Albertans who feel like they've got to brush up on their real estate market trivia before heading off to a social event should take comfort. They are not alone.

Indeed, the need to discuss and debate real estate bubbles, booms and busts may well be a continental preoccupation, says Earl Lee, president of U.S.-based Prudential Real Estate Affiliates, Inc.

Citing a truism equally applicable to both Calgary and Edmonton, Lee says "real estate has taken over as the most talked-about topic (on the U.S. cocktail circuit)."

Close to 900 real estate agents were at the Roundup Centre in Calgary recently to hear Lee, a national director for the National Association of Realtors, and Kevin Clark, the Calgary Real Estate Board's new president, talk about where Calgary's real estate market is headed.

Kevin Clark is the new Calgary Real Estate Board president

Both men delivered keynote speeches at CREB's Forecast 2006: Breakfast & Tradeshow in late January - and both dismissed speculation about a potential downturn in the residential real estate market.

Clark, whose career in real estate began in 1976, is with the Re/Max House of Real Estate, Calgary. A sales agent by choice, he has served on numerous CREB committees and has taught real estate courses in business ethics, salesmanship, risk reduction and agency.

A keen observer of the Calgary real estate market, Clark's presentation walked listeners through a myriad statistics and reports all pointing to the continued strength of one of the nation's hottest residential markets.

Buoyed by a robust economy, increased in-migration and continued low interest rates, Clark forecast continued price increases for single-family, combined residential (single- family and mobile homes) and condominiums in Calgary.

Those increases are stoked by basic supply-and-demand economics. According to Clark, Calgary's residential market ended 2005 at a 10-year low for available inventory. Indeed, limited supply was a major factor in pushing up 2005 prices. With demand particularly high in some communities, Clark says a lack of inventory is why some 20 per cent of Calgary MLS listings sold at or above list price last year.

Still, Clark cautioned real estate agents to be honest about market strengths and weaknesses. Of 191 communities in Calgary, 107 did not show marked price increases in 2005. "We talk about the 84 (communities posting dramatic increases) but we must be sensitive to the big picture of the city as a whole."

Given continued pressure on sought-after communities, he also warned real estate agents to watch for what he calls "sleeper communities," those neighbourhoods especially well positioned to generate increased demand as prices in other neighbourhoods rise.

Citing research that shows home ownership is linked to personal pride, a desire to live in strong neighbourhoods and a basic understanding of home ownership as the strongest contributor to personal wealth, Lee dismissed comparisons of contemporary real estate market strength to the boom-and-bust cycles of the stock market.

He noted two well-documented cases of dramatic and sudden declines in residential real estate prices. One occurred in California after the fall of the Berlin Wall (and the loss of hundreds of thousands of defence jobs); the other in Calgary following massive energy-industry job losses in the early 1980s.

With similar market-breaking conditions not on the horizon, Lee predicts housing prices in the U.S. and Canada will "keep rising as long as jobs and income growth continue to offset changes in the interest rate."

Talk of rising interest rates must also be put into perspective, stresses Lee. With interest rates still at historic lows, Baby Boomers in Canada and the U.S. continue to "view housing, and they should, as a safe and secure investment."

Lee's presentation also looked at how Canadian and U.S. housing markets are affected by the influx of foreign-born Baby Boomers who want to buy property in countries that offer economic stability.

People aged 25 to 44 form the largest percentage of immigrants, a fact that also bodes well for housing markets, as many are in what Lee calls "their peak earning years.”

Eighteen per cent of this demographic buys a home in the first 18 months of residence, notes Lee.

Noting statistics that show second-generation immigrants tend be higher educated and earn higher incomes than their parents, Lee says the residential real estate industry has much to gain from courting this group's business.

Building on Clark's admonition that real estate agents should pay attention to the current market and seek success through a better understanding of their business and their clientele, Lee spoke about the need to "build inclusive environments" better able to work with the language and cultural differences of a diverse population.

Himself the son of a Korean immigrant father and a U.S.-born Korean mother, Lee says the real estate industry on both sides of the 49th parallel need to grow their businesses by recruiting minorities.

Lee also reminded conference-goers to make sure they reap maximum benefits of new technology. He says a recent study of Internet use shows 100 per cent of buyers expect a response to a virtual query within one business day. Half of them actually expect a response within two hours - and 24 per cent of users say they chose their real estate agent on the basis of who responded to their query first!

Details of Kevin Clark's presentation at the Forecast 2006: Conference & Tradeshow, including an overview of Calgary's commercial real estate market, are available on the CREB website.

Web Watch: www.creb.com

(Joy Gregory can be reached at joy@businessedge.ca)