Home prices at lowest point in more than 10 years

[Weapon_R]

Originally posted by max_boost
A lot of real estate experts on here.



What does Jordan Lotoski think? It's ALWAYS a good time to buy? Right bra?

Recession: Realtor says "Buy now, it's a buyers market"

Boom: Realtor says "Buy now, property can only go up!"

[sputnik]

Originally posted by Weapon_R


Recession: Realtor says "Buy now, it's a buyers market"

Boom: Realtor says "Buy now, property can only go up!"

Just like the housing market bears...

Prices go up 2% - "This bubble is about to pop! Don't buy houses"

Prices go down 2% - "The bubble is popping! Don't buy. Houses will drop another 50% just like Detroit."

[arian_ma]

Originally posted by sputnik
I would also venture to say that the vast majority of people with mortgages in Canada own more than half of their homes and many people own their homes completely outright. I would also guess that the people who are mortgaged to the max are a tiny minority of home owners.

Where is this coming from? Do you have even a shred of evidence to back up this wild claim?

Here's a photo for you to think about:

from greaterfool

[AndyL]

http://www.greaterfool.ca/wp-content.../01/Debt-1.jpg

I doubt that number, heloc that shit, is too common, I'd be willing to bet more than half of Canada is underwater on their mortgages... if the market goes down much.

We just bought... 3 weeks to possesion baby, but we sure as heck didn't buy in Calgary, got a decent size house 2600sqft on a half acre of property... with significant recent upgrades... and we paid a lot less than even a forest lawn crackhouse...

[r3ccOs]

Originally posted by AndyL
http://www.greaterfool.ca/wp-content.../01/Debt-1.jpg

I doubt that number, heloc that shit, is too common, I'd be willing to bet more than half of Canada is underwater on their mortgages... if the market goes down much.

We just bought... 3 weeks to possesion baby, but we sure as heck didn't buy in Calgary, got a decent size house 2600sqft on a half acre of property... with significant recent upgrades... and we paid a lot less than even a forest lawn crackhouse...

I'm sure Jordan can correct me, but overall... I don't think Alberta is that bad nor the rest of Canada

Outside of the insane condo market in Vancouver, thanks to foreign (chinese) investors wanting "new" downtown condos and creating demand...

Take for example... Winnipeg
Where honestly there is no industry outside of municiple, federal, provincial and other crown corporations... somehow manages to have seen a insane boom in the last 30 months.
Its not a financial boom, its just a boom strickly in the real-estate market.
There are no new industries... manufacturing, mining, tourism, nothing
but their housing prices are competitive to ours, yet they pay a significant amount more in Property taxes and utilities (thanks to their winters)

I think its all things in relative... where perhaps the valuation of our property looks to be overly inflated when compared to a recessed US and possibly world market, where their residential assets have hit a 10 year low

what makes Calgary particularly volitile is the industry that supports it (and alberta) and that the people my age and younger who've been living in the golden Era of this province, never ever had to face hardship, and could not possibly comprehend that anything bad could ever happen to them, even when it was happening to others just months ago.

also, we live in a cosmopolitan city, where blue collar and white collar earn roughly the same (often times where trades earn more) and its all about keeping up with the Jones's
just cause someone has something and that you can "leverage" for that something, doesn't mean you have to... and boy... working for the bank, you see how much trouble people get into, thinking like that

[sputnik]

Originally posted by r3ccOs
Take for example... Winnipeg
Where honestly there is no industry outside of municiple, federal, provincial and other crown corporations... somehow manages to have seen a insane boom in the last 30 months.
Its not a financial boom, its just a boom strickly in the real-estate market.
There are no new industries... manufacturing, mining, tourism, nothing
but their housing prices are competitive to ours, yet they pay a significant amount more in Property taxes and utilities (thanks to their winters)

There is so much wrong with this post it hurts.

14% of working Winnipeg residents work in the public sector. That leaves 86% working for private companies. Sure, other than say Great West Life, Investors Group, Kitchen Craft, Palliser Furniture and MTS Allstream there aren't that many big head offices. Other companies like CPR, CN, Boeing, Bristol Aerospace, NewFlyer, MCI, NorthWest Company also have big offices in Winnipeg.

As well, Winnipeg is filled with decent sized companies that most would ignore. Take a company like Pollard Banknote (in business since 1907) for example. They have 1000+ employees are a private family owned company and print lottery scratch tickets for customers worldwide. Something you don't think about yet a big employer nonetheless. There are lots of these kind of companies in Winnipeg.

