Your thoughts on the current real estate market

[Chim]

I'll have the means to buy up some property in January, but I really can't tell if current real estate prices are realistic or if we are in a bubble scenario.

Your thoughts - bullish or bearish, and why?

[Akagi Redsuns]

With anything, you want to buy low and sell high. With prices almost doubling over the last 2 years, it's not exactly a great time to buy.

I think Calgary real-estate is over priced and with too many speculators in the market. Would be interesting to know how many of the condo sales and house sales are made by buyers that are planning to live in them and not flip them for profit.

[01RedDX]

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[pinoyhero]

You're all right, a ton of specs in the market right now. In a propoer market the renter should send a signal by not pyaing so much and thus the specs would get squeezed, however with the socialist government we have elected who is givig out free rent, the market will not be able to act propoerly/efficiently so this inflated state will be around longer than it should be.

[turbotrip]

i dont think the prices will be dropping significantly in the near future so u might aswell buy. Calgary just caught up to the other big cities across canada in house prices.

[ZorroAMG]

Originally posted by 01RedDX


I really think a lot of speculators in Calgary are gonna get the rug pulled out from under them soon (at least I hope so.)

That's real nice. You obviously don't own any real estate.....that's not the market's fault.

[davidI]

Not only do I see a lot of speculation in the market, I also see the Calgary economy taking a hit as things slow down in the oil patch. Yes, there are still high oil prices, but companies are also posting reduced profits (some even losses) and well counts have been steadily declining over the last year due to the high operating costs in Alberta. Unfortunately, none of this is good news for me because both my brother and I are looking at purchasing our first condos/homes.

My other thought is that condos are not as good an investment as homes. There has been a lot of condo construction and it's relatively easy to put up a new building close to downtown. It's not so easy to find the land for home construction and even though there have been a lot of infills going up, this doesn't account for many units. I think any homes near downtown continue to be a good investment opportunity but that takes a large amount of capital (speculators haven't inflated the house market as much because of this).

Once again, this sucks for me because I don't have the $400k+ for a home.

Oh, other thing to be taken into account is the interest rate. I see it going up another half point + over the next year. Unfortunately, real estate is just like any other investment and there are lots of risks, I personally do not think this is the time to invest...but if you need a place to live as I do, you don't have much choice!

[Thaco]

people said this 4 months ago when i bought my condo for $207.000, they said it's a bad time, the bubble burst is coming, dont buy it's too risky... and now 2 identical units in my complex, recently renovated (just liek mine) are listed at 240,000 and 260,000 with the same sq footage and basically the same floor plan (townhouse condos so they're all the same)

So the way i see it, if these sell for anything near their asking prices, i'm making like a bandit. a minimum of $30k in just over 4 months.

The bottom line is, Do not hesitate, every day you wait is lost money, the housing market is highly unlikely to actually DECREASE in value, flat line, maybe, but very unlikely it'll ever decrease.

[max_boost]

Buy a home for shelter. No sense in waiting if you are looking for primary residence. Everyone talks about how much their homes have increased by but personally, it doesn't matter if my house is worth $100K or $1million more than before because I'm not moving anywhere!

[TegLover]

Originally posted by ZorroAMG


That's real nice. You obviously don't own any real estate.....that's not the market's fault.

:werd: :werd: :werd:

[Mangina]

Originally posted by Thaco


The bottom line is, Do not hesitate, every day you wait is lost money, the housing market is highly unlikely to actually DECREASE in value, flat line, maybe, but very unlikely it'll ever decrease.

+1. Anyone telling you to wait is a fool. Although, late fall and early winter are a good time to buy. Don't expect prices to drop to the levels we saw a few years ago, EVER!!

[D. Dub]

Originally posted by max_boost
Buy a home for shelter. No sense in waiting if you are looking for primary residence. Everyone talks about how much their homes have increased by but personally, it doesn't matter if my house is worth $100K or $1million more than before because I'm not moving anywhere!

:thumbsup: Exactly.....

If it's your primary residence and you're planning on staying in Calgary for the long term --- it really doesn't matter.

If you're looking to flip a property -- this is not the time or place.

[88CRX]

Originally posted by D. Dub

If it's your primary residence and you're planning on staying in Calgary for the long term --- it really doesn't matter.

Exactly... people need to understand that first it's your home then second its an "investment".

And if the housing market has a correction or crashes I'd imagine a heck of alot of people will be out of jobs as the whole economy will stumble. Is that what people actually want?

[rc2002]

Originally posted by Thaco
The bottom line is, Do not hesitate, every day you wait is lost money, the housing market is highly unlikely to actually DECREASE in value, flat line, maybe, but very unlikely it'll ever decrease.

Flat lining is the same as decreasing. If house prices flatten, the real value of your house is actually falling.

[HRD2PLZ]

I would still buy in this market. Prices are coming down a little bit in some areas yes, but as previously mentioned, if your looking for a primary residence and you are planning on sticking it out here for a while getting into the real estate market isn't a bad idea. For investment purposes only, it really depends what your ultimate goal is. People keep referring back to the market we had in the spring/summer of 2006, which completely took Calgary by storm. The chances of seeing that again in the near future are slim to none. What we would like to see is a steadily increasing real estate market.

[sputnik]

Originally posted by ZorroAMG


That's real nice. You obviously don't own any real estate.....that's not the market's fault.

Exactly. Everyone I have met that cries "bubble" are those that don't own real estate and regret buying and pimping out their Honda before at least buying themselves a condo.

The market IMO won't fall. Even if it "corrects" it won't be that much (3-5% tops). The market will just slow down and houses will take 4-6 weeks to sell instead of 4-6 days. We are seeing that starting now, but house prices aren't dropping (with the exception of those that have priced their suburban houses higher than the cost to build the same house new).

