The Bottom

[jadeboy]

Price of housing in Calgary is still falling..

What/When do you think it will hit bottom... what will happen this spring?

My prediction for the bottom (Winter 2010):

SFH

Average 360K
Median 325K

Spring will be absolutely terrible.. Condos will be flooded and have the steepest decline.... SFH will be affected with high inventory... We will be still in recession and layoff will continue...


Some Stats

Jan 2009

Single Family House

Average 413K
Median 374K

Feb 1-14 2009

Single Family House

Average 409K
Median 375K

[max_boost]

Hey man, no real estate links allowed.

BUT, I tend to agree with those numbers. I see another 15-20% decline in SFH in 2009. The decline is occurring everywhere else. I'm baffled when people don't think there's more negative impact to be felt.

Ahhh, there I go being all negative again. :rofl:

[JAYMEZ]

^^ lol so negative all the time :D

[ckangarloo]

I have noticed that February has been markedly busier than January in terms of houses/condos sold but is WAY down compared to February 08. Watch for the shills to come out saying the bottom is here, get houses while they are cheap, sales are picking up!
'09 and '10, prices will continue to decline and then stay low for a while. That is my view at least. No more of this irrational exuberance that resulted in this crazy spike of prices (that is until the people buying houses forget about what happened in 2003-2007).
And don't give me the low interest rate excuse.
Who cares about low interest rates when one is sitting on a depreciating asset?

Max, I share your negativity!

[civic_rida]

I think the price of the home will determine how long and how low it will go.
I think the 800 000 plus homes in calgary are going to be hit hard.
There seems to be no demand for them.

[Redlyne_mr2]

Shouldnt this be in the unrealistic seller thread? :)

[max_boost]

Originally posted by civic_rida
I think the price of the home will determine how long and how low it will go.
I think the 800 000 plus homes in calgary are going to be hit hard.
There seems to be no demand for them.

Yep. Who the hell would want to take on such a big mortgage in these uncertain times?

A few houses down on my street is a brand new Virgina style red brick house. Very nice btw but it was originally listed at 1.6mil and it was reduced to 1.4 and it's not moving. A couple blocks down is a very nice brand new attached 2 story. This one is offered at $750K. Inner-city is the :bigpimp: but you have a very select # of buyers interested in paying that kind of premium.

I still tell the wife, if she would have let me pulled the trigger in selling our place 2 years back we could buy it back right now and be $200K ahead lol I probably would have pissed the difference away in HOU anyway so I guess it works out the same in the end. :rofl:

[Masked Bandit]

Originally posted by ckangarloo
I have noticed that February has been markedly busier than January in terms of houses/condos sold but is WAY down compared to February 08. Watch for the shills to come out saying the bottom is here, get houses while they are cheap, sales are picking up!
'09 and '10, prices will continue to decline and then stay low for a while. That is my view at least. No more of this irrational exuberance that resulted in this crazy spike of prices (that is until the people buying houses forget about what happened in 2003-2007).
And don't give me the low interest rate excuse.
Who cares about low interest rates when one is sitting on a depreciating asset?

Max, I share your negativity!

The only thing I can think of that would send the prices skyward again (to the point of stupidity) is $150 a barrel oil. Then it's back to pure speculation.

[civic_rida]

Oil is having trouble staying above the 30 dollar range.

[extm88]

there are lots of homes selling in less than a week right now. These homes are in the 250-400 range. Everything else is next to impossible as people in the range higher than this are either
A) waiting it out to get a 400k house in the 350 range
or
B) asking 400+ for a home that would sell for 399 but they think that this market doesnt hurt them at all.

[ExtraSlow]

Some food for thought, the absorbtion rate for both single family homes and condos has gotten lower, which means that the homes that are selling, are selling faster.
Calgary Real Estate Market Weekly Update - February 14, 2009 (http://www.andrewkyle.com/mlsca/home_page.php?page=weekly_stats)

Spring is traditionally a faster time in Calgary. Probably something to do with the weather, and school years coming to a close.

Oil is traditionally higher in the summer, and that would be a psychological boost to people in the energy industry.

[KappaSigma]

Originally posted by ExtraSlow
Some food for thought, the absorbtion rate for both single family homes and condos has gotten lower, which means that the homes that are selling, are selling faster.
Calgary Real Estate Market Weekly Update - February 14, 2009 (http://www.andrewkyle.com/mlsca/home_page.php?page=weekly_stats)

Spring is traditionally a faster time in Calgary. Probably something to do with the weather, and school years coming to a close.

Oil is traditionally higher in the summer, and that would be a psychological boost to people in the energy industry.

Still a considerable buyers market. Keep in mind that for especially condos a crap load of new condo will come online in 2009. This will increase inventory and without a matching increase in demand...

OUCH

[civic_rida]

Look at the price of oil today.
34.75

[Xtrema]

Love to see if the trend holds which I highly doubt.

It's just suppressed demand that got a jump by low interest rate similar to 2002/2003.

It's not real growth. The bottom should be at this time next year when the when we feel the worst impact of the lay offs (after EI runs out and lack of growth) and lacks of bonus for most employees due to a bad 2009.

[Jim Rome99]

I am very worried about the entire economy collapsing here in Alberta. Next month OPEC will meet and likely agree to cut production, if that fails to stimulate demand, Calgary is screwed. Oil is struggling to stay about $35/barrel right now, there is nothing stopping it from plunging all the way down to twenty bucks.

Anyone who is buying a house right now in Calgary is a sucker, there's no two ways about it. NOBODY on here can post a reply and tell me why house prices won't be substantially cheaper next year.

[Mckenzie]

Originally posted by Jim Rome99
I am very worried about the entire economy collapsing here in Alberta. Next month OPEC will meet and likely agree to cut production, if that fails to stimulate demand, Calgary is screwed. Oil is struggling to stay about $35/barrel right now, there is nothing stopping it from plunging all the way down to twenty bucks.

Anyone who is buying a house right now in Calgary is a sucker, there's no two ways about it. NOBODY on here can post a reply and tell me why house prices won't be substantially cheaper next year.

We will not have an entire collapse but there will be a lot of pain in the next 12 months. O&G does not account for the majority of the Albera GDP either so there are still industries that can support the economy.

However, as these layoffs and low prices trickle through the market, I don't see a rebound in asset prices anytime soon, real estate or other.

[Redlyne_mr2]

Originally posted by Jim Rome99

Anyone who is buying a house right now in Calgary is a sucker, there's no two ways about it. NOBODY on here can post a reply and tell me why house prices won't be substantially cheaper next year.
Markets will always rise and fall, fall and rise.. we will see this happen again in 20 years. We all have our predictions however it's very ignorant to say that someone who buys today is a sucker. It's never a bad time to buy realestate.. rates are low, lots of deals out there right now as well. Prices may go down more, they may not, rates may go down more, or they may not. One thing is for sure, if you don't see equity in your property today you will see equity in your property tomorrow.