Money is also different here. Calgary is filled with tons of "new money". Many wealthy people in Calgary tend to be first generation millionaires and like to flaunt their new found wealth. In Winnipeg you have families that have been wealthy since the late 1800s and surprisingly live more modestly. My neighbour across the street is a third generation lawyer and runs a large firm. He is very wealthy, yet lives in a 1200 sq ft bungalow and drives a PT Cruiser to work every day. You would never know his status if you saw him on the street.

Is Winnipeg as affluent as Calgary. No. Oil is a hell of a commodity. However Winnipeg is far from a low income blue collar wasteland.

Now that you have an overview, the housing boom is not really much of a surprise. Most houses between 2006-2007 doubled in value in almost every major center in Canada. Winnipeg just followed suit. That said, houses are still considerably cheaper.

I live in a 1950s bungalow on a tree lined street 5km from Portage and Main. I have a 50ft lot and I am a half a block from a huge park on the river. My neighbours are lawyers, cops, doctors, teachers and retired seniors. I paid less than half of what I would have paid for for say the same house in and around Confederation Park or Parkdale. Houses aren't that expensive here. The only houses at close to par with Calgary are new builds the only difference (since construction costs are pretty similar across the country) is the price of your lot. This can take about $50-100k off the price of the house here.

As for utilities. Electricity is cheaper. Natural gas is slightly more (due to pipeline transport costs).

My taxes are higher than they were when I was in Calgary, but pretty much at par with the rest of the country that isn't Alberta. Billions per year from oil and gas royalties does a great deal for Alberta. Most of people recognize that.

As for the boom being only in the real estate market. I would disagree. The city has changed dramatically in the past 10 years since I first left for Calgary. Businesses are growing and so is the population. The downtown core is being revitalized and buildings that sat vacant for decades are now condos and offices. Restaurants are popping up everywhere and new retailers are moving into this city weekly. You have to remember, Winnipeg hasn't been a boom/bust economy for nearly 100 years. It just continues to grow steadily and most people here would rather it be like that.

As for this thread. I would expect Winnipeg to be the last city to crash in terms of real estate.

[Beerking]

Originally posted by BananaFob


Considering precedent (ie: japan), there's virtually no conceivable way that either the Canadian government or the US government will be raising interest rates any time soon. Japan had decades of near 0 interest rates after their real estate crisis.

Maybe its because the Bank of Canada can only control the overnight lending rate (at 1% right now). But mortgage rates are based of off 30yr bond yields, and that is controlled by the open market. Bond yields are at record lows and are screaming recession. That leaves us with 1 option...PRINT...what does printing lead too??? Higher demand of interest payments on bonds by investors to hold them.

Japan is a unique case in the sense that most of their bonds are held within country, not by foreigners...but Japan is in bad shape regardless, Real Estate is down 80% since 1990 and so is the Nikkei.

[BananaFob]

Originally posted by sputnik


There is so much wrong with this post it hurts.

14% of working Winnipeg residents work in the public sector. That leaves 86% working for private companies. Sure, other than say Great West Life, Investors Group, Kitchen Craft, Palliser Furniture and MTS Allstream there aren't that many big head offices. Other companies like CPR, CN, Boeing, Bristol Aerospace, NewFlyer, MCI, NorthWest Company also have big offices in Winnipeg.

As well, Winnipeg is filled with decent sized companies that most would ignore. Take a company like Pollard Banknote (in business since 1907) for example. They have 1000+ employees are a private family owned company and print lottery scratch tickets for customers worldwide. Something you don't think about yet a big employer nonetheless. There are lots of these kind of companies in Winnipeg.

Money is also different here. Calgary is filled with tons of "new money". Many wealthy people in Calgary tend to be first generation millionaires and like to flaunt their new found wealth. In Winnipeg you have families that have been wealthy since the late 1800s and surprisingly live more modestly. My neighbour across the street is a third generation lawyer and runs a large firm. He is very wealthy, yet lives in a 1200 sq ft bungalow and drives a PT Cruiser to work every day. You would never know his status if you saw him on the street.

Is Winnipeg as affluent as Calgary. No. Oil is a hell of a commodity. However Winnipeg is far from a low income blue collar wasteland.

Now that you have an overview, the housing boom is not really much of a surprise. Most houses between 2006-2007 doubled in value in almost every major center in Canada. Winnipeg just followed suit. That said, houses are still considerably cheaper.