Real estate is still a safe place to put your money in Calgary. Don't let the fools tell you otherwise.

[sputnik]

Originally posted by richardchan2002


Flat lining is the same as decreasing. If house prices flatten, the real value of your house is actually falling.

In the short term (1-2 years). Yes.

In the long term (10+ years) you will see a pretty steady upward climb.

This is no different than any financial market. All have ups and downs but (historically speaking) if you hold on after a drop you still end up higher in the long run.

[bamboo403]

i think the correction will be low because regardless of speculators they still cant keep up in the new home development side of things.

[sputnik]

Originally posted by bamboo403
i think the correction will be low because regardless of speculators they still cant keep up in the new home development side of things.

The other reason is that in order for the market to drop there has to be a LOT of people desperate to sell at a lower price.

So the only way you will see a drop in Calgary is if a lot of people start losing their jobs and leave Calgary.

[Xtrema]

Market is cool right now because there are over 6000 listing right now compare to last year's < 2000. Lots to choose from and lots of bargaining power on the buyer side.

When you see Tim Hortons and Burger King start taking down their hiring sign, then it's time to sell.

If you are paying rent right now and plan to stay in city for 5+ years just buy it. Instead making landlord rich, may as well own something.

[Pacman]

Originally posted by Xtrema

If you are paying rent right now and plan to stay in city for 5+ years just buy it. Instead making landlord rich, may as well own something.

I always wonder about this. Is it better to pay rent, or buy a house and pay 6% interest on a $400k mortgage each year.

[Thaco]

Originally posted by Pacman


I always wonder about this. Is it better to pay rent, or buy a house and pay 6% interest on a $400k mortgage each year.

it might cost you 6% a year on whatever is left owing, but you're gaining 7-9% a year on the full value of the house, you do the math.

[max_boost]

Originally posted by Pacman


I always wonder about this. Is it better to pay rent, or buy a house and pay 6% interest on a $400k mortgage each year.

It all comes down to numbers and whether you can comfortably afford a $400k home.

I have some tenants that want to stay in their place for a long long time. If they didn't buy a house when it was $200K then they sure as hell aren't going to buy when it's $400k! haha

You can probably get away with renting a place for $1500/month including utilities and that's it! Mortgage, property taxes and insurance on a $400K home on a 30 year amortization will cost you over $3000/month!

Big difference. :drama:

[Redlyne_mr2]

Its all the fault of the baby boomers, if youre struggling to buy a place and you still live at home then punch your parents in the face when you get home tonight.

[finboy]

Originally posted by Redlyne_mr2
Its all the fault of the baby boomers, if youre struggling to buy a place and you still live at home then punch your parents in the face when you get home tonight.

looking forward to it :thumbsup: :rofl:

[TrevorK]

Originally posted by Pacman


I always wonder about this. Is it better to pay rent, or buy a house and pay 6% interest on a $400k mortgage each year.

It would depend on what you plan on renting.

If you rent out a room for $400-500/month, then you're probably much better off renting rather than buying.

If you rent out a house for $1800-$2000/month then you're probably better off buying than renting.

[01RedDX]

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[pinoyhero]

Originally posted by 01RedDX


Sorry I didn't think anyone would take that personally. I have a very strict definition of a speculator, for example one who buys a block of 10+ condos from their developer friends at insider prices before they are even up for sale. This creates an unfair situation, especially since condos are usually the entry point for low income/first time buyers.

But I do own a primary and a rental, so that swipe at my social status was unnecessary.

Insider prices ... unfiar ... hmm, do you really think that the guys selling and building the condos are building them for the poor? This is an insane comment, if a seller wants to sell a large lot at a quantity discount (not new concpet by any means) then they should go right ahead. If you dont like it, the tax payers of the city have built a nice 4 star hotel you can stay at free of charge. Its crazy that people who dont have money have this sense of entitlemnt over and above those who have worked/invested hard/smart.

[turbotrip]

Originally posted by 01RedDX


Sorry I didn't think anyone would take that personally. I have a very strict definition of a speculator, for example one who buys a block of 10+ condos from their developer friends at insider prices before they are even up for sale. This creates an unfair situation,

lol life is unfair buddy, the people you described are smart investors

[01RedDX]

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[01RedDX]

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[Mangina]

Originally posted by 01RedDX


I think it's crazy how you like to make assumptions in every thread.
I will always stand up for the poor, if you don't like it, tough shit.

Poor people are dumb and/or lazy. Stick with what you know fella.

[pinoyhero]

Originally posted by 01RedDX


I think it's crazy how you like to make assumptions in every thread.
I will always stand up for the poor, if you don't like it, tough shit.

I make no more or less assumptions than anyone else. Rather than stand up for the poor on beyond, why dont you quit your job and become a full time volunteer at the 4 start hotel the tax payer built for them. Or better yet why not continu to work and donate the money over and above what you "need" to live to the poor?

[483hp]

A few observations I have made since I am in the market to trade up. You can make your own conclusions:

