There is an interesting graph that has come out from our Real Estate Board. It shows the relationship over the past 2 years between migration into the province and our listing inventory. We have went from extreme lows under 2000 homes for sale in a month to approaching 10,000. This graph clearly shows how the increased migration knocks the inventory down and vice versa when migration slows.
Most builders in the past two years were taking over 12 months to build a home. The increased migration was causing quite a building boom in the last two years. The only catch, was the time it took to build. If a home is not ready until 12 months or more and then the migration slows, the overhang of listing inventory starts to develop.
I think our situation is quite different then the inventory buildup and price declines in the U.S. markets. Many of those markets were "false booms". Speculators buying to flip, and builders overbuilding without the strong economic dynamics that there are in Edmonton. Did we see speculators in this market? Sure, but the difference is we have the employment and migration figures to justify the extra building.