I live in a 1950s bungalow on a tree lined street 5km from Portage and Main. I have a 50ft lot and I am a half a block from a huge park on the river. My neighbours are lawyers, cops, doctors, teachers and retired seniors. I paid less than half of what I would have paid for for say the same house in and around Confederation Park or Parkdale. Houses aren't that expensive here. The only houses at close to par with Calgary are new builds the only difference (since construction costs are pretty similar across the country) is the price of your lot. This can take about $50-100k off the price of the house here.

As for utilities. Electricity is cheaper. Natural gas is slightly more (due to pipeline transport costs).

My taxes are higher than they were when I was in Calgary, but pretty much at par with the rest of the country that isn't Alberta. Billions per year from oil and gas royalties does a great deal for Alberta. Most of people recognize that.

As for the boom being only in the real estate market. I would disagree. The city has changed dramatically in the past 10 years since I first left for Calgary. Businesses are growing and so is the population. The downtown core is being revitalized and buildings that sat vacant for decades are now condos and offices. Restaurants are popping up everywhere and new retailers are moving into this city weekly. You have to remember, Winnipeg hasn't been a boom/bust economy for nearly 100 years. It just continues to grow steadily and most people here would rather it be like that.

As for this thread. I would expect Winnipeg to be the last city to crash in terms of real estate.

Seconded. Not to mention the insanely low residential vacancy of 0.7% right now. Absorption isn't being taken up by investors, it's being taken up by people not wanting to live in a 650sf apartment with 3 others.

[phreezee]

Originally posted by sputnik

Most houses between 2006-2007 doubled in value in almost every major center in Canada. Winnipeg just followed suit.

This is what most people have an exception with.
Saskatchewan has mining, NewFoundLand has off shore oil, and Winnipeg just follows suit?

Winnipeg may have improved, but there are still social problems and high crime rates that effect housing prices also. Any improvements are not substantial enough to warrant a doubling of property value.

[Tik-Tok]

Originally posted by Weapon_R

Recession: Realtor says "Buy now, it's a buyers market"
Boom: Realtor says "Buy now, property can only go up!"

Seemed like these had to happen, lol.

[sputnik]

Originally posted by phreezee
This is what most people have an exception with.
Saskatchewan has mining, NewFoundLand has off shore oil, and Winnipeg just follows suit?

Winnipeg may have improved, but there are still social problems and high crime rates that effect housing prices also. Any improvements are not substantial enough to warrant a doubling of property value.

Winnipeg is not a single industry town. It manufactures products, provides transport and other services for countless industries.

It is that reason why you don't see boom/bust scenarios in Winnipeg.

Take the Calgary boom and how Winnipeg was affected.

- Take a look at the kitchen cabinets in most new middle income homes in Calgary. Guess where many are built? Kitchen Craft in Winnipeg.
- How about the new transit buses to support a booming sprawling city. Built in Winnipeg.
- New planes being built around the world? Parts being built in Winnipeg.
- National trucking industry (Reimer, Bison, Quick etc)? Based in Winnipeg.
- Manitoba has mining. Northern Manitoba has some of the richest nickel, copper, gold, silver and lead deposits in North America. Hudbay minerals and INCO are active here.
- Manitoba has hydro-electric power and is constantly growing. Power export deals are worth billions and provide power for NW Ontario, Minnesota, Wisconsin and North Dakota.

Winnipeg has a ton of business. However like I said earlier it is business that doesn't make the front page of the Financial Post. It is stuff that we don't think about that makes people very wealthy here.

So you take a healthy mix of small, medium and large business in Winnipeg all adding staff, increasing salaries and growing as a result of booms happening throughout Canada and you start to see a shortage of real estate. Add in low interest rates, nationally competitive wages and already low priced homes and you begin to see a frenzy.

When we were trying to sell our house in Auburn Bay in October of 2009 we were competing with multiple offers on homes in Winnipeg. We lost out on a couple of homes that went for 15-20% over list. One such house had 17 offers.

Don't get me wrong. My 9 years in Calgary was great for making decent money and advancing my career, but my priorities changed and I went back to where my family is. I have no hard feelings for Alberta and visit my friends and wife's family on a regular basis.

As for social problems and crime. They exist everywhere. They just look different from city to city. Fortunately for Alberta it is financially advantageous for aboriginal people to stay on reserves to benefit from oil revenues. In the rest of Canada, the opposite is true. This leads to areas dealing with poverty, gang activity and crime. That said. Crime isn't much different in cities like Edmonton, Regina or Toronto. So we don't get that worked up about it. Americans would laugh at most of us when we complain about crime in Canada.