- There are about 6000-9000 active homes and condos for sale in Calgary depending on who you believe. Regardless of the actual number, it is a lot more compared to last year.
- Nobody will disagree that sales activity is going to cool from now to the end of the year (even CREB). It always does every year. Therefore we should see prices backtrack a little bit in the next few months.
- Stats indicate that homes selling over asking price are about 4% of the total volume.
- Premiums paid over asking price lately are nominal amounts.
- Discounts agreed under asking price lately are very significant with many around 10-15%. The numbers are big in some cases with discounts reaching 20-30% in the past few weeks of sales. And we aren't talking about slums or undesirable areas either.
- Prices in outlying areas and surrounding towns are starting to moderate, but have not "crashed". A postive indicator.
- There are a lot of people listing homes to "see what they can get". There doesn't seem to be a real sense of urgency or a reason to sell with many listings. This will slow any negative momentum in the median selling prices reported in Calgary. However, this may also reflect general public sentiment that we are "at the top".
- There are a lot of re-lists with lower prices (with significant decreases). There are some re-lists with higher prices as well, but not many.
- There is speculation in the market. That is obvious. A news article recently stated that in Calgary over 30% of listed single family homes and over 40% of listed condos are unoccupied. Obviously these aren't all speculative, but it can't be all due to people trading up without the need for a conditional sale either.
- There is a clear disconnection to fundamentals if you intend to be a landlord at current prices. Monthly cash flow to carry a property is well above the recovery from rent. Historically, prices stabilize when rent covers your costs for the property. However, a market can stay irrational for a very long time.
- Any speculation, therefore, must be betting that the appreciation > the cash flow to carry + liquidation costs over a short period of time. Therefore, speculation will be sensitive to market momentum. As resistance to higher prices increases with additional month over month increases reported by the realtors, we should see a shift towards sites like welist and comfree. In fact, it appears to have happened already.
- It appears (atleast to me anyways), that the sweet spot for real estate in Calgary is somewhere between 250K to 375K in Calgary. When homes were in and around this range, activity was high until they clearly exceeded it. Then condos got more popular. Condos are now in the upper part of that range and we now start to see media coverage of unaffordability concerns and rent gouging.
- The attitude in the media is neutral today (but not negative). Unaffordability seems to be a popular topic in the media. Last year it was "the sky is the limit".
- Home builders are now listing unfinished homes and yet to be constructed homes for sale with greater frequency (especially in the high end). This didn't happen as much last year.
- Historically, the value of homes have never outperformed inflation or wage growth by a significant factor. If it did, it wouldn't take long before prices were permanently out of reach for everyone.
- Affordability relative to the consumer's expectation is a concern.
- The average price for a home is around $500K now. Prices exceeded the average household's ability to pay long ago. The introduction of mortgages with longer amortization periods, etc. deals with this issue, but only temporarily.
- Credit should tighten due to what is happening in the US. This can be both positive and negative.
- It is more difficult to hire now in the age group that is typical of this forum. There is no question about that in my personal experience. Many younger people are frustrated and move elsewhere after they get their education and/or enough experience. The percentage choosing arbitrage is high right now.


The big test of this market will be what happens in the spring when activity traditionally ramps up again. It may continue upward, it may not. If price momentum is negative in this cycle, watch out! Real Estate is not what I would call a liquid investment in this scenario. The average days on the market is increasing and is over 30 days right now.

[whodiman]

Originally posted by Redlyne_mr2
Its all the fault of the baby boomers, if youre struggling to buy a place and you still live at home then punch your parents in the face when you get home tonight.

This is class. I love it!!!

[kaput]

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[Kartelli]

^ when somebody lists their house for 80k over retail market, and sells it to you for 60k "under listed value" ... one would think the owner still made 20k profit in todays current market.

I wouldn't get too keen on saying you got a "deal" unless you bought a propery listed at 120G and you got it for 60, or something alone those lines.

[sputnik]

Originally posted by kaput
My family just picked up a place for $60k less than their original asking price. It was dropped by $50,000 by the time we saw it and settled for another $10k below that. Hopefully thats an indication of whats to come because I still can't even afford the reduced prices.

That depends on what the other houses in the neighbourhood with comparable features are selling for.

Just because the price was knocked down by $60k doesn't necessarily guarantee that you paid under market value for the house. Anyone can inflate the listing price of a house.

[483hp]

Here's a selection from the past week and a half. $60K is not outrageous.

$ Amount
Under
Orig. List | % Under | Sale Date | Community
48,900 10% Aug 5 Scenic Acres
164,900 21% Aug 3 Bankview
229,900 27% Aug 3 Bayview
99,000 12% Aug 3 Willow Park Estates
45,900 12% Aug 2 WestGate
59,900 12% Aug 2 Royal Oak
157,900 24% Aug 2 Signal Hill
530,000 32% Aug 1 Winston Heights
84,000 13% Aug 1 South Calgary
51,900 14% Aug 1 Country Hills
41,900 14% Aug 1 Point McKay
48,900 12% July 31 MacEwan Glen
75,900 16% July 31 Canyon Meadows
89,900 14% July 31 West Hillhurst
74,900 18% July 28 Crescent Heights
695,000 32% July 28 Mount Royal
419,000 32% July 27 Edgemont
245,000 19% July 27 Britannia

[Thaco]

Originally posted by 483hp
Here's a selection from the past week and a half. $60K is not outrageous.

$ Amount
Under
Orig. List | % Under | Sale Date | Community
48,900 10% Aug 5 Scenic Acres
164,900 21% Aug 3 Bankview
229,900 27% Aug 3 Bayview
99,000 12% Aug 3 Willow Park Estates
45,900 12% Aug 2 WestGate
59,900 12% Aug 2 Royal Oak
157,900 24% Aug 2 Signal Hill
530,000 32% Aug 1 Winston Heights
84,000 13% Aug 1 South Calgary
51,900 14% Aug 1 Country Hills
41,900 14% Aug 1 Point McKay
48,900 12% July 31 MacEwan Glen
75,900 16% July 31 Canyon Meadows
89,900 14% July 31 West Hillhurst
74,900 18% July 28 Crescent Heights
695,000 32% July 28 Mount Royal
419,000 32% July 27 Edgemont
245,000 19% July 27 Britannia

So a $2 million house sold for 1.4, WOW someone's a smooth negotiator

[sputnik]

Looks like most of those houses were originally listed for $600k to over $2M and several are close to downtown.

