, 2009 at 3:30 pm
Nick,
“Saskatoon’s population “growth” is questionable and with 10% of Canada’s population being in Toronto, #3 behind them doesn’t even put Stoon in the top 10%”
Don’t get the math here. Secondly, I don’t see why you see Saskatoon population growth as questionable. Doesn’t that study put them at the top of the list in that category. What numbers do you have that suggest otherwise? And yes, Regina doing’s well, that’s where I am. Let’s hope it keeps on chugging.
April 23rd, 2009 at 3:30 pm
10% of the population of Canada in Toronto means 10% of the population of Canada economy wise is doing better
There was a study earlier this year that suggested, in part due to huge increase in housing inventory, and labour shortages, that Saskatoon had actually lost 2,000 people – sure it’s referenced a bunch on this site.
April 23rd, 2009 at 3:31 pm
For anybody who has not seen it.
Mortgage meltdown on 60 minutes
http://www.cbsnews.com/video/watch/?id=4668112n
Oil tumbles below $40 for first time since 2004 http://www.theglobeandmail.com/servlet/story/RTGAM.20081217.woilprices1217/BNStory/energy/home
Opec cuts supply by 2.2 million bpd and oil drops 8%?
Its a funny market, but not funny ha ha.
At least gasoline is coming down. It could go further.
April 23rd, 2009 at 3:31 pm
Nick,
Households to face “trying” 2009: Bank of Canada http://fresh.bnn.ca/reuters_story.aspx?story=2008-12-17T204143Z_01_TRE4BG71G_RTROPTT_0_CBUSINESS-US-BANKOFCANADA.XML
Though households’ debt-to-income ratio was at a record 140 percent, the debt-service ratio had declined to below the historical average because of lower borrowing costs,
April 23rd, 2009 at 3:33 pm
My main point still stands, rein in Christmas spending, pay off debts first, and lay off major purchases for the next year.
Probably all good advise at any time,
especially now, with record debt,
possibly financed by record bloated housing prices and inventory in Saskatchewan.
April 23rd, 2009 at 3:33 pm
Not sure why anyone would think people from Ontario (immigrants or anyone else) would come here in anything close to significant numbers because of some “economic boom”. My observations and the comments and I get from friends in Ont are that the asking price for homes are as expensive in Saskatoon as Calgary for a comparable. With much lower proerty taxes and no sales tax, with a lower crime rate and a mtn range…..why would people choose come here again? I think housing prices have a long way to come yet.
April 23rd, 2009 at 3:33 pm
G,
“Why would people choose to come here again?”.
I did. I’m feeling pretty good about that choice, too. AB is hurting too, and the pain is just starting to spread. Oil futures were at $38/brl this morning. Ouch.
Crisis forces Alberta to consider red ink
http://tinyurl.com/3tcgcn
April 23rd, 2009 at 3:34 pm
“Oil Drops to $36 as demand outlook overshadows OPEC”
http://www.globeinvestor.com/servlet/story/ROC.20081218.2008-12-18T200015Z_01_TRE49B3Y6_RTROPTT_0_CBUSINESS-US-MARKETS-OIL/GIStory/
Yikes!
April 23rd, 2009 at 3:36 pm
Potash Cuts 2008 Profit Forecast Amid Economic Slump
http://tinyurl.com/4v6ptx
“Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer maker, cut its full-year profit forecast because the global financial crisis is slowing demand for crop nutrients.
Crop prices have fallen from records in June and July as demand growth slows for food, animal feed and fuel, reducing the incentive for farmers to buy fertilizer to boost yields. In response, producers of the crop nutrients have cut output.
“We believe global production curtailments — the logical economic response to supply/demand imbalances when buyers step away from the market — will significantly tighten these markets when demand returns, which we expect to be during the second- quarter of 2009,” the company said.”
This is unfortunate, but it sounds as if they’re being as flexible as possible under very trying circumstances.
