As per my annual custom, I self evaluate my predictions that were made at the beginning of the year. In 2019, I attempted to be a little smarter and only make three relatively straightforward predictions. Looking back on these now, it appears I have gone one for three, so once again I have proven to be a terrible prognosticator of the Calgary infill housing market. The predictions from January 2019 are copied and pasted at the bottom of the page.
Prediction 1 - WRONG - I predicted that the Killarney (and area I guess) land prices would stabilize and slightly increase. That hasn’t been the case. I think they have stabilized in the last quarter but no increase whatsoever was apparent. I don’t see much momentum into Q1 2020 either.
Prediction 2 - WRONG - I predicted the 2019 spring market would be better for inner city new builds than the 2018 spring market. I was definitely wrong, the spring market wasn’t good. It seemed pretty much the same to me as the prior year. I have not researched actual market statistics here, this was just my feel for the market. Looking ahead I see 2020 begin quite similarly, in the absence of any kind of catalyst bringing good news to the Alberta economy it does not seem that land prices can increase.
Prediction 3 - CORRECT - I predicted less overall meddling in the housing market by federal politicians and agencies. This was overall correct. After the disastrous meddling of earlier years, perhaps the meddlers were too busy enjoying their bloated salaries and taxpayer funded benefits and they needed a break to digest their earlier meddling. I even called correctly that there’d be some bizarre last minute meddling pre-election, but it’d be mostly an optical exercise and not truly market damaging. Call even this jaded builder shocked when the liberals announced a shared government downpayment-equity program. That has to be one of the dumbest demand side policies ever dreamed up. The good news is it is dumb enough and convoluted enough that it likely won’t impact the market.
So there you have it, my prediction review edition for 2019. Stay tuned and I will post some 2020 predictions. Better luck next year?
Killarney land prices will stabilize and increase slightly - the latter half of 2018 was awful for land sellers. Prices appear to have dropped by six figures. I think in 2019 the prices will recover a little. The heady days of 50 ft lots being sold for $675k will not return, nor should they. Of course a lot of this depends on factors we cannot predict, like government meddling, energy and pipeline related debacles, and market sentiment.
The spring market for new inner city homes will be better than 2018. This seems possible, even in a soft market. The amount of inventory and attractive pricing will draw buyers into the spring market. Overall I expect the market to be a little better than 2018, but certainly below average of the past five years.
Government meddling will be lower than 2018 - 2018 must be the high water mark for damaging government meddling in the housing market. I can’t imagine a year where more government harm is caused to small business owners, if it does get worse, 2019 will be a nightmare. It will be hard even for the deeply incompetent people we have in charge of society to do worse than they did last year, even by accident they should be better. Doing nothing at all would be the path of least resistance for the government, this would be a relief. I also think they may relax some of the arbitrary mortgage rules as a way to placate the industry pre-election. Of course, as an election year, that is a real wildcard, if housing becomes a factor that could sway a campaign, you could see some really bizarre policies or regulations enacted to buy votes. Frightening!