It is not unusual to see a house listed for $2M go for $1.5M. Although it might seem like a huge drop it is the potential buyer that will dictate the house value since there are usually few "comparable" houses on the market.

Houses in newer areas will be a much tighter market because most of the houses are very similar and have common characteristics. I would guess that if you took the houses sold in McKenzie Towne or Cranston that you will see much smaller drops in price.

[KappaSigma]

Originally posted by 483hp
Here's a selection from the past week and a half. $60K is not outrageous.

$ Amount
Under
Orig. List | % Under | Sale Date | Community
48,900 10% Aug 5 Scenic Acres
164,900 21% Aug 3 Bankview
229,900 27% Aug 3 Bayview
99,000 12% Aug 3 Willow Park Estates
45,900 12% Aug 2 WestGate
59,900 12% Aug 2 Royal Oak
157,900 24% Aug 2 Signal Hill
530,000 32% Aug 1 Winston Heights
84,000 13% Aug 1 South Calgary
51,900 14% Aug 1 Country Hills
41,900 14% Aug 1 Point McKay
48,900 12% July 31 MacEwan Glen
75,900 16% July 31 Canyon Meadows
89,900 14% July 31 West Hillhurst
74,900 18% July 28 Crescent Heights
695,000 32% July 28 Mount Royal
419,000 32% July 27 Edgemont
245,000 19% July 27 Britannia

Hey where did you get that info from?

[483hp]

Some transactions from yesterday + some older sales in the outer 'burbs.

$ Amount
Under
Orig. List | % Under | Sale Date | Community
190,000 14% Aug 7 Mckenzie Lake
90,000 10% Aug 7 Discovery Ridge
81,900 11% Aug 7 Lake Bonavista
74,900 12% Aug 7 Richmond Hill
91,900 19% Aug 7 Taradale
69,900 17% Aug 7 Cedarbrae

64,000 15% July 20 Deer Run
60,000 12% July 18 Lake Bonavista
109,900 16% July 10 McKenzie Towne
158,483 22% July 9 Edgemont
104,500 27% July 8 Taradale
56,500 14% June 30 Glenbrook
69,000 11% June 30 Citadel
139,000 14% June 27 Varsity
66,000 15% June 26 Temple
140,000 16% June 26 Chaparral
160,000 23% June 24 Valley Ridge
50,900 11% June 24 Mckenzie Towne
55,000 10% June 17 Royal Oak
79,325 14% June 17 Evanston
54,900 11% June 16 Copperwood
61,900 12% June 15 Taradale
64,800 12% June 15 Douglasdale Estates
79,900 11% June 15 Tuscany

[483hp]

To be fair with the data I am presenting, there are people paying over the asking price too. Here is some data for the larger numbers in the 'burbs only. The amounts quoted are premiums agreed to on top of the current asking price at the time of sale (which may have prior price reductions).

Are there bidding wars? There still seem to be, but fewer of them and they aren't as heated.

Amount
Over $ | % over | Sale Date | Sale Price | Community
9,000 3% 04-Aug 344,000 Lake Bonavista
105,000 10% 03-Aug 1,200,000 Discovery Ridge
11,000 2% 01-Aug 520,000 Christie Park Estates
60,100 6% 01-Aug 1,010,000 Varsity Estates
15,000 2% 24-Jul 924,000 Willow Park
25,100 5% 23-Jul 490,000 Country Hills
35,000 2% 23-Jul 1,525,000 Aspen Woods
10,100 3% 20-Jul 410,000 Tuscany
15,100 3% 17-Jul 490,000 Coventry Hills
15,221 4% 09-Jul 415,121 McKenzie Towne
10,100 3% 09-Jul 360,000 Woodlands
20,100 3% 30-Jun 620,000 Edgemont
21,000 2% 30-Jun 920,900 Edgemont
10,100 4% 29-Jun 260,000 Braeside
17,575 5% 27-Jun 398,075 Arbour Lake
60,000 6% 27-Jun 1,009,000 Signal Hill
15,000 2% 26-Jun 630,000 Springbank Hill
15,100 2% 23-Jun 625,000 Harvest Hills
30,100 10% 18-Jun 330,000 Rundle
33,100 12% 18-Jun 301,000 Edgemont

[khtm]

^ What's your interest in all of this? Are you a real estate agent? Mortgage broker? Guy who missed the boom, rents an apartment, and is trying to convince himself that it's all going to crash soon so he feels better?

[483hp]

I have a great interest in this because:
- I want to move up myself from the home I currently own and need to identify a reasonable target price for negotiations, and
- I employ a lot of professionals who also want to buy or rent a place to live

I don't have anything to do with the real estate industry.

Affordability of shelter directly affects the compensation requirements in my business and it is a specific point of high stress for my employees so I keep my ear very close to the ground on this topic.

There is so much misinformation out there, scare tactics, manipulation of numbers, etc. and there really is no data that is presented in a fashion that you can digest it to make up your own mind.

There was a simple question asked at the top of this thread and I provided some information.

So here you go. No agenda. Plain and simple figures. There's lots of information in it and in my first post if you choose to analyze it further.

[googe]

Originally posted by 483hp
- Historically, the value of homes have never outperformed inflation or wage growth by a significant factor. If it did, it wouldn't take long before prices were permanently out of reach for everyone.

i disagree with that point. there are many markets that people have been "permanently" priced out of homes. as available land decreases and population increases, it has, must, and will happen. vancouver is the obvious example, but inner city calgary has certainly done the same thing.

thats why condos are getting more popular, smaller, more expensive, and why we have 40 year mortgages just now.

[01RedDX]

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[khtm]

Originally posted by 483hp
I have a great interest in this because:
- I want to move up myself from the home I currently own and need to identify a reasonable target price for negotiations, and
- I employ a lot of professionals who also want to buy or rent a place to live

I don't have anything to do with the real estate industry.