[ckangarloo]

Originally posted by Redlyne_mr2
if you don't see equity in your property today you will see equity in your property tomorrow.

You are being sarcastic right?
http://www.cbc.ca/money/story/2008/02/12/homeequity.html
This was just over a year ago. Its gotten much worse.

If you one waits and saves for a couple of years, then one might be able to see some positive equity.

[AZ REALTY]

Originally posted by Redlyne_mr2
It's never a bad time to buy realestate.. rates are low, lots of deals out there right now as well.

I totally disagree! How is buying at the top of the market a good time to buy? How do you consider homes for sale in today's market a good deal and a wise purchase? Buying at the top of the market or as the market is declining can still sting alot of homeowners. What nobody can predict is how long it will take for the market to bottom and recover to the break-even point for these homeowners. If the market drops another 20% and takes 5 years to rebound to break-even, what happens if a family needs to move, loses their job, etc... in that time period? Real estate is just like the stock market, buy low and sell high.

[civic_rida]

Redlyne_mr2 just bought a place recently which is awesome and congrats to him.

[Jim Rome99]

Originally posted by Mckenzie


O&G does not account for the majority of the Albera GDP either so there are still industries that can support the economy.



What are you smoking buddy? O&G IS Alberta's economy. What other industries do we have? Little to no manafacturing, tourism, research and development. Please enlighten me.

[Redlyne_mr2]

Originally posted by ckangarloo


You are being sarcastic right?
http://www.cbc.ca/money/story/2008/02/12/homeequity.html
This was just over a year ago. Its gotten much worse.

If you one waits and saves for a couple of years, then one might be able to see some positive equity.

That's about the US, find me one about Canada. Alberta is in a very unusual position compared to most places in North America. Our economy has many key economic sectors including forestry, agri-foods, information communication and techonology, and chemical production amongst many other things.

I wouldnt say that today is the top of the market... people who bought 2 years ago bought at the top of the market. At the time the those speculating said buy, buy, buy, you'll never get another chance. They were obviously wrong, none of us know what is going to happen, but I'll say it again with a twist real estate is never a bad investment in Aberta:)

[max_boost]

Oh redylne_mr2, agree to disagree bro!

While we don't know who much you paid for your place, maybe you got a super sweet deal that will keep you in the plus despite another 15-20% decrease in home values this year but we'll keep you updated on the average selling price.

Alberta won't be immune to this next upcoming leg. $25 oil and sub $4 natural gas is going to kill this town.

Bankruptcy filings increased by 50% this past year in Alberta. Something has to give. Home prices are going to get killed. Watch for it. ;)

[turbotrip]

now is not a bad time to buy a house in calgary; a condo on the other hand might not be the best idea

[civic_rida]

Lol didnt you read the above post.

[ws_on99]

I enjoy reading the ’shills’ who see silver linings everywhere:
“Real Estate only goes up in value - they stopped making more land!”
“This time it’s based on sound fundamentals, low interest rates blah blah blah”
“There’s never been a better time to invest”

as the inventory grows:
“Now there’s more choice for buyers”
“It’s returned to a balanced market”

as prices soften:
“RE prices take a breather before continuing to skyrocket later this year’
“There’s no risk of a meltdown here because we have no sub-prime problem”
“buy now before prices start going up again in the fall”

as it deepens (Denial):
“We are predicting a soft landing for the RE market followed by a modest uptick”
“House prices up 100% - WOW!!!*” ……*over the last 100 years. MT, Calgary Herald
“Sales down but prices stable (-15%) using the magic new CREB formula”

As prices fall (Acceptance):
“Inner city prices climb…”
“Affordability increases”
“House prices skyrocket..”MT, Calgary Herald

Market crashes (Panic):
“House prices Plunge…get out get out!!!” - MT, Calgary Herald
“Real Estate MELTDOWN….argh!!!” - MT, Calgary Herald
“How can this happen? - I was planning to buy Brazil” - MT, Calgary Herald

I shall watch with interest as events unfold…..

[bigboom]

i think the most interesting thing about this market is the interest rates. with the rate that govts are printing money eventually inflation has to hit and along with that high interest rates, im very interested to see what happens 2-3 years down the road when people that are buying in the near future have locked in at low interest rates and thus will be able to pay down the principle more and those that keep saying i'm not buying because the house may drop 15% or more in the next year when in reality the interest you pay will be greater than 15% with a higher interest rate . there is going to be a little sweet spot in the timeline in the near future where you can lock in a great rate and get a decent price on housing.

[cmyden]

TSX is at 58% of it's peak
(8380 / 14467)

Natural Gas is at 30% of it's peak
($4.20 / $13.50)

Oil is at 23% of it's peak
($35 / $150)


Depending on what measure you use, Calgary single family homes are at...

81% of their peak (average price: $408k/$506k)
86% of their peak (median price: $375k/$435k)
83% of their peak (avg per sq ft: $273k/$330k)


Nobody can predict the future, but I find it hard to believe that Calgary real estate will get through this period of history maintaining 80+% of their peak value.

During the '82-'85 bust, houses dropped to approximately 56% of their peak.

*If* that were to happen again, that would make the average home worth $280k.

Sound impossible ?

[cmyden]

i think the most interesting thing about this market is the interest rates. with the rate that govts are printing money eventually inflation has to hit and along with that high interest rates, im very interested to see what happens 2-3 years down the road when people that are buying in the near future have locked in at low interest rates and thus will be able to pay down the principle more and those that keep saying i'm not buying because the house may drop 15% or more in the next year when in reality the interest you pay will be greater than 15% with a higher interest rate . there is going to be a little sweet spot in the timeline in the near future where you can lock in a great rate and get a decent price on housing.

Mike Fotiou just wrote an interesting article on this for his blog...

http://calgaryrealestatereview.com/
'Buy Now And Save Money?'
(2nd article from the top)

The bottom line is that it depends on a lot of variables.

Don't forget that as interest rates increase, that puts *added* downward pressure on the house prices in addition to the forces already at work.

[Redlyne_mr2]

Originally posted by bigboom
i think the most interesting thing about this market is the interest rates. with the rate that govts are printing money eventually inflation has to hit and along with that high interest rates, im very interested to see what happens 2-3 years down the road when people that are buying in the near future have locked in at low interest rates and thus will be able to pay down the principle more and those that keep saying i'm not buying because the house may drop 15% or more in the next year when in reality the interest you pay will be greater than 15% with a higher interest rate . there is going to be a little sweet spot in the timeline in the near future where you can lock in a great rate and get a decent price on housing.


:werd:

Max_boost I should clarify I know that were going to continue to see drops, there are sooooo many condos out there many of them with stories behind them (assessments, high condo fees, damage etc), I think we are going to see many condos drop down to acceptable pricings, it's going to make it very desirable for the first time buyer looking to get into a condo. As always location, location, location will dictate how well the real estate stands up to the crunch.

