unrealistic sellers Calgary 2009

[TACO.VIDAL]

Yeah, you missed selling your house by 2 or 3 months.

And yeah, creative marketing is going to sell your house when your not willing to drop your price and theres tons of similar homes flooding the market.

And yeah, this isnt 5 or 6 years ago. And it isnt going to be like that for many more years to come.


canada, canadian search engine, free email, canada news
Wednesday » January 7 » 2009

Home sales slide to lowest since '96
Single-family home price down 2.5%

Mario Toneguzzi
Calgary Herald

Wednesday, January 07, 2009

The need to reduce prices has become an unwelcome reality for many people trying sell homes in a buyer's market.
CREDIT: Herald Archive, Reuters
The need to reduce prices has become an unwelcome reality for many people trying sell homes in a buyer's market.

F iona Warren admits she and her husband, Andy, picked a bad time to sell their house, in the slumping Calgary real estate market.

In the past six years, the couple has sold a few single-family homes in a matter of 24 to 48 hours on average.

This time, their 1,900-plus square foot, two-storey home in Regal Terrace has been listed for sale for almost three months and there have been only two viewings to potential buyers. The house was originally listed for $729,000. Now it's $699,000.

"We did anticipate it was going to be slower, but perhaps maybe not as slow as this," said Fiona Warren, adding the couple would like to stay in the same area in either a renovated older bungalow or build a new home. "We had also hoped to slide in. I think we missed it by two or three months."

On Tuesday, the slide was evident as the Calgary Real Estate Board officially released its MLS year-end data for 2008. Total sales are the lowest they have been since 1996. Single-family home sales (13,455) were down 27 per cent from a year ago while the average sale price fell 2.5 per cent to $460,327 and the median price dropped by 2.9 per cent to $409,000.

The condominium market fared worse. Sales plunged by 31.3 per cent to 5,661 compared with 2007 while the average sale price dropped by 4.4 per cent to $302,408 and the median price, at $279,500, was off by 5.3 per cent from 2007.

December was a brutal month for weather in Calgary, but the chill was particularly felt in the residential real estate market.

Sales of single-family homes plunged by 46.9 per cent to 449 compared with December 2007, while condo sales fell by 47.8 per cent to 205.

Also, average and median sale prices continued to drop from year-ago levels. For single-family homes, the December 2008 sale price (at $417,398) was off by 6.2 per cent and the median price of $380,000 was down by 6.6 per cent from a year ago.

Condos had a harder hit as average sale price was down 9.8 per cent to $274,919 and the median price of $254,000 was off by 11.2 per cent compared with December 2007.

The market has dramatically shifted from what it was just a year and a half ago. Average sale prices for both condos and single-family homes have fallen by more than 17 per cent from their peak in 2007.

Average sale prices for singlefamily homes peaked at $505,920 in July 2007 and for condos at $332,237 in May 2007.

It is also taking longer for people selling their homes. For 2008, it took an average 47 days on the market to sell a singlefamily home in Calgary, up from 33 days in 2007.

For condos, it was 50 days in 2008 compared with 32 days last year.

But those numbers continue to climb. In December, it took 61 days on average for a sale in both the condo and single-family home markets.

For sellers such as the Warrens, they may be faced with some tough decisions in the near future.

When asked what it's going to take to sell in this market, she replied: "Some pretty hardcore marketing and maybe some more creative sales approaches.

"The second would be obviously to drop the price, but it gets to a certain point where if you drop the price too much then there's no point in selling.

Real estate in Calgary went beyond the point of affordability and when the average price of a singlefamily home exceeded$ 500,000 in July 2007, it was beyond the ability of the average family to afford it, said real estate author Garth Turner, adding there naturally should have been a correction.

But that correction was delayed for two reasons: the high price for oil and the existence of zero-down, 40-year mortgages.

"You had the greatest commodity bubble in oil ever happen in 2008. That gave the illusion of wealth and the illusion of future wealth in Alberta," he said.

The zero-down, 40-year mort-gages were in full effect until Oct. 15 and many people were able to buy "because of these Canadian subprimes, which is essentially what they were."

Turner said the Calgary market went beyond the point of sustainability and the correction was only inevitable when people were not able to afford homes on their incomes, oil prices collapsed and cheap mortgages were taken off the table.

"To talk about a rebound in the middle of 2009 is a complete myth. We are in the middle of a North American meltdown, which is not going to be rescued in 2009," said Turner.

"Many people took their houses off the market waiting for the spring. One of the big surprises of 2009 will be that there is no spring market. It will be dismal."

He predicted listings are going to explode in Calgary beginning in March, with the greatest number of listings in April and May. He expects local prices will drop a significant 15 per cent but won't hit bottom until 2010.

In early December, Re/Max released its housing market outlook, which forecast MLS sales in 2009 in Calgary to increase by two per cent from 2008 while there would be no change in the average sale price.

An outlook by Canada Mortgage and Housing Corp. forecast MLS sales in the Calgary census metropolitan area to increase by 2.8 per cent in 2009 while the aver-age sale price would increase by less than one per cent to$406,000, which includes both single-family homes and condos.

"The marketplace was oversupplied," said Lai Sing Louie, senior market analyst in Calgary for the CMHC.

The residential real estate market will likely be slow in the first part of this year as consumers are hesitant to make big-ticket purchases, said Todd Hirsch, senior economist with ATB Financial in Calgary, adding the market should pick up in the latter half of the year.