April 23rd, 2009 at 3:41 pm
Warnings about risky mortgages ignored.
http://tinyurl.com/49pzsb
April 23rd, 2009 at 3:42 pm
Crikey ….don’t drink the kool-aid. The reason housing prices sky rocketed here had more to do with hype, the 40 year mortgage and Alberta speculators that it did with any increase in the prov economy. The population has not increased significantly and from some reports it has shrunk. Saskatchewan also has a very bad rap in the rest of Canada and now with housing prices that rival Calgary…..I am sorry but for most people that just doesn’t make sense. In the coming months we will see if it was just all hype and the Merril Lynch report was accurate or if in fact people are coming here in droves and driving up the price. Time will tell.
April 23rd, 2009 at 3:44 pm
G,
Trust me, I’m not in danger of getting sopped in any Kool-aid. I chose to come to Saskatchewan from BC, and believe me, my standard of living is far better here. I have not yet bought a house, as the timing still isn’t right for me. I completely agree that prices for many things, including housing, were based on wildly overoptimistic expectations of future revenue. Supply and demand will eventually work it out, but it will be interesting to see how exactly it plays out, for sure.
April 23rd, 2009 at 3:44 pm
George,
I remember a while ago you stated that there would be a time when US dollar would start declining against other currencies regardless the decrease in oil price. I used to think that whenever oil price declines, no matter what, the US dollar strengths. Do you know the reason why its happening adversley right now?
Does anyone else has any idea? Please share if so!
April 23rd, 2009 at 3:45 pm
“Potash production in hibernation.” PCS produces 940 “temporary lay-off notices” which will stop production at three provincial mines from Jan. 15- Mar. 15.
http://tinyurl.com/4jvuvc
April 23rd, 2009 at 3:45 pm
Just checking in to see if the jobs have changed for the white collared folk. I know there has been plenty of mention for Agrium increasing operations there but even Agrium’s head office is in Calgary. It’s a huge building and acutally only about a 5min drive from my house. Not sure how all this growth is helping us finance guys move back to Sask. If anything it’s keeping the market afloat in Alberta.
I have to mention there is plenty of anxiety from people who work in Oil and Gas…Usually the riggers and field guys go and then the office guys next. I have heard from several of my friends that their companies are now implenting hiring freezes. This includes my company and we’re not oil and gas.
April 23rd, 2009 at 3:45 pm
I’m sure some will dispute it, or claim everyone’s about to leave again, but here’s stats canada claiming sask’s population up 15,000 year over year, with many coming in July and September of this year.
http://www.thestarphoenix.com/Saskatchewan+population+grows/1095921/story.html
April 23rd, 2009 at 3:45 pm
Suprisingly good news in Canada today for those worried about deflation.
http://business.theglobeandmail.com/servlet/story/RTGAM.20081219.wcpi1219/BNStory/Business/home
April 23rd, 2009 at 3:46 pm
I remember a while ago you stated that there would be a time when US dollar would start declining against other currencies regardless the decrease in oil price. I used to think that whenever oil price declines, no matter what, the US dollar strengths. Do you know the reason why its happening adversley right now?
Does anyone else has any idea? Please share if so!
I’ve been lurking here for a few months. So heck, I’ll weigh in:
From time to time, oil and uncle buck lose the correlation. what we may be seeing is more hedgefund liquidation in crude. and this weeks move in the buck was fear of benny boy firing up the printing press.
the big spike in the dollar index since august could be attributed to a shortage of US dollars in the system. additionally, yen purchases cause added currency volatility.
when cad/yen falls, the usd/cad pair rises. when aus/yen falls aggressively aus/usd falls too. the more the yen strenghtens against the us dollar, the more a particular pair weakens against the us dollar.
sorry to ramble on and hope it makes sense.
April 23rd, 2009 at 3:47 pm
“Suprisingly good news in Canada today for those worried about deflation.”
Well, I know I’m not worried about deflation, depending on how you define it. I define deflation as an increase in money supply and credit. As far as I am concerned, low gas prices is not deflation–it’s just a result of money and credit going into the abyss.
April 23rd, 2009 at 3:47 pm
Jeff,
“I remember a while ago you stated that there would be a time when US dollar would start declining against other currencies regardless the decrease in oil price. I used to think that whenever oil price declines, no matter what, the US dollar strengths. Do you know the reason why its happening adversley right now?”
The US dollar is going to lose quite a bit of value heading forward for 3 big reasons. Debt, inflation and trade deficit. http://www.iousathemovie.com/ will explain this well.
