With falling markets and failed bail out plans taking centre stage in the press, it is reasonable to assume would-be homeowners here in Canada might be leery of getting into the real estate market at this point in time.

Calgary is definitely experiencing a buyer’s market situation, which is evident by the number of houses for sale that just aren’t moving, yet buyers seem slow to take action. Is it the overwhelming inventory that is keeping buyers at bay? Or the lack of a motivational factor, such as the rising costs and bidding wars of the past? Or is it the fear around international real estate markets and a concern that Canada may be heading in that direction too?

Perhaps all of the above are factoring into the reluctancy some buyers are experiencing that has them still sitting on the fence.

The truth is that Canada’s and the United States’ real estate markets are dramatically different in a number of significant ways, but unfortunately that message seems slow to get across to Canadian readers, perhaps because fear mongering headlines tend to sell more papers.

The largest contributing factor to the U.S. mortgage meltdown is the subprime explosion, which according to data released by Benjamin Tal, senior economist with CIBC World Markets, accounted for no less than 33% of American mortgage originations.

Alternatively, Canada’s subprime mortgage count is estimated to have not exceeded 5.4% of total originations while at its peak.

Mortgages such as the NINJA mortgage were common to American lenders, the acronym meaning no income, job or assets were required for approval.

I suppose the beauty of hindsight is always clear, but it does seem quite evident that without income, one might not be in the position to repay the mortgage loan. These types of underwriting guidelines thankfully never occurred here in conservative Canada.

Couple this with the fact that Canadians as a whole tend to carry less consumer debt than their American neighbours, and according to a study recently released by Scotiabank, Canadian home equity on average is almost 70% of the current residential values, meaning on average, Canada’s total mortgage debt is approximately 30% of the total value of Canadian homes. This equity position has in fact increased over the last decade’s percentage of about 66%.

Flip to the south side of the border and we see that home equity has been dramatically decreased to approximately 45% throughout the nation.

Much of this erosion was because of home equity lines of credit, in which homeowners created an unsustainable bubble of spending throughout the American economy.

Employment is also stronger in Canada than in the United States. Our employment-to-population ratio has been rising over the last decade from just below 60% in 1998 to over 63% in 2008, setting new record highs every year from 2003 to 2008, according to Statistics Canada.

With a larger base of employed individuals in Canada, our debt level and credit history is stronger, and as a nation we have more qualified homebuyers to choose from.

It is true we have seen house prices come down in value here in Alberta, but that does not mean we are experiencing a crisis. It simply reinforces that all markets, including real estate, are cyclical in nature.

For those who bought in the peak of 2006 to 2007, it may make sense to not sell right now, but perhaps consider renovating if your needs have changed.

Real estate is intended to be a long term investment and the timing of a sale is important.

For those prospective buyers that were priced out of the real estate market during the past few years, 2008 is a dream come true.

Purchase prices are lower, volume is plentiful, sellers are ready to negotiate and our Canadian real estate market is secure.

Don’t let fear mongering keep you away from what is potentially one of the best times to buy that Calgary has seen in the past few years.

–Sharon Essington is a Mortgage Consultant with Canada Mortgage Direct. Sharon specializes in providing a creative approach to mortgage financing for individuals looking to improve their lives through real estate. For more information on this topic, or to discuss your individual mortgage needs, please call 403.239.8250.