"At a certain point there will be so much pent-up demand that people will pull the trigger."
© The Calgary Herald 2009


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[old&slow]

I read this in today's paper...I don't know where Regal Terrace is...but it must be real posh to ask 700K for a 1900 sq ft house...in this market!!

[CUG]

Sure glad I bought in 03 :S

[mekeni]

Originally posted by CUG
Sure glad I bought in 03 :S

:werd:

[TACO.VIDAL]

Its a side by side.

MLS #: C3353797

You can see the house number in the pic in the paper and the address is shown in the MLS listing.

Heres the location.

http://maps.google.ca/maps?f=q&hl=en&geocode=&q=635+9+AV+NE+calgary&sll=49.891235,-97.15369&sspn=27.382728,79.101563&ie=UTF8&ll=51.062382,-114.049931&spn=0.052,0.154495&z=13


Originally posted by old&slow
I read this in today's paper...I don't know where Regal Terrace is...but it must be real posh to ask 700K for a 1900 sq ft house...in this market!!

[DJ_NAV]

^ Eww... NE.

[ExtraSlow]

Regal terrace, AKA Renfrew. Borders Bridgeland and Crescent Heights, so it's NEAR to some Posh places, but for the most part, it's much more reasonably priced. I really like it, but I'm biased, I live there.

[SikAssR1]

Originally posted by DJ_NAV
^ Eww... NE.

Not all of the NE is bad....Well , maybe everything east of Deerfoot is.:D

[badatusrnames]

Originally posted by DJ_NAV
^ Eww... NE.

It's not EDNG...

[Magia]

I think the problem is the difference between what a seller and buyer see as market value. Sellers right now seem to still be listing for early 2008 values when clearly no one is picking them up. Market value is what buyers are willing to pay for your house... not what you think you should get.

[jus_sum_guy]

There was a house I was looking at in Cranston.
The houses across the street from it overlooked the Ridge, so this house wasn't exactly on the Ridge or have a view.

It was listed at $789,000 on January 2008. It finally sold for $500,000 last month

[98type_r]

Anybody trying to sell an apartment condo right now is having a really hard time.

My uncle told me about a house his friend just bought. It was in Panorama Hills, 2000+ sq. ft. and had been listed for a long time at $470, 000. Finally sold this month for $370k

[cmyden]

The market doesn't lie!

[C4S]

:( we bought ours in 06 ... so .. not too bad .. not too good ..

Worth way more in 07..even 08 ..

But .. may be just worth slightly more then what we paid this yr ..

:banghead: shouldn't do much upgrades..

[Redlyne_mr2]

Been out hunting for a while.. people are still trying to stick to their price, so many condo prices all over the map.

[JordanLotoski]

i took possession of my house March of 08 and its worth 70-100k more then what i paid for it....:thumbsup:

[civic_rida]

Your house is worth what people are willing to pay for it not what you think its worth.

[DJ_NAV]

^You better have made money you realtor!

[cmyden]

i took possession of my house March of 08 and its worth 70-100k more then what i paid for it....

Have you tried selling it?

I'm certainly not calling you a liar, could be that you got a hell of deal, or maybe you discovered a gold mine in your basement.

The reality is though, right now, the majority of people who purchased a condo in '06 would break about even right now, maybe slightly ahead. '07 or '08 ? Not a chance.

SFH is in better shape right now, but for how long....

[civic_rida]

he built his house.

[88CRX]

I purchased in Jan 2007 (just taking possesion now) and I'm still in the plus; just barely in the plus but still in the plus.

However it makes zero difference to me since I need somewhere to live and I'm not planing on moving anytime soon.

[cmyden]

The thing is though, those that think they're 'still in the plus', how do you know unless you've sold ?

Just comparing your property to what you see for sale doesn't mean anything, because those properties aren't selling.

[ExtraSlow]

Yeah, but if you aren't selling, it doesn't matter if you are wrong about being "in the plus."

[cmyden]

Yeah, but if you aren't selling, it doesn't matter if you are wrong about being "in the plus."

All fine and dandy as long as you ...

don't lose your job
never have a reason to want to move

http://img85.imageshack.us/img85/4922/calgaryinflationadjustede7.png

[R-Audi]

Anyone else get their House Tax/Market assesment?
Mine is a bit ridiculous.. .no way the value of my property has gone up 94k this year... To the citites defense the assesment was done in July.. but still!!

[kevie88]

Last year's assesment was $430000

This year's assesment said my LAST YEAR assesment was $460000

Now they say my house is worth $440000

Wierd how the assesment values on the first year changed.. I suppose I should argue the new assesment.

*edit* and there's no way my house is worth that much..

[The Cosworth]

Originally posted by old&slow
I read this in today's paper...I don't know where Regal Terrace is...but it must be real posh to ask 700K for a 1900 sq ft house...in this market!!

it is just up the hill from my place in bridgeland.

it is nice but overvalued for some of the war houses that are there

[a social dsease]

I work with Andy Warren. Nice house, hope it sells for him. It does seem like alot when you could buy a much larger house for less in a new community, but I guess you pay for a good location.

[Zero102]

I got my assessment for my house in Vernon, BC. It has 2 sets of numbers on it, 2007 and 2008 values. Then a note at the bottom saying that due to the recent decline in property values they are using the lower of the 2 (usually gonna be the 2007 value, unless your house burned down in 2008). Nice to see them at least caring a little bit. Too bad Calgary isn't doing the same.

[autosm]

Originally posted by ExtraSlow
Yeah, but if you aren't selling, it doesn't matter if you are wrong about being "in the plus."