Affordability of shelter directly affects the compensation requirements in my business and it is a specific point of high stress for my employees so I keep my ear very close to the ground on this topic.

There is so much misinformation out there, scare tactics, manipulation of numbers, etc. and there really is no data that is presented in a fashion that you can digest it to make up your own mind.

There was a simple question asked at the top of this thread and I provided some information.

So here you go. No agenda. Plain and simple figures. There's lots of information in it and in my first post if you choose to analyze it further.
Thanks for the explanation. You do provide good info.

[jmc]

Originally posted by max_boost
Buy a home for shelter. No sense in waiting if you are looking for primary residence. Everyone talks about how much their homes have increased by but personally, it doesn't matter if my house is worth $100K or $1million more than before because I'm not moving anywhere!
I have been looking for a full sxs duplex that would meet all my requirements for awhile now. Even when I am willing to pay $450k for each half, I can't find anything that would meet all my specifications (not even looking for anything big or downtown).

[D. Dub]

Originally posted by 01RedDX


You call them smart investors, I call them scammers. There is a reason why some forms of insider trading is illegal.

Scammers??? WTF are you talking about???

Seeing as he OWNS THE PROPERTY a developer can sell to who-ever he wants to, at any price he wants to.

It is not unfair, illegal, unethical or anything of the sort.

It's HIS property fer crissake. He can give it away if he wants to.

[01RedDX]

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[googe]

Originally posted by 01RedDX

At a time when you have more working people using the food bank than anywhere else in the country

:bullshit:

Source?


You want to talk about immoral, don't bother with real estate. Go for the root of the cause, the oil and gas industry. Real estate in Calgary is just a small symptom of that huge capitalist beast. They're making sick money hand over fist. The bonuses, benefits, and expenses of even the bottom rung employees could do a lot in the way of providing food and shelter for a member of the "working poor". Most oil companies now even allow women to expense boob jobs, not even kidding :)

[Killa_Kam]

is 40 years the longest term you can take right now? if yes?
how much of a monthly paymnet would that be on a house worth $300,000.

thanks

[khtm]

I think 01RedDX is confusing Calgary with Vancouver, which has the highest percentage of full time employees living below poverty.

Easy mistake to make.

[turbotrip]

Originally posted by 01RedDX


I assume you read the thread title: Your thoughts on the current real estate market. If you, and the other real estate boys on here don't like some of the things you're hearing, may I suggest you start a thread called Real Estate Boys Club where you can pat each other on the back and high five each other. Only opinions were requested here, so you might get some people who would dare to suggest that some aspects of this industry can be *gasp* unethical. But I am not passing judgment on you or anyone else, only certain aspects of the industry as a whole.

That's WTF I am talking about.

haha its cool that u have an opinion, but be honest with yourself you dont know what your talking when it comes to this subject, so why post just to see urself typing?

[Antonito]

It's one thing to question the strength of the market, it's a whole other to pretend like developers owe people anything other than what they say they will provide on a case by case contractual basis.

Also, if you can't make it in Calgary, you are either stupid or have issues that are not in any way the fault of the economy (debt, drugs, alimony, disability, etc). Anyone that has a job and is still going to food banks is a failure at life or stupendously unlucky

[01RedDX]

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[Akagi Redsuns]

Any thoughts on the credit tightening that's going to occur thanks to the US sub-prime meltdown?

If it's harder to borrow a significant amount of money for starter homes/condos, it's going to be hard to sell when people that want to buy simply can't afford them. Face it, not everyone makes over $100,000 /year.

[01RedDX]

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[SilverRex]

here is my take on the market.

the last time I hear from my close relative there are around 7000 listing + on the market and as a general rule of thumb typically if the inventories fall around 5k, that is normal if it reaches beyond that you will see house prices fall.

I agree with someone's post eariler, if you are buying as a primary home to live in, get in as soon as you can but make sure you have enough down payment 15-25%, in case the market turns on you.

right now is a bad time if your buying as investment. since house price rose sharply, I mean sharply, any common sense will tell you price will retrace. Even if it doesnt drop significantly, people will wait until prices become stablize over the course of few years before jumping back in.

I have seen the same 3 houses in my neighbourhood for sale everytime I drive home for the last 2 1/2 month and it is still sitting there with the sign.

If you have the money, its great time to buy since you have vast amount of selections.

But the market will be due for a correction, we just dont know when, but I would hate to be the last guy who gets caught.

there is also the post-olympic factor which typically suggest housing weakness. so for my self I'm waiting till 2010+ before jumping in.

for buyers, here something to think about. right now typical salary is around 40k per person/year with a single residental starting home at around 400k, that is 10 to 1 ratio. Which is quite similar 20 years ago when house price were around 50k and everyone's salary was at 5k.

so really, the market is just catching up, prior to the housing boom, our wages simply out grew the housing sector thats all. so now Ill wait till my wages catch up so that house will become affordable again.

[01RedDX]

.

[max_boost]

Originally posted by Killa_Kam
is 40 years the longest term you can take right now? if yes?
how much of a monthly paymnet would that be on a house worth $300,000.

thanks $300K, 40 year term, 6% rate=$1650 payment

[Akagi Redsuns]

Originally posted by SilverRex
...................
for buyers, here something to think about. right now typical salary is around 40k per person/year with a single residental starting home at around 400k, that is 10 to 1 ratio. Which is quite similar 20 years ago when house price were around 50k and everyone's salary was at 5k.

...............

HUH? Didn't most mortgage lenders say that 3.5 times your salary is the starting point for what you can get? This was a few years ago, did lending standards change that much? Is that why housing prices are stupid right now, because of cheap credit like this? 10 times your salary is ludicrous. How in the world can you afford a typical 25 year mortgage of $400,000 with 25% down ($100,000) while making $40,000 a year? Good luck. The numbers do not jive and you can't tell me that this is "normal" and to be expected.