If I did say that the oil price would decrease along with the US dollar compared to other currencies, I may have to retract that comment because it would not make sense. Oil is traded in US dollars, so when the US dollar gets inflated and becomes devalued this will send the price of oil up even though if oil was priced to something such as the Can dollar the price of oil could have gone down.
April 23rd, 2009 at 3:51 pm
Wow you guys are posting some happy news and I guess that makes u different from the media posting any good news because ur doing it without any motive
All that aside I still own my house and I bought more stock I hope you all drive the stocks and houses down to pennies I will buy more than a few
With that how long do you think oil will be this low and houses will be this low do you really think there is thousands of houses held by speculators? Did anyone hear about the mining and exploration tax credit to individual investors….well here it is
http://www.gov.sk.ca/news?newsId=ada232f3-c68d-45f9-97a8-f3ef64b8f312
And yes I bought even more stock I am in the red now and I think pretty much everyone is for this year thats for sure even with my winnings from BQI couldnt save me from the moderate lashing of the TSX 60. But I hope this happy news brightened som1’s day and next time you fill up ur tank I hope u smile because I did =)
April 23rd, 2009 at 3:51 pm
Hey Armoth,
have not heard from you in awhile. I am guessing you have shorted BQI. I have felt all junoir oil, gas and mining companies would take the biggest hit and the only way to make money would be to short them. Good job!
A few months ago when oil was at $90 a barrel, I said we would hit $35. ( It was a number based on inflation adjusted data over the longterm factoring in a worldwide recession. Granted, oil has other factors when it comes to pricing but usually not in a recession, just supply and demand) I did not think it would go this low, this fast, but it has. And I think it has further to go down in the short term. Single digits? No, but $20 a barrel is probably not out of the question.
In the next couple of years, if oil is still traded in US dollars, oil may break $150 a barrel, but not because of oil but because of the devaluation of the US dollar because of investors pulling out and inflation. The US fed has few bullets left and their biggest worry at the moment is that the printing press for money does not get jammed up. If and when the credit markets improve, inflation will be rampant in the States ( not sure about Canada, yet)
http://www.inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
April 23rd, 2009 at 3:51 pm
Armoth,
I should have proof read that post. Sometimes I am thinking one or 20 things and writing another.
If oil hits 150 it will be a combination of oil’s worth increasing and the devaluation of the US currency. Personally, I think oil is good deal right now, great at $20. I am just waiting. Buy low, sell high, right?
April 23rd, 2009 at 3:51 pm
Wasn’t Calgary booming at one time? Hmmm. Wages have increased 5.9% yoy, employment is still high but retail sales are down yoy.
Housing sales have fallen off a cliff. They may break 500 this month. Dec 07 there were 846 sales and the slowdown was already upon them at that time. Prices are 30k down yoy and 90k off the peak. Listings are still sky high.
http://www.findcalgary.ca/listings?pathway=127&pageId=19
April 23rd, 2009 at 3:52 pm
George,
I changed my position from a large to a very small position in BQI as well in Connacher neither have more than $250’s in them and everything except the index money is in Suncor. If anything will happen out of this is that the juniors are gonna get hammered and the big oil is going to get bigger just like what happened with banking. Loss of XIU.TO(TSX 60) to date is 36.98% which is pretty good compared to some of the blue chips I was thinking of switching too. Im not sure how long this downturn in housing will last maybe 6 months maybe couple years but there is no other place I would rather be in the world with all of our opportunities. Merry Christmas or Happy Holidays to those who prefer that =op
April 23rd, 2009 at 3:52 pm
Hey Armoth,
Good to see that positive attitude. You’re definitely right about gas prices. I went to fill my tank which was down to 1/4 last night and I had to force it to get to $20. That hasn’t happened in a very long time. It seemed like just yesterday i wasn’t even at half a tank and it would cost close to $35.
I also agree now is the time to buy stocks but I am greedy and I keep trying to get that tiny bit lower before i do. As i am waiting it quickly shoots back up 5-10% and then i have to wait again. Maybe i’ll dive in soon.