If you waited to buy you may have paid 200k less than people that purchased in the peak.

Thats 20k per year after tax $ for ten years.

[Xtrema]

Originally posted by cmyden


All fine and dandy as long as you ...

don't lose your job
never have a reason to want to move

http://img85.imageshack.us/img85/4922/calgaryinflationadjustede7.png

The only difference is, Mama bear and Baby bear has their mortgage rate in the teens. While papa bear is at historically low rate. This should give us a softer blow than the last 2 bust.

There are many people with money, credit that are waiting til a sign of rebound before jumping back into the market.

[yue]

Originally posted by civic_rida
Your house is worth what people are willing to pay for it not what you think its worth.
true...but there is ALWAYS an idiot out there who will pay more than the majority. some people are willing to wait years for that idiot.

[wah]

Originally posted by Xtrema


The only difference is, Mama bear and Baby bear has their mortgage rate in the teens. While papa bear is at historically low rate. This should give us a softer blow than the last 2 bust.

There are many people with money, credit that are waiting til a sign of rebound before jumping back into the market.

I kind of see it the other way around. Low interest rate means there is nothing to stop the fall. Lowering rates is like pressing on the gas and raising them is like putting on the brakes. Except now the whole world has the peddle to the metal and the engine is still choking.

Low rates helped fuel the boom, so people aren't falling for it this time. Interest rate is effectively zero in the US. If things don't get better, now what do you do?

[Xtrema]

Originally posted by wah


I kind of see it the other way around. Low interest rate means there is nothing to stop the fall. Lowering rates is like pressing on the gas and raising them is like putting on the brakes. Except now the whole world has the peddle to the metal and the engine is still choking.

Low rates helped fuel the boom, so people aren't falling for it this time. Interest rate is effectively zero in the US. If things don't get better, now what do you do?

You stall. But hopefully that won't happen. There are a lot of buyers out there but they rather rent til the both job and real estate market stabilizes. Once price comes down to a reasonable level, they will be back. While in the 80s and 90s, your money is better be in the banks than anything else.

[Celica TVS3]

Originally posted by Xtrema


You stall. But hopefully that won't happen. There are a lot of buyers out there but they rather rent til the both job and real estate market stabilizes.

I hear this all the time but I don't belive many people are in this situation. I am the only person I know who has done this. We (my wife and I) bought a house in 2005 and for the sole reason that we thought the market going to correct sharply we sold it in November of 2007 and have rented since.

I don't think there are too many people with sufficent cash downpayments for a $500k+ house who wouldn't have to sell thier current home to afford their new home. I belive the only people that don`t currently own a home who have the flexibility to make offers not subject to the sale of their current home are first time buyers looking at entry-level homes and condos.

If I am wrong and there are others on the board who are in the same position as me I would be interested to hear about it.

[ckangarloo]

Originally posted by Celica TVS3


I hear this all the time but I don't belive many people are in this situation. I am the only person I know who has done this. We (my wife and I) bought a house in 2005 and for the sole reason that we thought the market going to correct sharply we sold it in November of 2007 and have rented since.

I don't think there are too many people with sufficent cash downpayments for a $500k+ house who wouldn't have to sell thier current home to afford their new home. I belive the only people that don`t currently own a home who have the flexibility to make offers not subject to the sale of their current home are first time buyers looking at entry-level homes and condos.

If I am wrong and there are others on the board who are in the same position as me I would be interested to hear about it.

I sold my shoebox downtown condo in June '08 after reading all the real RE news (thanks to this forum and many others, ignored the MSM). My place was on the market for five months and I'm very glad I sold it when I did. Now, my wife and I are renting a place twice as big and twice as nice in Kelowna for much less than my old mortgage payment + tax + utls. Sitting on a down payment and saving pennies right now.
I would share the sentiment in that I don't think there are hoards of renters waiting for the moment to pounce on that $500k McMansion either.

[AZ REALTY]

Originally posted by Xtrema
There are a lot of buyers out there but they rather rent til the both job and real estate market stabilizes. Once price comes down to a reasonable level, they will be back.

I completely agree with you! I told all my family members to sell their properties in 2006/2007 and wait until the market crashed before buying again. So to this day, I have 6 members of my family renting and just waiting out the storm.

[The Cosworth]

Originally posted by Xtrema


You stall. But hopefully that won't happen. There are a lot of buyers out there but they rather rent til the both job and real estate market stabilizes. Once price comes down to a reasonable level, they will be back. While in the 80s and 90s, your money is better be in the banks than anything else.


hey.... that is me :D

[spikerS]

my wife and I are ready to buy a house. basically everything is in order. we are pre-approved for our mortgage, and have a downpayment ready.

housing prices are falling slowly but surely.

if i save 50k on a house, over the course of the mortgage, that is easily saving 220k.

I would rather rent and save the interest charges.

if the right place comes up, and the price is right, we will jump in.

[eblend]

I am in the same boat as well, waiting on the crash, just resigned another 1 year lease at the place i am at, then in about a year try to buy something (unless shit is still falling sharply, might wait a little longer)

[UndrgroundRider]

This applies to primary residences only.

The biggest issue with the whole rent over buying argument is that the two are usually tied together pretty closely. If the housing market looks like it's gonna tank, rent goes sky high. When the market looks good, the opposite is true. I remember paying 750/month for a 2-bedroom 1200 sq. ft. apartment downtown only 3 years ago. Now you can't even get a 700 sq. ft. apartment for less than a grand.

