Forty clicks outside of Calgary, where the rich O&G execs used to flee to their estates in Priddis, things are unhappy. It was just twenty months ago, when oil was $100.55 a barrel, that Sotheby’s listed the most expensive house ever to hit the market in Alberta – $38 million for a 5,000-foot pile of excess on 200 acres of ranchland.

Things sure look different when viewed through the lens of $46 oil. If a recent auction means anything, and it seems to mean plenty, luxury real estate has also declined by more than half. Ten weeks ago an auction in Priddis saw a $2.9 million, 5,500-foot mansion sell for a discount of 62%. The buyer paid $1.1 million – the price of a dumpy 1970s Vancouver Special. A neighbouring estate suffered the same fate, tumbling from $3.9 million to a mere $1.5 million, or less than the materials used to build it.

Appraised $2.9 million, sold $1.1 million

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Neither sale was included in stats compiled by the Calgary Real Estate Board. That’s helped Cowtown realtors maintain the fiction that prices dipped a little as oil collapsed, but have since stabilized with the market able to “weather the storm.” The official count to the end of October looks like this: sales down 31%, listings up 19% and average prices lower by just 6%. This is amusing, and bitter, to people who can’t sell their homes unless they’re willing to take a discount closer to 15%.

Plus, there’s more to come.

Shell pulled the plug on a major energy project last week, walking away from an investment of $2 billion. Weekly we hear of more majors punting workers. It looks like the oil patch has so far shed 11% of its workforce – some of the best-paying jobs in the nation. Alberta lost about 54,000 jobs in the past 12 months, or 3% of the entire workforce, and Saskatchewan almost 7,000.

No wonder the number of folks moving to Alberta has crashed 50%, or that real estate values in most of the province – along with Saskatchewan – will follow. Nor is the rest of Canada immune, as this pathetic blog has been trying to point out for a while. In vain.

Everybody should pay attention to what’s going on. Oil – our largest export – has lost more than half its value. Thus, our national income has dropped. Prices for copper, nickel and grains have fallen 50% or more within the past five years. Now we have slagging demand in China, where GDP growth has fallen the most since the financial crisis. Construction and manufacturing activity in that country – the largest consumers of steel, zinc and copper – have plopped.

There are 400,000 more tons of copper being produced a year than the world needs. The US has so much oil (and is running out of places to put the stuff) that it will soon begin selling off a hunk of its vast underground strategic reserves. And the weird thing is that unlike the last time we had a commodity collapse (2009) the world is now growing and expanding, not contracting into recession.

This suggests the commodity surplus might be structural. We’ve become too efficient at digging up, growing and sucking stuff, while at the same time personal technology is changing the world. Like shuttering stores and sending retail sales online.

Maybe this will ultimately be good for the planet, but it’s tough news for a country which has lots of land, oodles of commodity resources, and relatively few people, busy selling each other million-dollar houses with borrowed money. Look at the at StatCan’s latest payroll report. Damn scary.

BTW, don’t confuse the government’s ‘labour force survey’ with its ‘payroll employment and hours’ survey – they’re different ways of measuring essentially the same thing. The first one showed a modest jobs gain in August, and the latter is evidencing a jobs disaster – the loss of 58,600 positions in the same month. The media feeds off the first one. Economists believe the second is closer to the truth, since it includes actual data from the CRA.

So, here’s what to focus on: wages for Canadians as a whole are shrinking (by about 8% a year), and in the last 12 months we created 0.3% more jobs while the population increased 1.3%. At the same time, the value of our exports declined, decreasing national wealth. So we did what? We elected a government promising to fix things by taxing the successful, spending billions a year we don’t have, making it harder for citizens to save and giving people money for having children. At least we’re amusing.

I think they’re getting all this in Priddis. Losing half your equity does that.

Of course, the really smart money saw it coming. Still does.