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Are Alberta buyers on the way? Are they extracting windfall equity and looking for a hot place to buy? I was over checking out the Alberta Bubble blog, and it is pretty interesting to read the discussion there of how quickly the Calgary market has changed. Is this support for the continued myth of Victoria as a destination of choice for significant numbers of Alberta buyers?

Valuations are not sustainable in an absence of buyers willing to pay particular prices. As surely as your friends tell you real estate always goes up, it is stalling, as surely as that, things change. Even with oil rich Albertans in the neighbourhood.

What does this have to do with Victoria? Well, it was just last year that the story of Alberta buyers was rolled out to the local press, swallowed and regurgitated as a factual influence on the local market.

Check out this example.

If Bear Mountain needs to go far afield to find buyers, what does that tell you about the capacity of the local market to support stratospheric condo prices?

Since that time, VREB has published a newer version of the Victoria market story, one in which the Victoria market is largely local. This should not really be a surprise. What is a surprise is that it could ever be considered otherwise.

This is not Vancouver of the 90's, a convenient drop off point and escape from a communist Hong Kong, flooding with dollars escaping a potential totalitarian grasp.

As Tony Joe, President of VREB said, "With such a large percentage of buyers originating in the Greater Victoria area it’s clear that the market is primarily being driven by local people who are moving up or down in the market to meet their changing needs or who are entering the market for the first time."

Why the need to mention the almost forgotten first time buyer?

Could it be because with troubles in US and Alberta real estate, and the rising Canadian dollar, the moment of truth has finally come, the moment when the local market will have to sink or swim based on local economics? That is to say, the moment has finally come when the market needs to rely on "first time buyers" to prop it up?

Looking at condos on the local MLS in the VREB area, as of today there are around 967 listed. Another 70 condo listings were found in a basic search on Craigslist. Mind you, by the time you click that link, the number could go up or down a lot.

Does economic news like this bode well for the housing market this spring? Yes, I would say it is good news. If the whole mess leads to lower prices, that would be the best news first time buyers could hear.

Does it seem like I keep beating that bear drum right or wrong? Well remember the Economist Magazine calling the housing bubble the biggest bubble in history, back in June 2005? Sometimes an early call is just that, an early call. Doesn't make the call wrong, just because the timing could be better.

Relying on housing as an easy source of tax revenue and retirement savings has come at a cost. Is it really better in the long run for another generation of first time buyers to step up to the plate at all-time high valuations, with minimal downpayments, with 40 year amortizations, and sign on the dotted line for run down, too small, decrepit, junky properties, so that the current generation of home owners can cash out?

I mean, is there anything else available to the prudent first time buyer?

Will this be the year prices reverse and fall. Wouldn't that be a good thing, and help solve so many local social ills stemming from severe housing unaffordability?

Hmm, we'll know pretty soon now.