So while you might not be risking your money in the housing market, you're still getting screwed in the rental market. I bought my place a couple weeks ago, and paid 70k below list price and 60k below market value based on MLS previous sales avg $/sq. ft. for the neighborhood. My mortgage+taxes+CMHC is less than my rent payments on a smaller house in a crappier part of town.

After 5 years I'm looking at 30k in equity (plus my initial dp). Versus renting for 5 years, paying more than my monthly mortgage payment, building no equity and saving that 30k on a house purchase. Are you really better off? My guess is, it all washes out to about the same. Maybe one way you're up 10 grand, maybe the other way you're up 10 grand. Over the course of 5 years, 10 grand is nothing.

[Xtrema]

Originally posted by UndrgroundRider
After 5 years I'm looking at 30k in equity (plus my initial dp).

I think this is the best indicator here. If you buy now, you may earn $5K of equity in a year.

If you look at the market right now, if you seriously think that the price won't drop more than $5K on average by the end of the year, you are crazy.

I always encourage people to buy but when the picture is so obvious clear that you will gain so much more renting and waiting.

[UndrgroundRider]

Originally posted by Xtrema
I think this is the best indicator here. If you buy now, you may earn $5K of equity in a year.

If you look at the market right now, if you seriously think that the price won't drop more than $5K on average by the end of the year, you are crazy.

Clearly I'm not saying you will build enough equity alone to offset the falling house prices, that's just ludicrous in this market (or any market for that matter). But if you factor in high rent prices and seller flexibility you might not be saving any money at all. On the lower mortgage payment I'm saving $4800/year, and that's only going to get better as interest rates drop.

If you wait until the market heads back up then you're gonna have to fight it out in a sellers market again. You won't be getting anymore 60k below market deals.

[ws_on99]

Originally posted by UndrgroundRider


Clearly I'm not saying you will build enough equity alone to offset the falling house prices, that's just ludicrous in this market (or any market for that matter). But if you factor in high rent prices and seller flexibility you might not be saving any money at all. On the lower mortgage payment I'm saving $4800/year, and that's only going to get better as interest rates drop.

If you wait until the market heads back up then you're gonna have to fight it out in a sellers market again. You won't be getting anymore 60k below market deals.


True, you won't get anything 60K below market deals cuz by that time the market's already down by another 100-150K.

[ws_on99]

Originally posted by UndrgroundRider


Clearly I'm not saying you will build enough equity alone to offset the falling house prices, that's just ludicrous in this market (or any market for that matter). But if you factor in high rent prices and seller flexibility you might not be saving any money at all. On the lower mortgage payment I'm saving $4800/year, and that's only going to get better as interest rates drop.

If you wait until the market heads back up then you're gonna have to fight it out in a sellers market again. You won't be getting anymore 60k below market deals.

oops, sorry for the double post.

[Heff]

I can't for the life of me get mls.ca to work.

It loads an incomplete page in 2 browsers.

[AZ REALTY]

Try www.realtor.ca

[kaput]

.

[cmyden]

Is it just me or does the mls/realtor.ca website suck balls? Unless you are searching for something extremely specific it just says too many results, please narow it down. Are they doing this on purpose to force you to go to a realtor? I don't want to waste someones time when I'm just getting a feel for what I can afford.

Definitely not just you, there are a lot of people that hate it (http://www.blogto.com/city/2008/07/goodbye_mlsca_hello_realtorca/).

http://www.theoldmls.com if you liked the old one.

and I like using this search page (http://www.andrewkyle.com/mlsca/home_page.php?page=mls_search) if you're a fan of viewing properties by map. Unlike Realtor.ca though, this site uses Google Maps, which I think would have been a smarter move for Realtor.ca

It's also a lot easier to use, and faster, in my opinion. The data also appears to be in real time, and looks to be 100% accurate, from what I've seen from my usage.

[TimG]

is there any way to filter houses by build year also?

[cmyden]

is there any way to filter houses by build year also?

Click on 'advanced search criteria' and there is a filter called Age.

[Heff]

Originally posted by AZ REALTY
Try www.realtor.ca

Thanks. That worked.

No pick of the front facade?

[Celica TVS3]

To those that have cash on the sidelines, are you first time buyers? How much are you looking to spend?

[variable_x]

Some of the prices that sellers are asking are ridiculous by today's standard. I am looking into getting a condo but have yet found one that's fairly priced. Most of them are still asking 20 - 30% over the city's assessment from last summer. I am hoping this summer they will finally come to their senses that we are in a down trending market and they will not sell their place at the 2007 price level.

[kaput]

.

[ee2k]

Originally posted by Celica TVS3
To those that have cash on the sidelines, are you first time buyers? How much are you looking to spend?

Have $ on the sidelines, in terms of down payment, looking at how it all goes. I can comfortably buy up to $250, but the condos I saw at that price mid-last year are now down to about $210. They could also possibly entertain offers for less. So, the plan is to ride it out until spring. The option to renew rental lease is always there.

[Akagi Redsuns]

Originally posted by UndrgroundRider This applies to primary residences only.

The biggest issue with the whole rent over buying argument is that the two are usually tied together pretty closely. If the housing market looks like it's gonna tank, rent goes sky high. When the market looks good, the opposite is true. [/B]

Oh yes, I remember how renting a place got so much cheaper in 2006 when the housing boom got into full swing. Since so many people were buying places, there were just too many places to rent for such cheap rates

Your statement is a bit backwards. You still think those sky-high rents are coming since the housing market is tanking? Home sales are down significantly, not looking too good.



