It put a smile on my face to wake up today to news of oil over $50 a barrel. We’ve been waiting for that benchmark to be crossed for awhile now. It’s definitely good news, however this morning’s article in the Edmonton Journal points out that our memories do tend to be rather short. Would you believe that oil reached $60 US for the first time in 2005? That’s just four short years ago! The average price in 2005 was $57 US which sounds rather low to us now after a price of $147 in July 2008. And then when we saw $33 a barrel early this year, we compared that to our the recent price in the $140′s.
This reminds me of the real estate market. Our memories are short in this area as well! The peak prices of May 2007 quickly became the “new normal”. But a sudden rise in any market is usually followed by a “settling out”. It’s true that changes in the world economy have impacted all sectors of the economy, including housing. But there is also a significant portion of what has occurred that I believe is part of the natural cycle of real estate.
Bottom line? Whether it’s the price of a barrel of oil or the price of the house next door, it’s important to realize that our memories are short and we need to look at the “big picture”. The long-term trend for both real estate and oil in Alberta remain strong. And of course there is the vital ingredient of the Alberta economy: the positive “can-do” attitude of the people of Alberta! Keep smiling, folks. There are good times ahead!
Contributed by Kathy Schmidt, Proud Albertan and Broker Owner of Schmidt Realty Group Inc