[Antonito]

^ um, you do realise there are now 0% down mortgages, right? 25% became the exception a long time ago, at least for first time buyers

[whodiman]

I was curious about where you got the stat about houses being around 50k 20 years ago. The house we bought 20 years ago in Regina was a 850 ft bi level, no garage and we paid 80k.

Not trying to slam you but I really am curious where you can find that stat. Also, both of my parents who were cooks at that time were working at places like Smitty's and making 20k each. I remember very well that minimum wage wasn't actually that low at the time. It has only shot up in the recent years. The reason i know about the min wage back then was because I had a minimum wage job in 1989.

I'm also curious where you can attain average salary stats for 1987.

[Akagi Redsuns]

Originally posted by Antonito
^ um, you do realise there are now 0% down mortgages, right? 25% became the exception a long time ago, at least for first time buyers

Yep, knew that for a while, and Scotiabank's commercial before the Simpsons movie. "You are richer than you think", LOL!

So, I guess if you make $40,000/year, you can afford a $400,000 mortgage even with 0% and 40 year amortization? Nope, not even close.

Using TD's mortgage calculator for "How much can you afford" and using 6% interest, 25 year mortgage with 0 down gets you a whopping, $130,248 , which is a far cry from the $400,000 level that SilverRex claims is the "norm". Even with the a 40 year mortgage, the amount jumps to $152,881. Just for fun, the multiplier is 3.25 for TD's mortgage calculator dealing with the 25 year scenario, and all I used is property tax of $1,600 and $1,200 in heating with no other debt.

[Killa_Kam]

Originally posted by max_boost
$300K, 40 year term, 6% rate=$1650 payment
thanks alot

[tentacles]

but make sure you have enough down payment 15-25%, in case the market turns on you.

:confused:

[A790]

Originally posted by Thaco
people said this 4 months ago when i bought my condo for $207.000, they said it's a bad time, the bubble burst is coming, dont buy it's too risky... and now 2 identical units in my complex, recently renovated (just liek mine) are listed at 240,000 and 260,000 with the same sq footage and basically the same floor plan (townhouse condos so they're all the same)

So the way i see it, if these sell for anything near their asking prices, i'm making like a bandit. a minimum of $30k in just over 4 months.

The bottom line is, Do not hesitate, every day you wait is lost money, the housing market is highly unlikely to actually DECREASE in value, flat line, maybe, but very unlikely it'll ever decrease.

No wanting to read the whole thread, I'll just post my comments.

The reality is that you haven't made anything. You *think* that you've made $30K, but in reality, until someone has paid you for your home and you've pocketed the profit, you've built equity. Equity, of course, is subject to market rates. If the market ever crashed again, not only have you not "made" any money, but you've actually "lost" it.

There is absolutely no doubt that the housing market will see a decline in value. The market is going through a prolonged period of hyper-inflated growth, and it isn't sustainable. When the market undergoes a correction (and it will), the values of homes in the market will adjust.

Sorry bud, but it's basic economics. The market only has so much elasticity before it corrects.

[Antonito]

Was the place listed at 207,000 from the get go? And seconded on the notion that it'll mean a lot more if the other places actually sell at those prices rather than merely listing at 260,000. More and more prices are being reduced from their original list price, because people are overvaluing their places. Add in the fact that after selling costs and the money you've spent on the mortgage thus far (assume $1000 a month, in the first year most of that is interest which you are not getting back), and the "minimum $30,000" is a lot less

IMHO, there is still time left to make money, but the days of getting a 100% or more return on the investment are long gone, so if you're looking for a huge amount of profit for no work then you're looking at the wrong place. You can still make money, but it takes patience and it's no longer idiot proof. A lot of crap places have been sitting on the market because supply is growing and people aren't having to settle for garbage anymore.

[SilverRex]

http://www.professorshouse.com/your-home/real-estate/buying-a-home-in-calgary.aspx

here is just a quick august review of the market

[max_boost]

Originally posted by A790


No wanting to read the whole thread, I'll just post my comments.

The reality is that you haven't made anything. You *think* that you've made $30K, but in reality, until someone has paid you for your home and you've pocketed the profit, you've built equity. Equity, of course, is subject to market rates. If the market ever crashed again, not only have you not &quot;made&quot; any money, but you've actually &quot;lost&quot; it.

There is absolutely no doubt that the housing market will see a decline in value. The market is going through a prolonged period of hyper-inflated growth, and it isn't sustainable. When the market undergoes a correction (and it will), the values of homes in the market will adjust.

Sorry bud, but it's basic economics. The market only has so much elasticity before it corrects.

So many people pulling out HELOCs to buy toys, cars and vacation, just wait till they max it out, market corrects even more, interest rates rise, and the banks reduces the available credit. Oh snap! But we wouldn't want it to come to that.

[Super_Geo]

I bought back in March 07, probably at or near the peak of the boom, but I still think it was a good idea.

I locked in at 5.05% for the next 5 years. Interest rates are going up, I hear they're around 6% now, that's 19% higher than it was in March! The rates are going to get a bit higher still.

Personally, I hope the market makes a big adjustment. That way all the speculators and people who have overextended themselves on HELOCs will have to liquidate their properties and toys, and I will be there to pick them up for cheap!

I've met very successful people whose philosophy has been to never sell. Just keep on buying new properties and renting them out. Of course you have to keep your debt ratio in check, but that's what I'm hoping to do.

Live in my current place for 2 years or so, then rent it furnished and buy another property. Rinse and repeat.