[HiTempguy1]

Originally posted by sputnik

Americans would laugh at most of us when we complain about crime in Canada.

American cities are friggin' scary. When people complain of ghettos in Canada, it's like "lol!"

[phreezee]

Originally posted by sputnik


So you take a healthy mix of small, medium and large business in Winnipeg all adding staff, increasing salaries and growing as a result of booms happening throughout Canada and you start to see a shortage of real estate. Add in low interest rates, nationally competitive wages and already low priced homes and you begin to see a frenzy.

This goes against stats that report net migration out of Manitoba though.

http://www.winnipegfreepress.com/bus...114784164.html

Immigration is high and would indeed increase demand, but not enough to create a shortage though.

http://www2.immigratemanitoba.com/as...nities_all.xls

Although your points seem valid, those businesses you list have all been around for a long time so the seemingly over night doubling of property values still doesn't make sense to me.

Comparatively, when housing went crazy here in 2006 the net migration was 45k people (http://www.cbc.ca/news/canada/calgar...migration.html)

[sputnik]

Originally posted by phreezee


This goes against stats that report net migration out of Manitoba though.

http://www.winnipegfreepress.com/bus...114784164.html

Immigration is high and would indeed increase demand, but not enough to create a shortage though.

http://www2.immigratemanitoba.com/as...nities_all.xls

Although your points seem valid, those businesses you list have all been around for a long time so the seemingly over night doubling of property values still doesn't make sense to me.

Comparatively, when housing went crazy here in 2006 the net migration was 45k people (http://www.cbc.ca/news/canada/calgar...migration.html)

The thing you are failing to recognize is that the factors surrounding supply and demand with real estate in Winnipeg are different than those that impact house prices in Calgary. In Calgary it was a huge population increase that caused the boom, in Winnipeg it was increasing wages compounded with a depressed housing market.

In Winnipeg existing homes (not new builds) were quite cheap (and still are compared to national averages) and remained cheap even as new home construction costs (i.e. materials and labour) increased nationally. New homes on a per sq ft basis became far more expensive as construction costs increased while existing house prices remained low.

Winnipeg's low house prices also made it much easier for younger people to buy homes. I know people in their early 20s that are straight out of university buying homes even after the market doubled.

For example. My sister bought her first house in 2001 for $64,900 that she renovated (new garage and basement development). It was a 900 sq ft 2 bedroom bungalow built in the 60s in a nice residential community. She sold it in 2007 for $180,000. Nearly triple.

HOWEVER. Even at $180,000 it is still a decent buy for a young working couple with a small down payment. You could have 2 people making $35k/year and still easily cover the costs.

In Calgary this didn't exist. Houses STARTED at that price and doubled from there. Hence the reason that the population boom was required. People moving to Calgary were bringing equity from other cities and buying far more expensive houses and the boom jumped.

Houses prices in Winnipeg are still cheap and are still very much in demand and prices are still going up. Additionally new home sales are picking up, but not nearly at the same pace it would be if existing home prices started to match the cost of new construction. It is getting close, but it isn't there yet.

Imagine what the market in Calgary would be like if you could buy this for under $400k.

http://www.realtor.ca/propertyDetail...dKey=323311669

[kaput]

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[HiTempguy1]

Originally posted by kaput
I'm going to check out some condos for sale/rent this weekend. The one I like the most has comparables listed for $430-460k in the same building. The rent they are advertising is $1600/month including utilities (except electricity). I'll let those who are interested do the math on that one.

Condo fees man, condo fees!

[kaput]

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[bspot]

Originally posted by kaput
I'm going to check out some condos for sale/rent this weekend. The one I like the most has comparables listed for $430-460k in the same building. The rent they are advertising is $1600/month including utilities (except electricity). I'll let those who are interested do the math on that one.

[Xtrema]

^ Awesome graph.

There are tons of 2005-2007 purchases that got sent into the rental market and keep rent low.

I think renting is definitely smarter right now.

But renting was a bitch during 2005-2007 as landlords were kicking tenants out to realize profits.

If you have a graph that goes all the way back to 1988, you will see a similar albeit smaller boom/bust cycle as well.

[sputnik]

Originally posted by Xtrema
But renting was a bitch during 2005-2007 as landlords were kicking tenants out to realize profits.

Also if the assumed pending real estate crash is going to be bringing higher interest rates, people renting from those carrying a mortgage will see a jump in their rents too.