Originally posted by UndrgroundRider So while you might not be risking your money in the housing market, you're still getting screwed in the rental market. I bought my place a couple weeks ago, and paid 70k below list price and 60k below market value based on MLS previous sales avg $/sq. ft. for the neighborhood. My mortgage+taxes+CMHC is less than my rent payments on a smaller house in a crappier part of town. [/B]

Not really a comparsion of payments when there is no details. How much did you put down? Minimum 5%? With a high enough downpayment anyone can make mortgage payments less than rent payments. There is also an opporunuty cost associated with the downpayment. Boasting that a BMW has lower car payments than a Dodge Neon is not really a comparision when the BMW has a $30,000 downpayment when the Neon has none.

Also since you bought at 60K below "market value"........didn't you pretty much reset the market value with the purchase of your place?

[ExtraSlow]

I've had my eye on a place for sale in my neighborhood.
Guy bought it a couple years ago for $475, did some nice renos and put it on the market in March 2008 for $640. it's been on the market ever since, and is now down to asking $450. This dude is getting fukked.

[AZ REALTY]

Originally posted by ExtraSlow
I've had my eye on a place for sale in my neighborhood.
Guy bought it a couple years ago for $475, did some nice renos and put it on the market in March 2008 for $640. it's been on the market ever since, and is now down to asking $450. This dude is getting fukked.

Pretty typical of investors who bought in the boom to "fix and flip"; however, most of those investors are going to find that it's now referred to as "fix and flop".

[Lex350]

I'm happy things are dropping. A divorce has me looking for a new place and there are definitely some deals out there. It is amazing however how some people don't seem to recognize that it isn't a sellers market. I’m looking around in the NW and the price per square foot fluctuates quite a bit for houses that should be around the same price. $200 – 315 per/sq/ft.

The good thing also is that there are many houses out there for immediate possession. That works well for me.

[BigMass]

In 1980 my dad was making 40k year and bough an 80k home. If I make 80k/year I’ll wait until I can buy a home for 160k. That to me is a responsible debt level.

The levels now are so out of whack that we have only begun to feel the full effects of this coming economic collapse.

[Xtrema]

Originally posted by BigMass
In 1980 my dad was making 40k year and bough an 80k home. If I make 80k/year I’ll wait until I can buy a home for 160k. That to me is a responsible debt level.

The levels now are so out of whack that we have only begun to feel the full effects of this coming economic collapse.

That won't happen because a 1980 home has much smaller sq footage and more basic amenities. 2009 home has much more.

I doubt we'll see 160K homes but 160K apartments are definitely possible.

[Redlyne_mr2]

160K homes would be nuts. My colleage at work paid $180K for his 2300sqft home back in 98.

[max_boost]

^
What community is that?

My parents bought their current place in Riverbend, 2200 sq.ft two storey and cost them $268,000 and this was in summer 2001!

I knew I should have sold my place 1.5 years ago and move into one of my rentals! lol

[cmyden]

Historically (for the past 40 years at least), house prices in Calgary have risen at 5.74% a year (1.2% above inflation, which has been 4.5% in that same time period).

Here's where we'd be at if things had progressed at their historical norms:

2001 - 192,365
2002 - 203,406
2003 - 215,082
2004 - 227,428
2005 - 240,482
2006 - 254,286
2007 - 268,882
2008 - 284,315
2009 - 300,635

Will prices fall back down to these historical norms? History says yes, but nobody has a crystal ball, and who knows how long that will take.

After the last boom (or maybe I should say, after the bust) prices stayed below their historical pace for about 20 years.

It took about 2 years from the peak (1982) to hit bottom (84/85ish). It's looking more and more like our peak was July '07.

[badatusrnames]

Originally posted by Redlyne_mr2
160K homes would be nuts. My colleage at work paid $180K for his 2300sqft home back in 98.

My parents paid $90K for their place in an inner-city neighborhood in '89, big corner lot too.

The most recent assessment was $450K and it had fallen $50K since last year.

Quite a few neighbours paid even less for similar homes. I can't imagine what the original home owners (some are still around) paid back in the 50's...

[tedstriker]

Originally posted by BigMass
In 1980 my dad was making 40k year and bough an 80k home. If I make 80k/year I’ll wait until I can buy a home for 160k. That to me is a responsible debt level.

The levels now are so out of whack that we have only begun to feel the full effects of this coming economic collapse.

Alot of families now have duel incomes, and have children much later then the previous generation. people have wealth far beyond what the baby boomers had at this stage. Debt is alot higher, but interest rates are extremely low as well.

[barmanjay]

Originally posted by cmyden
Historically (for the past 40 years at least), house prices in Calgary have risen at 5.74% a year (1.2% above inflation, which has been 4.5% in that same time period).

Here's where we'd be at if things had progressed at their historical norms:

2001 - 192,365
2002 - 203,406
2003 - 215,082
2004 - 227,428
2005 - 240,482
2006 - 254,286
2007 - 268,882
2008 - 284,315
2009 - 300,635

Will prices fall back down to these historical norms? History says yes, but nobody has a crystal ball, and who knows how long that will take.

After the last boom (or maybe I should say, after the bust) prices stayed below their historical pace for about 20 years.

It took about 2 years from the peak (1982) to hit bottom (84/85ish). It's looking more and more like our peak was July '07.

Although that is the perfect scenario, and every buyer I know would love to see those prices,.. however, we aren't that far off now,.. maybe 50k-60k?