[urban.one]

Didnt see this anywhere in this thread....

http://www.canada.com/calgaryherald/news/story.html?id=b8981202-85d7-4fbe-9574-b782bb7bacc9&k=98775


"Calgarians' wealth tied up in homes
Advisers say tapping equity brings pitfalls"

[D. Dub]

Originally posted by 01RedDX


Hey I never said it was illegal, I said some forms of insider trading are illegal. But I am of the opinion that what is happening in the Calgary real estate market is borderline immoral. At a time when you have more working people using the food bank than anywhere else in the country, you would think certain controls would be in place to ensure full time working people are able to have a roof over their head. It is very crass to suggest that that it is just as easy to get into the market today as it was 10, even 5 years ago, and some assholes even say things like all poor people are &quot;mediocre&quot; and stupid and lazy. I am fortunate enough to own property, so am I stupid for not using more of my equity to buy more property? Perhaps.

I assume you read the thread title: Your thoughts on the current real estate market. If you, and the other real estate boys on here don't like some of the things you're hearing, may I suggest you start a thread called Real Estate Boys Club where you can pat each other on the back and high five each other. Only opinions were requested here, so you might get some people who would dare to suggest that some aspects of this industry can be *gasp* unethical. But I am not passing judgment on you or anyone else, only certain aspects of the industry as a whole.

That's WTF I am talking about.


Whoooaaaaa..........slow down there skippy.

Real Estate Boys Club??? :rolleyes:

What is immoral about making money? So you're suggesting we abandon the free market economy b/c Calgary housing prices have climbed when our economy is strong again?

Real estate is one of the places where the basic economic laws actually work for the mostpart. The market will correct and prices will stabilize or drop at some point and salarys will catch up. These things take time.

If you're so concerned with the poor why not buy a house and rent it out below market value??

[Super_Geo]

Originally posted by urban.one
Didnt see this anywhere in this thread....

http://www.canada.com/calgaryherald/news/story.html?id=b8981202-85d7-4fbe-9574-b782bb7bacc9&amp;k=98775


&quot;Calgarians' wealth tied up in homes
Advisers say tapping equity brings pitfalls&quot;

Exactly. Along with higher interest rates and lower housing prices comes cheap BMWs :D

[turbotrip]

so do u guys think that it would be wise to sell a home privately in this market? or stick with an agent?

back when the housing economy was booming we sold all our houses through agents cuz they could force bidding wars, but now that the market has cooled down I think it would be better if we sold them privately and save that 5-10 thousand per house.

[max_boost]

^^^

If you price your home accordingly, it will sell no matter what.

If you have time, I would list it privately.

[Mangina]

Originally posted by turbotrip
so do u guys think that it would be wise to sell a home privately in this market? or stick with an agent?


You will probably lose about 80% of the buyers by not having it on the MLS. Most buyers use agents1

[lewdvig]

Originally posted by Chim
I'll have the means to buy up some property in January, but I really can't tell if current real estate prices are realistic or if we are in a bubble scenario.

Your thoughts - bullish or bearish, and why?

Be value conscious. Don't buy anything that you can not flip and and least get exactly your money back after fees. In Calgary, that will be tough to do.

If I were you, I would look to Saskatoon and Regina. Also the Kootenay area, for some bargains. Do your homework, figure out where urban renewal is happening in those cities and get in early - think Inglewood mid nineties when a nice two storey was $140k.

[Antonito]

In Saskatchewan people are flipping like crazy, more prospectors there than in Calgary by far. A lot of people are going to get burned bad, because at least here in Calgary if you get stuck with the house, well, whatever, you're in Calgary, the money is good, Chinooks to ward off winter, all that. If you get stuck with a house in Sask, you're screwed, I mean come on, it's Saskatchewan. :D

People are buying double wide trailers in Prince Albert for triple what they were worth 6 months ago, and not a single one has been occupied, it's all just people that are pissed they missed the Calgary boom, so they're buying whatever they can afford. Read that again: double wide trailers. As in trailers, not the actual property (you can't buy the trailer lots, you have to rent those). At those prices it's reaching the point where you can much more cheaply ship in one from somewhere where people haven't gone retarded.

Anyways, flip fast and furious in Saskatchewan while the suckers are still pouring in, and get the hell out of there on a moments notice. Considering there is still no guarantee that Saskatchewan will be able to get their crap together and become anything more than the money pit it currently is, it's kind of shaky, so I'd take the quick money rather than long term investing.

[lewdvig]

Quick money is the only kind.

[Super_Geo]

I still think the goal in Calgary now should be long term stability and cash flow. Sure flipping 2-3 years ago would've obvioulsy been the smartest investment (then again, hindsight = 20/20), but now we're basically maxed out as far as this cycle goes.

I'd say wait it out if you can and start saving money. A shitload of new condos just went on the market in the past 60 days, and a lot more are in construction. I am hoping that the market will be flooded with inventory this winter and that by next summer we can see a seller's bidding war.

All you see in the downtown area are new condo developments, and interest rates are going up. I don't think the Calgary market will crash, but it will correct.

[SilverRex]

I love this quote

"One CIBC economist recently predicted that Canadians have become so used to cheap credit that any significant rise in interest rates could increase personal bankruptcies to a level not seen in five to 10 years."


hmm are we following our US counter parts lol

[Xtrema]

Originally posted by SilverRex
I love this quote

&quot;One CIBC economist recently predicted that Canadians have become so used to cheap credit that any significant rise in interest rates could increase personal bankruptcies to a level not seen in five to 10 years.&quot;


hmm are we following our US counter parts lol

It is possible. But interest will only rise either a) free fall of $cdn or b) economy still very hot.

I don't see either happening in 5 years, when most of the people with new homes today renew their mortgage.

As long as the job market holds, people shouldn't have trouble keep their home.