[jmc]

Originally posted by cmyden
TSX is at 58% of it's peak
(8380 / 14467)

Natural Gas is at 30% of it's peak
($4.20 / $13.50)

Oil is at 23% of it's peak
($35 / $150)


Depending on what measure you use, Calgary single family homes are at...

81% of their peak (average price: $408k/$506k)
86% of their peak (median price: $375k/$435k)
83% of their peak (avg per sq ft: $273k/$330k)


Nobody can predict the future, but I find it hard to believe that Calgary real estate will get through this period of history maintaining 80+% of their peak value.

During the '82-'85 bust, houses dropped to approximately 56% of their peak.

*If* that were to happen again, that would make the average home worth $280k.

Sound impossible ?
No worries, current SFH prices are still way above what it was just a few years ago.
I don't think the average will move below 300k (or even 350k) at it's lowest point.
FYI, $300k avg would still make it $$$ above what it was in 2005.

[The_Rural_Juror]

You know why I know that Calgary Real Estate hasn't hit the bottom?

It's because there are still idiots out there claiming that $1,300 watches aren't expensive.

[syscal]

Bankruptcy filings increased by 50% this past year in Alberta. Something has to give. Home prices are going to get killed. Watch for it. ;)

I like how these stats work though. 50% increase from what number? 100 last year and 150 this year?

[BigMass]

Originally posted by The_Rural_Juror
You know why I know that Calgary Real Estate hasn't hit the bottom?

It's because there are still idiots out there claiming that $1,300 watches aren't expensive.

lol :werd:

Calgary is still in a bubble. Everything here is delayed about a year

[cmyden]

No worries, current SFH prices are still way above what it was just a few years ago.


I think that depends on your definition of 'a few years ago'.
Right now we're at approximately June of 2006 prices.

http://century21thepros.com/calgary-market-2006-06.htm



I don't think the average will move below 300k (or even 350k) at it's lowest point.
FYI, $300k avg would still make it $$$ above what it was in 2005.

I agree. I think to get back on 'historical pace' which is 1.2% above inflation (approximately 5.7%/year) it would have to drop to the 280-300k range.

Even at a 300k average though, that's still a 40% drop from the peak. If that were to happen in a relatively short period of time, it could mean sleepless nights for many Calgarians.

[syscal]

Originally posted by syscal


I like how these stats work though. 50% increase from what number? 100 last year and 150 this year?

for the record. I am just finishing off being ass raped in this market so I'm not arguing. I'm merely laughing about the stats that are thrown around.

ie. Most layoffs in US history, worse than 194whatever.

is that based on percentage or sheer numbers? how many more people in the US now than then...? very vague and certainly not the same level of overall poverty yet.

[max_boost]

Originally posted by syscal


I like how these stats work though. 50% increase from what number? 100 last year and 150 this year?





Originally posted by: http://www.cbc.ca/canada/calgary/story/2009/02/09/cgy-alberta-bankruptcies.html?ref=rss


Bankruptcy filings in Alberta doubled in December from the same month a year earlier, according to the latest government statistics.

The number of consumers and businesses in the province who made bankruptcy filings in December was 638, the Office of the Superintendent of Bankruptcy Canada said Monday. That was slightly down from 640 in November, but well ahead of the 321 filings in December 2007.

In Alberta, most of the bankruptcies were by consumers. Only 30 businesses filed for bankruptcy in December.

David Bromwich, a bankruptcy trustee in Calgary, said his business has changed a lot in the past year.

"I think there was some sanity in the market about a year ago. About three of four months ago, things really began to get wild, and the last month they've become even more intense. And so we've had to staff up."

Bromwich said many of his clients lived for instant rewards rather than saved, then waited until they were desperate to seek help.

For all of 2008, Canadians made 90,610 bankruptcy filings, up 13.5 per cent from 2007. Businesses filing for bankruptcy for all of last year actually declined by two per cent from 2007.

The increase in filings came as the economic downturn took hold in Canada toward the end of 2008.



:thumbsup:

[max_boost]

Originally posted by syscal


for the record. I am just finishing off being ass raped in this market so I'm not arguing. I'm merely laughing about the stats that are thrown around.

ie. Most layoffs in US history, worse than 194whatever.

is that based on percentage or sheer numbers? how many more people in the US now than then...? very vague and certainly not the same level of overall poverty yet.

http://www.bloomberg.com/apps/news?pid=20601103&refer=us&sid=aUQhUE4hmNh4

American unemployment rate is at 7.6%.
They lost 600,000 jobs in the month of January.
2.6 million in 2008.
5 million people on EI.

These numbers aren't made up, possibly skewed? Any stat can be manipulated but regardless it doesn't paint a pretty picture.

[syscal]

not saying their "made up" but they are made to sound as bad as possible. If they could pull a figure and make it sound worse than a percentage they will do that and the reverse.

It's whatever type of number sounds as bad as possible.

I don't read the news too much so possibly it's because I'm listening to CNN on satelite radio.

[BigMass]

Originally posted by syscal
not saying their "made up" but they are made to sound as bad as possible. If they could pull a figure and make it sound worse than a percentage they will do that and the reverse.

It's whatever type of number sounds as bad as possible.

I don't read the news too much so possibly it's because I'm listening to CNN on satelite radio.

I see it the exact opposite. The media tries to paint a much brighter picture than there really is.

- recovery second half of 09
- real-estate stabilizing and resuming moderate growth
- stimulous bill will start trickling into the economy and start turning it around
- new government programs that will curb unemployment
- mild recession that should only last 1 or 2 years

This is the info I’m seeing in the media. If that’s what people think is “bad new”, they’re in for a real rude awakening when reality hits.

Not to mention government numbers are always manipulated to look better than they really are. That goes for inflation and unemployment

[Mckenzie]

Originally posted by Jim Rome99


What are you smoking buddy? O&G IS Alberta's economy. What other industries do we have? Little to no manafacturing, tourism, research and development. Please enlighten me.

:rofl:

http://www.cbc.ca/edmonton/features/howsbusiness/snapshot.html

[BigMass]

Originally posted by Mckenzie


:rofl:

http://www.cbc.ca/edmonton/features/howsbusiness/snapshot.html

The difference is you can pretty much eliminate that entire pie chart if the "Energy" sector goes missing from it. Service sector jobs are a byproduct of our O&G industry. Almost everything on that pie chart is an offspring of the economy created by O&G. So yes, in essence O&G is our entire economy.

[max_boost]

Originally posted by BigMass


The difference is you can pretty much eliminate that entire pie chart if the "Energy" sector goes missing from it. Service sector jobs are a byproduct of our O&G industry. Almost everything on that pie chart is an offspring of the economy created by O&G. So yes, in essence O&G is our entire economy.

Just like the Americans are 25% of the global economy. A little credit crisis and look where we are now. :rofl:

[Mckenzie]

Originally posted by BigMass


The difference is you can pretty much eliminate that entire pie chart if the "Energy" sector goes missing from it. Service sector jobs are a byproduct of our O&G industry. Almost everything on that pie chart is an offspring of the economy created by O&G. So yes, in essence O&G is our entire economy.

There is truth to this yes, but the extent is nearly impossible to isolate. Its not like if O&G was removed from the pie from Day 1 that there would be no population or economy here...the pie would just be smaller and be made of different pieces. The economy here is much more diverse than people realize.

(BTW I'm playing devil's advocate here- yes many are connected to O&G industry's success, but many people have ZERO connection to oil and gas and still eat steak).

I am well aware that there is going to be SERIOUS pain in Alberta, especially in Real Estate...that I have been calling for a while. It will take a little while for this whole mess to work its way through our little bubble, but you can see the impending problem by driving through inner-city neighbour hoods that have all these infills for sale. On my street in the NW in a four block radius there are at least 10 houses for sale...much the same everywhere else.

[max_boost]

^

Very accurate about the infills. No one is going to pay that kind of money right now. But at the same time, this slow down is just what I need so I can upgrade to a bigger house. It wasn't long after I moved in that I realized that there just wasn't enough space for my toys. I didn't even want to contemplate that idea during the last couple years. $750K for a 1700sq.ft infill? lmao Right now those are going for around $550 to $600K but if these inner city 2500sq.ft homes on over sized corner lots which were priced around 1.5-2million can drop to the $990K range (wishful thinking haha), I am upgrading. Not concerned about picking the bottom as I plan to live there until I die.

[Mckenzie]

^Yah the prices they are charging for these houses are absurd. I have not seen them dropping that low but I have spoken with a couple builders who are renting them out to cover carrying costs or offering trippy mortgage terms. One builder offered me the infill at cost, like 650k, and then said that for the first 12 months, they would give me back $1000 of my mortgage payment and add it to the back end of the mortgage. That was early summer before the world ended in Q4...there is much more desperation now and its quite astonishing to see how many infills are up for sale.

[autosm]

Originally posted by AZ REALTY


I totally disagree! How is buying at the top of the market a good time to buy? How do you consider homes for sale in today's market a good deal and a wise purchase? Buying at the top of the market or as the market is declining can still sting alot of homeowners. What nobody can predict is how long it will take for the market to bottom and recover to the break-even point for these homeowners. If the market drops another 20% and takes 5 years to rebound to break-even, what happens if a family needs to move, loses their job, etc... in that time period? Real estate is just like the stock market, buy low and sell high.


If it even gets 1/2 as bad here as in Arizona we are going to see some major price drops.

Some parts in Florida are 25% lower than pre boom pricing and dropping.

Anyone buying now or in the last 2 years is going to have paid at least 40% more than the property is really worth.

With oil at 35$ today why can't it happen here?

[AZ REALTY]

Originally posted by autosm



If it even gets 1/2 as bad here as in Arizona we are going to see some major price drops.

Some parts in Florida are 25% lower than pre boom pricing and dropping.

Anyone buying now or in the last 2 years is going to have paid at least 40% more than the property is really worth.

With oil at 35$ today why can't it happen here?

Well I don't think Calgary will get as bad as it is here in Phoenix. Obama just announced today that Phoenix has seen a 43% decline in property values since the peak. It's really bad here in Phoenix as prices are still declining at an alarming rate, foreclosure rates are increasing, tons of bank owned properties, etc... You can find some great deals here in Phoenix if you're not afraid of doing a little bit of work to fix-up your foreclosure, but we haven't hit bottom yet.

[lasthuzzah]

Are you trying to say that the housing prices are worse than the TSX? Or Natural Gas? Because you would be horribly mistaken.

'80% of peak value' means nothing. It means the prices have dropped 20% from their all time peak highes. Ie, NOT very much compared to the TSX. Your lead up comparisons are misleading.


Originally posted by cmyden
TSX is at 58% of it's peak
(8380 / 14467)

Natural Gas is at 30% of it's peak
($4.20 / $13.50)

Oil is at 23% of it's peak
($35 / $150)


Depending on what measure you use, Calgary single family homes are at...

81% of their peak (average price: $408k/$506k)
86% of their peak (median price: $375k/$435k)
83% of their peak (avg per sq ft: $273k/$330k)


Nobody can predict the future, but I find it hard to believe that Calgary real estate will get through this period of history maintaining 80+% of their peak value.

During the '82-'85 bust, houses dropped to approximately 56% of their peak.

*If* that were to happen again, that would make the average home worth $280k.

Sound impossible ?

[autosm]

Originally posted by AZ REALTY


Well I don't think Calgary will get as bad as it is here in Phoenix. Obama just announced today that Phoenix has seen a 43% decline in property values since the peak. It's really bad here in Phoenix as prices are still declining at an alarming rate, foreclosure rates are increasing, tons of bank owned properties, etc... You can find some great deals here in Phoenix if you're not afraid of doing a little bit of work to fix-up your foreclosure, but we haven't hit bottom yet.


I Have seen the deals in AZ thats what makes me think it could happen here. 6 million + people in Phoenix area makes for a economy on its own.

What will happen if prices in Calgary hit 2000 levels. Not everyone perchased in 04-07 but lots of people bought rentals ,condos and 2nd homes in that time. Not to mention HELOCs and other debt.


http://www.canadian-housing-price-charts.235.ca/canadian_housing_price_chart.htm

[AZ REALTY]

Originally posted by autosm



I Have seen the deals in AZ thats what makes me think it could happen here. 6 million + people in Phoenix area makes for a economy on its own.

What will happen if prices in Calgary hit 2000 levels. Not everyone perchased in 04-07 but lots of people bought rentals ,condos and 2nd homes in that time. Not to mention HELOCs and other debt.


http://www.canadian-housing-price-charts.235.ca/canadian_housing_price_chart.htm

Phoenix doesn't have the economy that Calgary does and businesses are closing up on every street corner. Phoenix over-built in the boom and now there are very few builders still in business. Not everyone purchased during the boom here either, but what they did do is re-finance and pulled all the equity out and spent it. Now these people are upside down and looking to short sell, foreclose, or deed their property back to the bank.

[lasthuzzah]

Originally posted by AZ REALTY


Phoenix doesn't have the economy that Calgary does and businesses are closing up on every street corner. Phoenix over-built in the boom and now there are very few builders still in business. Not everyone purchased during the boom here either, but what they did do is re-finance and pulled all the equity out and spent it. Now these people are upside down and looking to short sell, foreclose, or deed their property back to the bank.

That's mee!! I sold my house + rental when things went crazy, then I bought a better house for muuch less and pocketed the change.

[autosm]

Originally posted by AZ REALTY


Phoenix doesn't have the economy that Calgary does and businesses are closing up on every street corner. Phoenix over-built in the boom and now there are very few builders still in business. Not everyone purchased during the boom here either, but what they did do is re-finance and pulled all the equity out and spent it. Now these people are upside down and looking to short sell, foreclose, or deed their property back to the bank.

Allot of the same in Alberta,financed and refinanced to the max.
A little correction in prices and pretty soon many are upside down.

I have a theory that a lot of wealth in Alberta ,Calgary in particular is paper money. Inflated realestate values, stock options and worth that is evaporating as we speak?

If oil and gas don't come back we are headed for the same,it just won't be as bad.

[rc2002]

Originally posted by jadeboy
Price of housing in Calgary is still falling..

What/When do you think it will hit bottom... what will happen this spring?

My prediction for the bottom (Winter 2010):


Another prediction thread? How many of these damn threads do you need to start?

[Toma]

I dunno... all I know is this is the first time in history, that a Calgarian can sell his house, and buy 3-4 houses in decent places in the US.

So, we haven't hit bottom.

The US has not hit bottom... and we lag.

We will be in equilibrium once our prices fall some more, and the US prices recover.

LOL

[89coupe]

Originally posted by Toma
I dunno... all I know is this is the first time in history, that a Calgarian can sell his house, and buy 3-4 houses in decent places in the US.

So, we haven't hit bottom.

The US has not hit bottom... and we lag.

We will be in equilibrium once our prices fall some more, and the US prices recover.

LOL

Yep, I have a feeling things are gonna get a lot worse before they get better.

[Jim Rome99]

I love the guy who told me that I'm ignorant for saying that anyone buying a house at the current inflated prices is a sucker, but then he goes on to say that "real estate is never a bad investment".



SUCKER!!!

Do you really believe that real estate is never a bad investment? Tell that to all the people in California whose houses are now worth less than the outstanding mortgages they are carrying.

[ws_on99]

Originally posted by Jim Rome99
I love the guy who told me that I'm ignorant for saying that anyone buying a house at the current inflated prices is a sucker, but then he goes on to say that "real estate is never a bad investment".



SUCKER!!!

Do you really believe that real estate is never a bad investment? Tell that to all the people in California whose houses are now worth less than the outstanding mortgages they are carrying.

That's becuz he just bought a house
for-those-who-are-or-have-just-recently-bought-your-offers-please/ (http://forums.beyond.ca/st/248225/for-those-who-are-or-have-just-recently-bought-your-offers-please/)

So now he's trying to convince himself and all of us here that he's making a good decision. If you wanna buy now, make sure u can still sleep well if your property drops another 30-35%.

[cmyden]

Are you trying to say that the housing prices are worse than the TSX? Or Natural Gas? Because you would be horribly mistaken.

Uhm, no, I'm saying the exact opposite.


Nobody can predict the future, but I find it hard to believe that Calgary real estate will get through this period of history maintaining 80+% of their peak value.

[max_boost]

Originally posted by Jim Rome99
I love the guy who told me that I'm ignorant for saying that anyone buying a house at the current inflated prices is a sucker, but then he goes on to say that "real estate is never a bad investment".



SUCKER!!!

Do you really believe that real estate is never a bad investment? Tell that to all the people in California whose houses are now worth less than the outstanding mortgages they are carrying.

Real estate is never a bad investment in Alberta

March natural gas is at $4.03 right now :eek:
I'm expecting oil to tank when the EIA releases their weekly inventory report at 9am.

Time will tell.

[ws_on99]

Originally posted by max_boost


Real estate is never a bad investment in Alberta
....
Time will tell.

Really?

Suppose you bought in 2k..and sold last yr and making a profit of 80%, which only yields a 10% ROI even if u "buy low, sell high". I'm sure lots of the ppl can do better than that in the stock market or currency trading, even with the situation like today..Even if u make 96% profile, which only yields 12%..The only ppl that r making decent $ is bought in 2k5 and sell in 2k7 (and rent) where they can probably get a 25-30% ROI, but again how many of those ppl out there that can catch it? So ya, if u can catch the trend, then it's not a bad investment, but the same applies to the stock market as well etc..

[max_boost]

lol

Don't need to tell me that. I'm well aware. I was juts correcting JimRome99's post to make sure he's quoting redlyne_mr2 right. :nut:

[ws_on99]

Originally posted by max_boost
lol

Don't need to tell me that. I'm well aware. I was juts correcting JimRome99's post to make sure he's quoting redlyne_mr2 right. :nut:

who knows, maybe u just bought a place like someone did and changing your tone now.....hahaha :rolleyes:

[cmyden]

March natural gas is at $4.03 right now
I'm expecting oil to tank when the EIA releases their weekly inventory report at 9am.

Looks like inventories actually decreased, rather than the expected increase.


Oil prices rose after a government report showed an unexpected drop in crude inventories [ID:nEIA000013], lifting energy stocks such as Exxon Mobil (XOM.N) and Chevron (CVX.N) and helped cushion U.S. markets from weak economic data on Thursday.

[max_boost]

Originally posted by ws_on99


who knows, maybe u just bought a place like someone did and changing your tone now.....hahaha :rolleyes:

7 houses pre boom is more than enough plus I've been plastering my fear mongering over this entire section for the past while :rofl:



Originally posted by cmyden


Looks like inventories actually decreased, rather than the expected increase.



Yep. Very surprised by that but it's just a bump in the road. Oil is headed towards $30 this month.

[Redlyne_mr2]

Originally posted by ws_on99


That's becuz he just bought a house
for-those-who-are-or-have-just-recently-bought-your-offers-please/ (http://forums.beyond.ca/st/248225/for-those-who-are-or-have-just-recently-bought-your-offers-please/)

So now he's trying to convince himself and all of us here that he's making a good decision. If you wanna buy now, make sure u can still sleep well if your property drops another 30-35%.

What's it to you? I convinced myself a while back when I made my offer and bought my place, people forget that we are sitting on the second largest oil reserve in the world, oil will go up again and thus will everything else. I'm not worried about continued decreasing values as it will all go up again one day, what I find interesting is all these Beyond experts and their predictions (wether it's positive or negative) with 5-10 years experience in the market who think they know it all. (your immune MB haha):D

[ws_on99]

Originally posted by Redlyne_mr2


What's it to you? I convinced myself a while back when I made my offer and bought my place, people forget that we are sitting on the second largest oil reserve in the world, oil will go up again and thus will everything else. I'm not worried about continued decreasing values as it will all go up again one day, what I find interesting is all these Beyond experts and their predictions (wether it's positive or negative) with 5-10 years experience in the market who think they know it all. (your immune MB haha):D

yes I agree that it'll go back up.....but not before it go down for a while...If u say buying cuz u want the security of having your own house then that's fine. But from your previous posts, sounds like it's gonna be your investment and that's a totally diff story.

you r not worried about decreaing values, but wut if u lose your job? will u be able or (or simply willing) to make your mortgage payment while the value drops another 30%? but again, maybe u bought the place all in cash or have rich parents. :thumbsup:

o..btw..thx to internet making us all experts..lol...but if u look back, those so call "financial experts", how many of them can accurately predicted the boom and bust?

[cmyden]

Mike Fotiou just posted an article regarding the CMHC Alberta forecast and how often these 'forecasts' are right (which is never)

http://calgaryrealestatereview.com/

[JAYMEZ]

I cant believe I see people saying not buy houses.. Im in the market now for a house. And I will buy one... reason: to start a fucking family , its not like everyone who buys houses buys to flip them , I will probably keep it for 5-10 years. Boom or not , me and my family are not doing to bad and I have nothing to do with O&G. Why do people get some crazy , shit goes up and down all the time , just be smart with how you spend.

[ws_on99]

Originally posted by JAYMEZ
I cant believe I see people saying not buy houses.. Im in the market now for a house. And I will buy one... reason: to start a fucking family , its not like everyone who buys houses buys to flip them , I will probably keep it for 5-10 years. Boom or not , me and my family are not doing to bad and I have nothing to do with O&G. Why do people get some crazy , shit goes up and down all the time , just be smart with how you spend.

Eventually all of us will buy, even for all the bears...bottom line is ppl have to be responsible, I don't wanna see government spending our $$ one day to bail ppl out of their own bad decision, just like wut the US's doing now..

[Redlyne_mr2]

Originally posted by ws_on99


yes I agree that it'll go back up.....but not before it go down for a while...If u say buying cuz u want the security of having your own house then that's fine. But from your previous posts, sounds like it's gonna be your investment and that's a totally diff story.

you r not worried about decreaing values, but wut if u lose your job? will u be able or (or simply willing) to make your mortgage payment while the value drops another 30%? but again, maybe u bought the place all in cash or have rich parents. :thumbsup:

o..btw..thx to internet making us all experts..lol...but if u look back, those so call "financial experts", how many of them can accurately predicted the boom and bust?

I didn't buy my place in hopes of flipping it in a year, like any previous real estate purchases you buy them to have a roof over your head. The more you pay into the more equity you build which is an added bonus. Prices will fall, prices will rise that's the way things go. The people freaking out now are the ones who over extended themselves during the boom. They were used to the 16K paycheques so they took on 7K/month mortgage payments and bought like crazy. Many of the jobs created during the boom were artificial and unecessary and were based entirely on the economy at that time. Unfortunately those are the people who will fall.

You can't go through live scared about everything, I could break my back tomorrow skiing and not be able to work anymore but does that stop me from skiing? I could sit around in some $600/month basement suite easting Mr. Noodle and saving every penny possible but is that really living? It's a loser attitude to be scared of everything and look for problems rather than solutions. Without getting into to much of my personal financial situation the place I bought was 1/2 of the value of what I could have bought, my mortgage payment is small enough to handle even when times are slow. The "experts" that I source my info from saw this coming over a year ago when people were pissing away money like crazy they told me to keep some cash aside which is what I did.

As for the situation in the US, that is an entirely different country with an entirely different economy. The US has and always has been reliant on the rest of the world for ressources, if you ever have a chance go down to Southern California and take a look at the $550 000 600sqft condos, check out all the brand new leased vehicles in the mall parking lots and the immense about of CC debt that each American carries... California and the US as a whole was in trouble 6 years ago, it's just finally catching up to them now. Canada is a drop in the bucket compared to the US.

[bmeier]

whatever happened to buying a home so you have a place to live??

[cmyden]

As for the situation in the US, that is an entirely different country with an entirely different economy. The US has and always has been reliant on the rest of the world for ressources, if you ever have a chance go down to Southern California and take a look at the $550 000 600sqft condos, check out all the brand new leased vehicles in the mall parking lots and the immense about of CC debt that each American carries... California and the US as a whole was in trouble 6 years ago, it's just finally catching up to them now. Canada is a drop in the bucket compared to the US.

They are also our biggest trading partner, so when they catch a cold, we always end up with pneumonia.

Maybe this time our economy is truly isolated from theirs.

Maybe...

[ws_on99]

Originally posted by Redlyne_mr2

You can't go through live scared about everything, I could break my back tomorrow skiing and not be able to work anymore but does that stop me from skiing? I could sit around in some $600/month basement suite easting Mr. Noodle and saving every penny possible but is that really living? It's a loser attitude to be scared of everything and look for problems rather than solutions.

Exactly, that's what insurance and a Plan B is for. What I said is you have to be prepared for the worst and that's my solution to the problem. And did u read carefully wut I said "If u say buying cuz u want the security of having your own house then that's fine."


Originally posted by Redlyne_mr2

Without getting into to much of my personal financial situation the place I bought was 1/2 of the value of what I could have bought, my mortgage payment is small enough to handle even when times are slow.


great to hear that u took a small mortgage, however that small payment will look LARGE especially when u r unemployed during slow times. .. Not sure if u owned a house b4, but it could add up quite a bit with the utilites, internet, land tax, etc...Also, interest rates might go up too... again u have to have a plan B (such as moving back to parent's basement and rent out the house) for that. It's bad to just "assume" the payments r low and you can afford. It's up to u whether u want to be proactive.

Now altho u said u just wanna buy a roof over ur head, I have an impression that u r expecting a PROFIT from your INVESTMENT in a mid-long term say 5 yrs. History told us that home value will ALWAYS go back to be proportional to avg household income for a factor of 2.5 to 3. So I'd say the true value of any avg SFH falls to ~300K range, and if u find anything below that, u r "buying low". So spending more than 300K to buy is considered to be "Buy High" and that doesn't make a sound investment to me.

As for the OilSand development, we have a big big disadv. the Cost/barrel is extremely high in the OS. It's $1 US in the Middle East, while in Can it's 36 for Suncor. Who cares we have 150 yrs of reserve? Big oil will just focus on other cheaper places in the world and come to us the last or when it's feasible. So ya, middle east still have more than 30 yrs of supply.

So, if u need a roof, it's nothing wrong to buy something u can afford now. If u bought already, congats and enjoy it.. But if u r looking as an investment, then it's simply not a good time..even for long term say 5-10 yrs....

[lasthuzzah]

Originally posted by bmeier
whatever happened to buying a home so you have a place to live??

Only us old guys think like that :) But I 'flipped' mine after 10 years because people lost their minds and because I wanted a bigger house, and I got some free cash/car out of the deal.

[max_boost]

Sorry redlyne_mr2, your post got lost in translation :D

Personally I would wait a bit longer before committing but that's because I am uncertain about the economy, society, everything lol

However, if you can afford it, plan to stay for a long time, the downside risk isn't as great as it was back in 07/08.

[extm88]

As redlyne mentioned and many others...
If you are purchasing for a roof over your head, the opportunity to own and are in a position to afford payments for 3-5 years then you will see a return.
I would just about (not quite) put $1000 bet in with any one on beyond that the majority of individuals purchasing right now will have a return in 3-5 years.
Ill agree that there will continue to be slow times and prices will still drop however not bye much.
If you are renting right now, why not make your rent payment a mtg payment.
It does not make sence to continue to rent for 6 months, wait for the market to drop another 3% and then purchase.

[Jim Rome99]

"If you are renting right now, why not make your rent payment a mtg payment."

I'll tell you why not! If I rent, I don't have to worry about losing my shirt in the real estate market if oil continues to slide. If I buy, I have everything to lose.

What happens if I buy a condo for 220k right now? Sure, my mortgage and condo fees will be about twice what I'm currently paying in rent, but I can afford that. What happens if and when the condo is only worth 150k two years from now? I'll have lost seventy thousand in equity! What happens if the value of the condo drops to less than what I owe on the mortgage? I would be a fool to keep paying the mortgage.

People that think like you are the reason we're in this mess to being with. What is wrong with renting? Nothing!

[Redlyne_mr2]

Originally posted by ws_on99


great to hear that u took a small mortgage, however that small payment will look LARGE especially when u r unemployed during slow times. .. Not sure if u owned a house b4, but it could add up quite a bit with the utilites, internet, land tax, etc...Also, interest rates might go up too... again u have to have a plan B (such as moving back to parent's basement and rent out the house) for that. It's bad to just "assume" the payments r low and you can afford. It's up to u whether u want to be proactive.


That's why you save money and don't live paycheque to paycheque... I didn't realise I was going to be unemployed.. I'm glad I saved. :)


Renting sucks... I've owned in the past and rented in the past.. all the money you put into rent is lost. Regardless of how much the market drops the money that you put into your home will pay down your mortage and eventually you will find yourself in an equity position, it may take longer than anticipated but it will eventually happen. Having a mortgage also benefits your credit, lenders offer more credit and prefered rates to owners rather than renters.

[autosm]

Originally posted by extm88
As redlyne mentioned and many others...
If you are purchasing for a roof over your head, the opportunity to own and are in a position to afford payments for 3-5 years then you will see a return.
I would just about (not quite) put $1000 bet in with any one on beyond that the majority of individuals purchasing right now will have a return in 3-5 years.
Ill agree that there will continue to be slow times and prices will still drop however not bye much.
If you are renting right now, why not make your rent payment a mtg payment.
It does not make sence to continue to rent for 6 months, wait for the market to drop another 3% and then purchase.


Why not wait a year and save your self 100k? Thats 8300$ per month.

At least wait until the end of summer.

[barmanjay]

Originally posted by Redlyne_mr2
... all the money you put into rent is lost. Regardless of how much the market drops the money that you put into your home will pay down your mortage and eventually you will find yourself in an equity position, it may take longer than anticipated but it will eventually happen. Having a mortgage also benefits your credit, lenders offer more credit and prefered rates to owners rather than renters.


well said

if you've rented for the last 5 years at $1000/month

that's $60,000 that could've been put towards a home

Some people/families pay $1500/month and have been for the last 5 years

that's $90,000.00 gone to nothing

since it has gone to nothing, the banks don't see that as equity and therefore why would they lend you money if you've spent $60-90,000.00 on nothing.

Had you have put that into a home,.. at least 40-60% of that can be looked at as qualifiable for lending

[extm88]

Originally posted by autosm



Why not wait a year and save your self 100k? Thats 8300$ per month.

At least wait until the end of summer.




I seriously hope you are talking about higher priced homes with such a statement.
If you honestly think that the average priced sfh/condo is going to drop 100k within a year then i may have just met the most pessimistic person online.
To each his own though,
:bigpimp:

[BigMass]

Originally posted by barmanjay



well said

if you've rented for the last 5 years at $1000/month

that's $60,000 that could've been put towards a home

Some people/families pay $1500/month and have been for the last 5 years

that's $90,000.00 gone to nothing

since it has gone to nothing, the banks don't see that as equity and therefore why would they lend you money if you've spent $60-90,000.00 on nothing.

Had you have put that into a home,.. at least 40-60% of that can be looked at as qualifiable for lending

rough math

lets say a $1500/month rent will rent you a $350,000 home

a $350,000 mortgage over 30 years at %5 will cost you about $1900/ month

1900 - mortgage
150 - property tax
150 - maintenance
-----------------
$2200/ month for the home

In 5 years you will have spent $132000 to "own" that home
after 5 years you will have paid off about $40k from the principal of the mortgage
that's about $92000 in the toilet

vs 90k for the 5 years of rent

that's assuming the house price will remain constant. If the house price drops then it's much worse.

And if you were to want to sell the house don't forget the realtor commission and lawyer fees that will probably add up to $15k easy

[The_Rural_Juror]

That's assuming that a renter will rent a place that expensive too.

A savings motivated renter would more likely rent a small 700 sqft apartment, or room with someone, than a 1400 sqft house.

[BigMass]

Originally posted by The_Rural_Juror
That's assuming that a renter will rent a place that expensive too.

A savings motivated renter would more likely rent a small 700 sqft apartment, or room with someone, than a 1400 sqft house.

my case is like you described so my savings is ever greater in the short term

[ws_on99]

Originally posted by Jim Rome99
"If you are renting right now, why not make your rent payment a mtg payment."

I'll tell you why not! If I rent, I don't have to worry about losing my shirt in the real estate market if oil continues to slide. If I buy, I have everything to lose.

What happens if I buy a condo for 220k right now? Sure, my mortgage and condo fees will be about twice what I'm currently paying in rent, but I can afford that. What happens if and when the condo is only worth 150k two years from now? I'll have lost seventy thousand in equity! What happens if the value of the condo drops to less than what I owe on the mortgage? I would be a fool to keep paying the mortgage.

People that think like you are the reason we're in this mess to being with. What is wrong with renting? Nothing!

yup....that's the thinking that leads ppl to take 0/40...and that's coming out from some of our "professional" realtors too, so who can they blame?



Originally posted by extm88

If you are renting right now, why not make your rent payment a mtg payment.
It does not make sence to continue to rent for 6 months, wait for the market to drop another 3% and then purchase.


u should know some ppl might just be better off renting, cuz they might not have any savings or they don't have a secure job. I understand u have to make a living too but by screwing other ppl's future?

Also, what makes u think it'll only drop 3% in 6 months? Are you based on any facts or stats? Even CMHC predicts a 9% decrease this yr so that's probably gonna be double that number...

[extm88]

ooo ws99 you caught me, im trying to screw all of calgary and the future.

Actually, if you could take a few moments before posting and think about what i said you may save yourself the humiliation.

OBVIOUSLY, i repeat OBVIOUSLY if someone is living pay check to pay check and has no savings i am not saying to go buy a place however i know of (keeping my career out of this) people that are purchasing right now and happily doing so.
Why you might still wonder?
Maybe because they have a savings, they have a steady job and they want to purchase because they can afford to.

And as to the comment of doing the math and breaking down the numbers, im not sure why you say the interest is being flushed down the toilet.
If you buy today or in 10 years you are still going to be paying interest.
This is of course unless you are promoting renting for life, then yea you are right...there is no interest.

[Redlyne_mr2]

lol oh man that's the first time I've ever heard someone accuse a realtor or ruining someones life. It's up to the banks to determine someones credit worthiness and stability.. not the realtors.

Interest payments and declining property values aside, chicks dig dudes who own their own pads. :bigpimp:

[barmanjay]

Originally posted by BigMass
....
In 5 years you will have spent $132000 to "own" that home
after 5 years you will have paid off about $40k from the principal of the mortgage
that's about $92000 in the toilet

vs 90k for the 5 years of rent

that's assuming the house price will remain constant. If the house price drops then it's much worse.

And if you were to want to sell the house don't forget the realtor commission and lawyer fees that will probably add up to $15k easy

You are absolutely right about everything,.. my scenario wasn't really meant to be short term and referring to a home for always. Not a flip.

Even with your rough math, there is still 90k wasted, but in the purchase of a home,.. the lenders will see that you have "on paper" 40k in equity, which is the 2nd part of red's statement in regards to getting credit more easily with homeownership

Again you are correct with your rough math,.. still wasting 90k in the 5 years.

and in the next 5 years it'll be 80k wasted

5 years after that it's 60k, and the 5 years after that, something like 40k wasted.

If you 'roughly' looked at it in long term,.. over 20 years

As the principal is paid down, you pay less into interest

renting loses 360k over 20 years

owning loses 270k

again rough figures with no calculations.

No matter what we do,.. the lenders win,.. just how much will we let them win?

more by renting? or a little bit less with buying?

[autosm]

Originally posted by extm88





I seriously hope you are talking about higher priced homes with such a statement.
If you honestly think that the average priced sfh/condo is going to drop 100k within a year then i may have just met the most pessimistic person online.
To each his own though,
:bigpimp:

Single family average selling price. Realistic not pessimistic

The only light I see is interest rates can not be raised,if they are there will be mass foreclosures.

Low rates are a big part of prices being driven up in the first place.the only difference now is the high paying jobs are disappearing?

As said by someone else" when you can buy 3 or 4 nice houses in the USA for the price of one in Calgary somthing is very wrong".


You won't have any equity when you are under water and may have to come up with the difference when the mortgage comes due?

[autosm]

8322 Edgebrook DR NW $ 485,000




FORECLOSURE**** Great Value for large, spacious 2317 sq', 3 bedroom, 2 1/2 bath plus loft family home in Edgemont. This HANDYMAN-SPECIAL has a Bright 2-storey Foyer, Sunken Living Room, Wood-burning fireplace, Skylight and Multi-Vaulted ceiling. The Bright Breakfast nook faces east, and upper Master Bedroom has a 5-piece ensuite. There are 2 other spacious bedrooms, loft and upper level Laundry room. This Stucco home with Deck and Cedar Shakes is on a corner lot, has a large Mud Room, carpet and lino flooring. See how you can make this into a Beautiful Home!!

[BigMass]

Originally posted by barmanjay


You are absolutely right about everything,.. my scenario wasn't really meant to be short term and referring to a home for always. Not a flip.

Even with your rough math, there is still 90k wasted, but in the purchase of a home,.. the lenders will see that you have "on paper" 40k in equity, which is the 2nd part of red's statement in regards to getting credit more easily with homeownership

Again you are correct with your rough math,.. still wasting 90k in the 5 years.

and in the next 5 years it'll be 80k wasted

5 years after that it's 60k, and the 5 years after that, something like 40k wasted.

If you 'roughly' looked at it in long term,.. over 20 years

As the principal is paid down, you pay less into interest

renting loses 360k over 20 years

owning loses 270k

again rough figures with no calculations.

No matter what we do,.. the lenders win,.. just how much will we let them win?

more by renting? or a little bit less with buying?

Yep you're right. My dad made out like a bandit on his house. Why? He lived in it for 20 years and eventually paid it off. The days of quick flips for fortunes may be over, but looking for a place to put down roots is always a good reason to buy, and there are deals to be had in any market.

[extm88]

I love this thread,
its like a tug a war
back and forth
rent vs own
todays market vs tomos market

A little controversy is good for our lives:devil:

[jadeboy]

I was given a very good advice from one of my rich friend who has brought/sold about 30 houses..

You don't need to predict the bottom but don't buy when the market is in a nose drive..

Wait until the market starts to goes up and maybe down for a few months (leveling off)... then that when to buy..In our current environment what is clear -> when the housing does goes back up.. it will move slowly.. nothing like the craziness of 2005-2007.. therefore there is no major disadvantages to waiting..But there may be a big disadvantage to buying if the housing market keeps going down...

[max_boost]

^^
:werd:

That advice is just part of the fundamentals of investing. Buy something on its way up and not on its way down. I guess home ownership is different though ;)

[barmanjay]

Originally posted by max_boost
... I guess home ownership is different though ;)

soley depends on motivation and purpose of the particular home ownership ;)

it can be different and it can't be different.

[jadeboy]

Originally posted by max_boost
^^
:werd:

That advice is just part of the fundamentals of investing. Buy something on its way up and not on its way down. I guess home ownership is different though ;)

Fundamentals investment .. buy low sell high..

He not saying to buy when things goes up... it's when things goes down... then level off for a few months then that when to buy...

Also, another key thing he tells me... no matter what happen... within 5 years of your purchases of your house (not condos) price WILL be higher.. you can't said that about all other investments. If it is not higher, then the world is kinda *ucked.

[max_boost]

Fundamentals of investing, you can't pick the bottom or the top. The money is made somewhere in between.

I'm willing to bet if you take the stock market index today vs your average home selling price today, the stock market index will gain a higher % return 5 years from now.

:devil:

[lasthuzzah]

Inflation helps a homeowner, and it hurts a renter. Over the long run, renters can expect higher and higher rents while a homeowner has the same mortgage payment. Also because of inflation that mortgage payment is going to look pretty pithy in 10 years.

[cmyden]

Also, another key thing he tells me... no matter what happen... within 5 years of your purchases of your house (not condos) price WILL be higher.. you can't said that about all other investments. If it is not higher, then the world is kinda *ucked.

If he really did tell you that, then I would dismiss everything he's ever said to you about investing.