I can see prices holding somewhat till 2010-12, by then it'll be on the right inflation line, then maybe following that pattern properly for a few-10 years?

But again,.. I'm just speculating, feels right though.

[AZ REALTY]

Originally posted by Xtrema
I doubt we'll see 160K homes but 160K apartments are definitely possible.

Never say never! Who would have thought that a 3,000 sq ft home in Phoenix selling for over $800,000 a year ago would only be worth $160,000 in today's market.

[sneek]

Originally posted by AZ REALTY


Never say never! Who would have thought that a 3,000 sq ft home in Phoenix selling for over $800,000 a year ago would only be worth $160,000 in today's market.

True! Places in Scottsdale look so tempting. You can get yourself something pretty nice for under 600K CAD. I still don't think you can find anything in Calgary with a pool that backs onto green for 600K.

However, I do think that the 160 is a bit low. My parents bought their house in the 80s and and it was 200K.

[cmyden]

Never say never! Who would have thought that a 3,000 sq ft home in Phoenix selling for over $800,000 a year ago would only be worth $160,000 in today's market.

Speaking of Phoenix....

http://uglyhousephotos.com/wordpress/wp-content/uploads/2009/01/december2008phxmlsabsorption.JPG

Note the absorption rate for Phoenix hit the 12 month mark sometime around August '07.

(Calgary's just hit 11.4 this week and has nearly doubled since October)

http://uglyhousephotos.com/wordpress/wp-content/uploads/2009/01/december2008phxmlsavemedsoldprice.JPG

Now witness the median price free fall from 250k to 140k after August '07 for the next 11 months (44% decline)


If Calgary's median SFH price falls the same way, we'd be looking at 212k (from 380k).

[AZ REALTY]

Originally posted by Redlyne_mr2
160K homes would be nuts. My colleage at work paid $180K for his 2300sqft home back in 98.

Back in late 2005 early 2006 you could still buy a 1,300 sq ft shoe box house in Calgary's suburb communities (Coventry, Copperfield, McKenzie Towne, etc.) for $160,000-$190,000 and those prices seemed right for the market. I don't think we'll see starter homes selling at those prices when the market bottoms, but I think it'll be pretty close ($200,000-$220,000 range).

[AZ REALTY]

Originally posted by cmyden


Speaking of Phoenix....

http://uglyhousephotos.com/wordpress/wp-content/uploads/2009/01/december2008phxmlsabsorption.JPG

Note the absorption rate for Phoenix hit the 12 month mark sometime around August '07.

(Calgary's just hit 11.4 this week and has nearly doubled since October)

Now witness the median price free fall from 250k to 140k after August '07 for the next 11 months (44% decline)


If Calgary's median SFH price falls the same way, we'd be looking at 212k (from 380k).

The problem with that chart is that it's deceiving. That chart displays the total inventory of Phoenix homes on the market and the number of months of inventory in Phoenix. What's more important information is what price ranges the inventory ranges from. Currently in Phoenix, the majority of the inventory is below $200,000; however, there are very few homes in the $300,000-$400,000 price range which has increased demand for homes in that range. To properly illustrate the inventory situation in Phoenix, they need a chart that breaks the inventory numbers down by price range.

[ExtraSlow]

Anyone have a chart like that for Calgary?

[AZ REALTY]

A problem I see rising in Calgary are homeowners overpricing their homes and not making appropriate pricing corrections to get their home "in the market". With a declining market I see many homeowners missing their window of opportunity to maximize their sales price and profit. Also, the large number of active listings on MLS is deceiving as in reality the number is much smaller since many of these homes are not even priced “in the market”. From what I’ve seen, there are more homes overpriced on MLS which simply add to the number of listings, but don't play the game.

[cmyden]

Anyone have a chart like that for Calgary?

[Akagi Redsuns]

Originally posted by ExtraSlow
Anyone have a chart like that for Calgary?


Originally posted by cmyden


Should give out the link as well. He updates it every week.

http://www.andrewkyle.com/mlsca/home_page.php?page=weekly_stats

[ws_on99]

Originally posted by AZ REALTY
A problem I see rising in Calgary are homeowners overpricing their homes and not making appropriate pricing corrections to get their home "in the market". With a declining market I see many homeowners missing their window of opportunity to maximize their sales price and profit. Also, the large number of active listings on MLS is deceiving as in reality the number is much smaller since many of these homes are not even priced “in the market”. From what I’ve seen, there are more homes overpriced on MLS which simply add to the number of listings, but don't play the game.

For ppl that bought during the boom time especially with 0 down etc, here's one of the reason why they don't wanna/cannot lower the price:

you are trying to sell a house that is now worth $500,000. Problem is you have a $600,000 mortgage. You have listed for $650,000. (hey, hope springs eternal.) You get an offer for $525,000. The problem is, you can’t sell at that price because you would have to come up with $75,000 to pay the bank and all you have is $30,000 in RRSP’s. You are dead either way. For the underwater homeowner, limping along with the hope of a sale until the bank takes it back is really your best option.....

[Crymson]

Originally posted by ws_on99


For ppl that bought during the boom time especially with 0 down etc, here's one of the reason why they don't wanna/cannot lower the price:

you are trying to sell a house that is now worth $500,000. Problem is you have a $600,000 mortgage. You have listed for $650,000. (hey, hope springs eternal.) You get an offer for $525,000. The problem is, you can’t sell at that price because you would have to come up with $75,000 to pay the bank and all you have is $30,000 in RRSP’s. You are dead either way. For the underwater homeowner, limping along with the hope of a sale until the bank takes it back is really your best option.....

