A TD Economics report released yesterday declares Canada's housing boom to be over and certainly over the summer, you're going to hear about declining average house prices in Calgary.

This will undoubtedly give rise to speculation the housing 'bubble' has burst, the bottom has fallen out of the market, the sky is falling and a bunch of other adages proclaiming the end is near, none of which are or will be true.

That's because, over the summer, average single-family house prices will be compared to last year's average prices, which, in July '07, hit an all-time high of $505,920, at the peak of a demand cycle that started in late 2005.

From the heights of last July, the average price declined to about $445,000 by December, then started rising again in January and was slightly above $470,000 yesterday.

Despite the gradual increase this year, comparing prices year to year will show them to be down.

But that's much the same as telling someone turning 50 years old they're only one year older than last year -- while it's true, the fact is the birthday girl or boy isn't thinking about last year -- she or he is thinking about 10 or 15 years ago, when fewer things ached and white-out was in a small bottle, not on the top of the head.

Which is the type of thinking needed to better appreciate the housing market -- what it did last year is not necessarily a true indication of its strength. Real estate requires a long-term view and an understanding of the dynamics that drive the market.

You don't need to go back too far -- five years will do. The average price of a single-family house in Calgary in July 2004 was $242,442, rising to $272,846 in July 2005.

In the fall of 2005, the real estate market went into a frenzy, with the average price in July 2006 hitting $418,998, then reaching the record set last July, an 85% increase from July '05.

And then the frenzy ended.

Demand since about this time last year has subsided dramatically, with prices coming down from last summer's highs, which you can expect them to continue to do this summer.

Which they should, because last year they were too high. And a great many houses are still listed at too high a price today. Too many sellers are looking for the big score from their homes and have them priced above true market value, which is probably somewhere between the average of about $419,000 in July '06 and today's $470,000.

So, when you hear about house prices being down this summer compared to last summer, remember: Real estate is a long-term proposition.