9 cranes on the way to work

I used to say you could tell how fast a city is growing by looking at the skyline. Today I drove to work and counted 9 construction cranes on my way to work. Now that is not the total number in the calgary skyline, that is simply how many I passed on my way to work. To say that Calgary is exploding would be an understatement of the wildest proportions.

I heard on the news that inflation in our fair city was 6.9% last year, which means that I need a 7% raise just to be making what I made last year. I just hope the boss-man was watching the same program as I, because May is just around the corner, and well May is annual performance time.

The average house in Calgary is up again, now sitting at just under half a million dollars. Now I am no economist but something has to give. I mean, from what I can tell most average people are making between 50G and about 80G, yet people keep signing mortgages for 400+000, thats 20G a year in interest. How does this work? How does a family making 120G a year pay 20G a year in interest and not go broke. The real estate agents say you gain it in equity, well how do you gain it in equity before you sell. You pay 20G in interest and the only thing that changes is you have more equity to borrow more money to pay more interest. Please if there is an economist out there that can somehow make sense of this I would love to read your comments or refer me to "how the rich get richer dot com."

If I was a pesemist, and well when it comes to real estate I am, I would say that people have got themselves into a pickle. They bought houses, and borrowed against the hyper-inflated equity they feel they have in them, so now they either have to sell for the hyper-inflated price or go broke. I think this because I get to watch all those reality shows, showing people who have a huge mortgage and owe like 40G on their credit cards WOAH. Again I dont get this.

I am no money guru, infact I am probably the most financially inept person out there, but at the same time, I do know that I cant afford a half a million dollar house. I dont care if it might be worth 3/4 of million in a year. And I dont care what other hair brain money making schemes are out there. History tells us that when you see a market like this, with people just trying to scrape by, but then talking about equity markets, and tax havens, while "leasing" vehicles and trying to convince themselves that the mortgage that they just signed, and cant afford is going to make them rich beyond belief.....well when you see a market like that run.....cause somethings gotta give.....they call it a "correction" and I am putting my money on a small one "sooner" rather than "later" infact I will go on record thats something is gotta give in less than 3 years. I dont know what it will be, or what it will look like....but when it happens i will let you know.

Now enough of my crystal ball for today.....whos coming for pints tomorrow. We can talk "real" estate, and by that I mean we can talk about that hottie serving it up for us. Thats what I would like to invest in this year, a nice piece of "real" estate.

Ciao