Then you tack on a layoff in the the family or a cut in hours ---BAM!! Fingers in the .. i mean, Bankruptcy! Or you have to let a dude move into the basement who would have otherwise bought his own place.

I know at least 4-5 people in my demographic in this boat. They wanna go back to uni, or move away from Calgary, etc, but they're stuck with 0 equity condo's bought with 0 down long term mortgages in late 2006 or 2007. One or two want to stick it out, but the idea of just walking away from it and giving the keys to the bank is definately tempting a few of them. The only thing holding them back right now is personal pride, and once it starts to be common place and that inhibition deteriorates -- the flood gates will open.

[supe]

And from what I gather, forclosed homes will really indicate where the market is at.

[ExtraSlow]

Originally posted by Crymson


Then you tack on a layoff in the the family or a cut in hours ---BAM!! Fingers in the .. i mean, Bankruptcy!
I lol'ed

[AZ REALTY]

Originally posted by ws_on99


For ppl that bought during the boom time especially with 0 down etc, here's one of the reason why they don't wanna/cannot lower the price:

you are trying to sell a house that is now worth $500,000. Problem is you have a $600,000 mortgage. You have listed for $650,000. (hey, hope springs eternal.) You get an offer for $525,000. The problem is, you can’t sell at that price because you would have to come up with $75,000 to pay the bank and all you have is $30,000 in RRSP’s. You are dead either way. For the underwater homeowner, limping along with the hope of a sale until the bank takes it back is really your best option.....
Well, there are a few options for people in this situation:

1. Stop making mortgage payments and let the house go into default and lose it through foreclosure. This will result in a hit to your credit report, but not as much as a bankruptcy will.

2. List the house for market value, which is probably below the mortgage balance, and once you find a buyer make the contract contingent on the bank agreeing to accept the contract price. This process is referred to as a short sale. The bank agreeing to accept less than the mortgage balance on a sale instead of going through foreclosure. This is a cheaper route for the bank than foreclosure.

3. List the property at the mortgage balance and hope that someone will buy it with a large enough down payment to bring the mortgaged amount down to appraised value. Very unlikely situation.

4. Suck it up and continue making your payments and hope that in 5 years the market rebounds.

[ExtraSlow]

Originally posted by ws_on99
For ppl that bought during the boom time especially with 0 down etc, here's one of the reason why they don't wanna/cannot lower the price:

you are trying to sell a house that is now worth $500,000. Problem is you have a $600,000 mortgage. You have listed for $650,000. (hey, hope springs eternal.) You get an offer for $525,000. The problem is, you can’t sell at that price because you would have to come up with $75,000 to pay the bank and all you have is $30,000 in RRSP’s. You are dead either way. For the underwater homeowner, limping along with the hope of a sale until the bank takes it back is really your best option.....

So yeah, people that got themselves into a house they couldn't afford are getting fukked. boo hoo. Maybe they'll learn the value of prudence and living within thier means.

[AZ REALTY]

Originally posted by ExtraSlow


So yeah, people that got themselves into a house they couldn't afford are getting fukked. boo hoo. Maybe they'll learn the value of prudence and living within thier means.

Not everybody bought a house they couldn't afford. The majority of homeowners that come to me for help are upside down because they bought in the boom, but they can still afford their payments. The people who bought with 0 zero and 40 year mortgages in the boom were taking a huge risk and are now paying the consequences of their decision.

[ExtraSlow]

I was specifically referencing the zero down comment that I quoted.

[AZ REALTY]

Originally posted by ExtraSlow
I was specifically referencing the zero down comment that I quoted.

Zero down is a ridiculous idea; however, it's still not as bad as "stated income" or "minimum payment" options in the US.

[Power_Of_Rotary]

Originally posted by ws_on99


For ppl that bought during the boom time especially with 0 down etc, here's one of the reason why they don't wanna/cannot lower the price:

you are trying to sell a house that is now worth $500,000. Problem is you have a $600,000 mortgage. You have listed for $650,000. (hey, hope springs eternal.) You get an offer for $525,000. The problem is, you can’t sell at that price because you would have to come up with $75,000 to pay the bank and all you have is $30,000 in RRSP’s. You are dead either way. For the underwater homeowner, limping along with the hope of a sale until the bank takes it back is really your best option.....

this is just merely the icing to some people. My friend was making hella good cash during the boom in 2005-2007, flipping 3/4 houses in 2 months or less. As he made more money he bought more houses, now hes stuck with 6 houses that are higher end... now calculate how much hes goin to be owing the bank if he doesnt get his mortgage covered after selling the properties...

[Xtrema]

Originally posted by AZ REALTY
4. Suck it up and continue making your payments and hope that in 5 years the market rebounds.

That will be less and less likely as more people loses their jobs in the upcoming months and the domino effect continues, ripple thru retail, service and other local businesses.

Last year's real estate market flood is caused by people who wants to cut their lost. This year's flood will be foreclosures.

[max_boost]

^^

:werd:

The people of Calgary haven't seen anything yet. Not fear mongering, just being realistic. Now as bad as it's going to get, nowhere near like our cousins south of us. So is there going to be that big exodus of people leaving Calgary now? Oh shit and all those condos coming on to the market too eh?

Hedge yourselves people!