[TC2002]

How much of a direct impact do you think the US housing "crisis" will play in the Calgary market? Can lenders just pull the carpet underneath home owners like that regardless of their excellent credit? Or is this just a play on fear right now for Calgary and new homebuyers?

[Dayclone]

Well the sub prime mortgages as made my stocks drop >< but it went back up today... so heopfully it's okay.

Would someone suggest waiting a little bit here to buy a house due to the flat line that Calgary might be experiencing soon or is already experiencing?

Thanks,
Steve

[max_boost]

^^

Like I have already said, if it's for primary residence, buy it and don't look back. It's not an investment, it's a home in which you will live in for a long time. Who cares if the market corrects or booms again.

Buy within your means and you won't have to worry about anything.

You can only get the best possible price at any given time. No one can predict what will happen later on.

[SilverRex]

Originally posted by max_boost
^^

Like I have already said, if it's for primary residence, buy it and don't look back. It's not an investment, it's a home in which you will live in for a long time. Who cares if the market corrects or booms again.

Buy within your means and you won't have to worry about anything.

You can only get the best possible price at any given time. No one can predict what will happen later on.

i would only agree to the extend that he or she who is purchasing a home does not go without a decent downpayment.

back in the 80s, why do you think alot of people got out of their homes? is it because really they cannot get thru the difficult times?

just for a quick example if they purchased a home back then for 100k and pay 15% interest on it. when the market corrects say 20%, now their home is at 80k, they are not paying 15% interest on 80k but on 100k assuming that is how much they borrow. That is why it only makes logical sense to sell the home, take the loss and re-enter the market at a lower borrowing cost.

[TrevorK]

Originally posted by TC2002
How much of a direct impact do you think the US housing &quot;crisis&quot; will play in the Calgary market? Can lenders just pull the carpet underneath home owners like that regardless of their excellent credit? Or is this just a play on fear right now for Calgary and new homebuyers?

Canada does not have to worry about the subprime fallout (in terms of real estate) because we structure our real estate different. It would be almost impossible for the same situation to occur in Canada given our current regulations.

Now, a large hike in interest rates may cause issues, however being in Alberta it is very unlikely that the BOC would raise rates to the point that it would start bankrupting us because the people down east would already be lining up at the food bank with their lower wages.

[PrezeS_PL]

Originally posted by 483hp
Some transactions from yesterday + some older sales in the outer 'burbs.

$ Amount
Under
Orig. List | % Under | Sale Date | Community
190,000 14% Aug 7 Mckenzie Lake
90,000 10% Aug 7 Discovery Ridge
81,900 11% Aug 7 Lake Bonavista
74,900 12% Aug 7 Richmond Hill
91,900 19% Aug 7 Taradale
69,900 17% Aug 7 Cedarbrae

64,000 15% July 20 Deer Run
60,000 12% July 18 Lake Bonavista
109,900 16% July 10 McKenzie Towne
158,483 22% July 9 Edgemont
104,500 27% July 8 Taradale
56,500 14% June 30 Glenbrook
69,000 11% June 30 Citadel
139,000 14% June 27 Varsity
66,000 15% June 26 Temple
140,000 16% June 26 Chaparral
160,000 23% June 24 Valley Ridge
50,900 11% June 24 Mckenzie Towne
55,000 10% June 17 Royal Oak
79,325 14% June 17 Evanston
54,900 11% June 16 Copperwood
61,900 12% June 15 Taradale
64,800 12% June 15 Douglasdale Estates
79,900 11% June 15 Tuscany

wher did you get this from ?

[Akagi Redsuns]

Originally posted by PrezeS_PL


wher did you get this from ?

I don't know where he got that from, but I look this stuff up at Bob Truman's site at http://www.bobtruman.com/Under_List_Price/page_1702974.html

To be fair, there is also a over-list price section as well.

http://www.bobtruman.com/Over_List_Price/page_1513877.html

[Ripper]

I'm planning on buying my first home in Sept... but the market seems so crazy right now its hard to know what to do. :(

[tentacles]

just for a quick example if they purchased a home back then for 100k and pay 15% interest on it. when the market corrects say 20%, now their home is at 80k, they are not paying 15% interest on 80k but on 100k assuming that is how much they borrow. That is why it only makes logical sense to sell the home, take the loss and re-enter the market at a lower borrowing cost.

That makes no sense at all. All you're doing is paying the $20k up front instead of amortizing it over the life of the loan, and turning the paper loss into a real loss. There may be some advantage to this depending on your situation but it's hardly a given, and how exactly will having a higher downpayment make any of this better?

[TC2002]

Interesting read...

http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=30ee798d-335c-49f2-ac65-418c845f7aad

[turbotrip]

Originally posted by max_boost
^^^

If you price your home accordingly, it will sell no matter what.

If you have time, I would list it privately.



Originally posted by Mangina


You will probably lose about 80% of the buyers by not having it on the MLS. Most buyers use agents1

oh i thought there was some sort of private sale website where it puts it up on MLS too (maybe welist?? if anyone knows what im talking about pls post it up. Im gonna try posting a house for sale privately and see how that goes.

[Kobe]

Originally posted by SilverRex
http://www.professorshouse.com/your-home/real-estate/buying-a-home-in-calgary.aspx

here is just a quick august review of the market

This might be the worst / stupidest realtor in Calgary...

[whodiman]

Originally posted by Kobe


This might be the worst / stupidest realtor in Calgary...

care to elaborate why?

[broken_legs]

Not saying its Gospel or anything but I quite enjoyed the read on that website.
The professor is my newest way to kill time at work :-)


I cant remember where I read it but you guys may take some comfort in knowing that 2004,2005,and 2006 all had 3 or more months when the average sale price decreased in Calgary. Thats whats happening now too, only now there are another 9000 houses on the market at the same time and everyone is scared ... :eek: