Why are condo prices still so high?

[Manhattan]

I thought condo prices were supposed to crash this year. I've been keeping a close eye on the market since winter and prices are still ridiculously high. A newer 2-bedroom condo downtown will still easily cost you at least mid-300K.

There's hardly been any drop in condo pricing with the economy busting and new constructions going under. Any resident 'condo experts' care to offer their insight on the market this summer and onwards?

[sputnik]

It is called "supply and demand".

What made you so sure that condo prices were going to crash?

[narou]

I see the supply but where is the demand.

[Crymson]

I think it's because there is alot of young guys who've been riding the boom because they couldn't get into something decent. They've saved up their downpayment and have been waiting for decent stuff to come down to the 300k level, which is affordable with a 3.7% mortgage.

I bought in April, downtown. Not a hi-rise though.

And there is demand. I'm sure if you did an absorption rate calculation on sub 350,000 condos, downtown -- you'd likely see that it's pretty close to a balanced market now.

[benyl]

Many condos are owned by speculators and people who rent them out.

Most can service the mortgage and don't need to sell at a loss.

[sputnik]

Originally posted by narou
I see the supply but where is the demand.

Every time a condo sells.

[Manhattan]

CREA estimated condo prices would plummet this year. It's dropped a bit from the fever market last summer but it's still way too high in my opinion. Word of mouth from different realtors and friends also suggested condo prices would take a big hit but so far it hasn't happened.

Supply has also been minimal. I see very few new listings week to week. I'm only looking at newer hi-rise downtown condos. Afraid an older condo might be hard to sell...

[Ed the SOHC]

It's spring/summer season which brings out more buyers. Also, rates low right now so it encourages first time buyers to come out.

[Manhattan]

Originally posted by benyl
Many condos are owned by speculators and people who rent them out.

Most can service the mortgage and don't need to sell at a loss.

I see this quite a bit. 2 bedroom condos D/T easily can rent out for 2G's/month so why would they sell. Aren't there limits to how many units can be sold to speculators and rented?

[sputnik]

Originally posted by Manhattan
CREA estimated condo prices would plummet this year. It's dropped a bit from the fever market last summer but it's still way too high in my opinion. Word of mouth from different realtors and friends also suggested condo prices would take a big hit but so far it hasn't happened.

Supply has also been minimal. I see very few new listings week to week. I'm only looking at newer hi-rise downtown condos. Afraid an older condo might be hard to sell...

Sorry to hear that they got your hopes up.

If I listened to every pessimistic friend, blog, realtor or family member over the past 6 months I would believe that the real estate apocalypse was right around the corner.

I remember people claiming shortly after the stock market fell that house prices in Calgary were going to average $200k and return to 2002-2003 prices. I have friends that still think that they will be able to buy a SFH for under $225k before the end of the year.

Looks like the spring season combined with low interest rates is pushing up demand again. Oil is also over $68/barrel which is good for most employed people in Calgary.

[rc2002]

The effects of the slowdown haven't really been felt yet. For the most part, people have been able to hold on and pay their mortgages.

Interest rates can't stay at these historic lows forever. Inflation due to the large amounts of printed money will eventually push them up.

[barmanjay]

CREA - Canadian Real Estate Association

not calgary specific

Although we weren't immune to what has happened,.. we surely have a very different marketplace, mostly due to being an oil/gas supply province.

I'm sure if you look elsewhere in canada, you might find condo prices better.

I can't speculate anything for the future of calgary,.. but it sure seems the lower priced properties (under 350k) seems to have stabilized and are moving quite well.

[ExtraSlow]

Median condo prices went down about $50,000, but they are back on the way up again acording to the CREB stats.
http://www.andrewkyle.com/mlsca/home...e=weekly_stats

[7thgenvic]

Do as they do on beyond.ca marketplace. Lowball the shit on your offers. Someone will bite sooner or later.
I'm in the same boat right now. I'm considering buying a house instead down south for less then buying a overpriced DT apartment.

[sputnik]

Originally posted by richardchan2002
The effects of the slowdown haven't really been felt yet. For the most part, people have been able to hold on and pay their mortgages.

Interest rates can't stay at these historic lows forever. Inflation due to the large amounts of printed money will eventually push them up.

Printing money is only one part of it.

In order for inflation to go up (and ultimately bring interest rates with it) we will actually need inflation. That means house prices, gas prices or other goods will need to skyrocket in the meantime.

Basically, we will need to see another commodities or exports boom in Calgary (or Canada as a whole) before we start to see interest rates climb dramatically.

[Manhattan]

Originally posted by barmanjay
... but it sure seems the lower priced properties (under 350k) seems to have stabilized and are moving quite well.

Real bad news for me.

[7thgenvic]

^^^talk to Jordan Lotoski^^^ resident agent to the stars

[civic_rida]

I bought my place three months ago. Not a single unit is forsale in my building.

[Manhattan]

Originally posted by civic_rida
I bought my place three months ago. Not a single unit is forsale in my building.

Colours?

[barmanjay]

Originally posted by 7thgenvic
.... I'm considering buying a house instead down south for less then buying a overpriced DT apartment.

SFH's that are of decent sq/ft, in nicer areas and kept well, that are priced around the 300k mark are not staying on the market place long.

even ones that were higher priced, that drop their price to around the 300k mark are moving within a week of the price drop.