Mark Carney must be crazy when he says we'll get out of this quickly and will be in growth mode later this year. Well unless if he's comparing quarter 4 to the destruction that we'll be going through in quarter 1-3, then sure! lol :rofl:

[AZ REALTY]

Originally posted by Power_Of_Rotary


this is just merely the icing to some people. My friend was making hella good cash during the boom in 2005-2007, flipping 3/4 houses in 2 months or less. As he made more money he bought more houses, now hes stuck with 6 houses that are higher end... now calculate how much hes goin to be owing the bank if he doesnt get his mortgage covered after selling the properties...

Your story reminds me of a friend in Phoenix who did the exact same thing but ended up with 15 homes when the market crashed each valued at over $500,000. Last I saw on MLS, most of them were in foreclosure or already bank owned.

[blownz]

^ those are the people I don't feel sorry for though. They got greedy and took on more risk than they could handle.

I do feel for the people thought that bought into the 'if you don't buy now you will never be able to afford a house' line and are now struggling when they could have purchased a year later for about 20% less.

[AZ REALTY]

Originally posted by blownz
^ those are the people I don't feel sorry for though. They got greedy and took on more risk than they could handle.

I totally agree as that's the risk you take gambling in the real estate market.


Originally posted by blownz
^ I do feel for the people thought that bought into the 'if you don't buy now you will never be able to afford a house' line and are now struggling when they could have purchased a year later for about 20% less.

If someone was gullable enough to believe that line then it's there own fault. I think the majority of people who believed that line are uneducated and don't understand basic economics.

[PeterGTiR]

Do people think the price of real estate in Calgary is going to stabilize in 2009?

I've heard that it is going to stabilize by three different places/people:

-Gerry Forbes on the radio
-co-worker
-guy who I emailed about the price of his home on WeList

What I find strange is that people out there make this claim and there's no arguments to back up this statement. It's like when you hear "it's a great time to buy" regardless of other factors. The one argument, although unrealistic, is that Obama is going to turn US economy around and from there turn the world economy around.

I can understand lots of reasons why prices are going to go down:

-the number of people being laid off
-for condos, the number of new units being finished in 2009
-for condos, how some buildings have lots of units bought by speculators
-the current low price of oil
-the number of projects that are being scaled back

So, what is the basis behind the reasoning that real estate prices are going to stabilize?

[Jim Rome99]

US consumer consumption, which drive both the Canadian and indeed the world economy, has collapsed. People in the USA simply don't have the disposable income to purchase things like Canadian-made cars, lumber, oil, and beef. This is not going to change anytime soon.

Calgary will see an enormous number of lay-offs, mortgage defaults, and bank loan defaults in 2009. Housing prices are going nowhere but down down down. Anyone who tells you different is simply in denial or intentionally trying to mislead you.

[Dj_Stylz]

So its worth the wait to buy a home? When is the prime time to buy?

[spikerS]

Originally posted by PeterGTiR
Do people think the price of real estate in Calgary is going to stabilize in 2009?

I've heard that it is going to stabilize by three different places/people:

-Gerry Forbes on the radio
-co-worker
-guy who I emailed about the price of his home on WeList

What I find strange is that people out there make this claim and there's no arguments to back up this statement. It's like when you hear "it's a great time to buy" regardless of other factors. The one argument, although unrealistic, is that Obama is going to turn US economy around and from there turn the world economy around.

I can understand lots of reasons why prices are going to go down:

-the number of people being laid off
-for condos, the number of new units being finished in 2009
-for condos, how some buildings have lots of units bought by speculators
-the current low price of oil
-the number of projects that are being scaled back

So, what is the basis behind the reasoning that real estate prices are going to stabilize?

It is a thing called optimism, or glass half full syndrome.

Everyone is trained to look for the silver lining, that nothing can go wrong. Or that what ever side of the fence, in this instance, home owner vs non home owner.

Home owner wants prices to rise or stabalize, and will train himself to think that way no matter what is brought to his attention. (glass half full)

Non home owner, wants to be a home owner, but wants prices to fall so that he can be a home owner. because of his state of mind will do what the homer owner does. (glass half empty)

then there is the 3rd type. (there is water in the glass type) can be either of the 2 above mentioned, but will actually open their eyes to the reality and accept reports and evidence as to what is going on and make an informed decision, instead of wishful thinking.

[Jim Rome99]

Originally posted by Dj_Stylz
So its worth the wait to buy a home? When is the prime time to buy?

Absolutely it is worth the wait to buy. It all depends on your personal situation.

Myself, I'm in construction, which is a very volatile industry. Very tough to predict. You should ensure that you are in a comfortable situation at work and that you are ensured work for a long period of time. Right now, many construction workers are getting laid off which will effect house prices enormously.

[Xtrema]

Originally posted by Dj_Stylz
So its worth the wait to buy a home? When is the prime time to buy?

Not in the 1st half of 2009.

But if your job is stable, it doesn't hurt to shop. Especially if you're buying used. Sometimes you may run into perfect homes that's hard to come by and won't mind taking a bit risk on them.

Stay away from condos tho. Nobody know where is the bottom is for those.

[ExtraSlow]

Interest rates are at historic lows for well qualified buyers.
My mortgage Broker has been showing me fixed rates under four percent for five year terms if certain conditions are met.
Combine that with the drop and now is absolutely a great time to buy. It may not be the actual bottom, but it's close. Even if houses continue to decline in value this year, it'll be in the 5% range, not 25% like last year.

[AZ REALTY]

Originally posted by ExtraSlow
Even if houses continue to decline in value this year, it'll be in the 5% range, not 25% like last year.

How do you know? 2009 economy looks far worse than 2008. Every company I know of has been doing layoffs since Jan 09.