I also share your view on oil companies. You will probably see a few bigs swallow a few small ones as the little guys won’t be able to sustain these low prices.
As for today’s oil close of 32.80 that is artificially low as February’s futures’ price is already at $43. what do I mean artificial? At the end of the month you have several people trying to close out positions which tends to cause a rapid price change at the end of the month. However i really have no idea if it can go to $25 or not. If it does you will see more projects stopped.
Are prices getting pounded here yet? For the people that have to sell they sure are. There are lots of speculators (i mean lots) that refuse to lower their price but the people who bought first and can’t keep paying two mortgages have to take that 20-30k hit.
Not sure if or when we’ll see that happen there.
April 23rd, 2009 at 3:52 pm
PotashCorp laying off 940 workers for two months
http://www.thestarphoenix.com/business/Potash+production+hibernation/1094337/story.html
Were they not on strike for about 4 months this year and now they have to lay off 940 workers for 2 months? What if there was no strike, 6 month layoff?
I was pretty surprised by this number of people getting laid off for two months.
April 23rd, 2009 at 3:53 pm
George,
Sad it happened I know at the Vanscoy Agrium Mine over 300 got their notices for this February. But things can change just as quickly in either direction nowadays everything is changing one way or the other in lightning fast motions noone can predict it not even Buffet and he is my hero =op
April 23rd, 2009 at 3:53 pm
Watch crude futures next week. If $40 does not hold, $35 will be the target eventually. I got a weekly close of $40.90. When these trends get started, they don’t stop until they do.
You can pull up any chart and see what I mean. At first glimpse, the Potash stock chart looks similar to the crude futures chart. A big parabolic move to the upside and then a complete washout. Ugly.
My hat’s off to you folks continuing to buy stocks. I wouldn’t. This bear market has a ways to go still imho. And I’m not trying to be a gloom and doomer, just stating an opinion.
April 23rd, 2009 at 3:53 pm
How low could they go? If Canadian prices follow U.S. trends, certain cities will experience a major slide in house prices
http://network.nationalpost.com/np/blogs/fpmagazinedaily/archive/2008/12/15/how-low-could-they-go-if-canadian-prices-follow-u-s-trends-certain-cities-will-experience-a-major-slide-in-house-prices.aspx
Saskatoon
Start date (Oct. 1999): $110,195
Peak: (June 2008): $310,386
Current: (Oct. 2008): $285,310
Predicted: (Oct. 2009): $169,480
With the economic uncertainty anything can happen.
April 23rd, 2009 at 3:54 pm
Interesting article (‘How low could they go’) George. Got to be the most bearish of bear predictions I have seen yet, and it seems completely insane to say that the average price might go down another ONE HUNDRED AND TEN THOUSAND DOLLARS within twelve months? But then again, someone would have been considered just as cuckoo had they said that the average house price would go *UP* by $150k in just two years (Jun 2006 to Jun 2008) or $90k in a single (Oct 2006 to Oct 2007), yet both of those things happened.
And it’s worth noting that a target of $169k still represents a 21% increate from October 2005 values. Who posting here has had their wages go up 21% in the last three years? Not me, yet I still consider myself quite fortunate overall.
While looking at that one, I saw this article in the sidebar:
Saskatchewan, get ready for economic pain
http://tinyurl.com/9eb5ts
“[As] commodities’ valueSleep fall, it seems inevitable that the economic health of the province will soon tumble, just as we’ve seen all across the U.S., Canada and beyond.”
To be sure, there’s not a lot of substance to the article… but there wasn’t a lot of substance in the referenced Fortune article (Saskatchewan: Where Business is Booming) either. Just interesting to see that not everyone in the Fortune/Finance/Business sector is equally bullish on the province.
April 23rd, 2009 at 3:54 pm
Bookrat,
Regarding “how low can they go?” my comment from another thread.
“Interesting indeed. Even more interesting, I can’t think of a single “expert” who has actually made this “prediction.” David Wolf from Merrill Lynch and Douglas Porter from RBC have both suggested that there are similarities in the ways in which the two major markets are unfolding but both economists went out of their way to stress major differences and doubts about whether it would occur. ”
I agree completely with your point. It’s difficult to wrap one’s head around this idea, but stranger things have happened.