The exodus begins

[Incinerator]

Originally Posted by TheyCallMeBruce

420 isn't small? 420 is tiny. I can point you to dozens of my friends who want out of their 400 sq ft condos, but can't because the market is killing them. Initially when you move in, you can tolerate it. Give it 3 months down the road and you could barely fit your belongings, and see how happy you would be with 400 sq ft.

Boy you should really see the place I spent my early childhood in with a family of 4 if you think 420 is not a livable square footage. How'bout 350?

Your friends still have their name on a title. That is already miles better than people paying $1300 to rent a 500 sq. ft place in Vic Park

[Rhettzky]

Originally Posted by Incinerator

I don't think you read it right the first time, I was comparing this to higher prices Vic Park, it's not in Vic Park. And it's not 200K.

You said this...

"There are often inner-city bachelor pads for $210K or less if you bothered to look."

My main point was that a cheap, 420sq. ft., inner city, bachelor pad that is going for less than 200k is going to be a dive. You get what you pay for and while you might find a diamond in the rough, there is a reason it is priced that way.

[Incinerator]

And my main point isn't that you can get a designer pad with SS appliances & granite counter tops with hardwood floors in that price range. It's the simple truth that you CAN buy something that's not a trailer for that price, unlike how everyone seems to think anything livable must be 400K+ in this city. The bottom line is you can pay your landlord's mortgage or you can pay your own. The choice is yours.

[TheyCallMeBruce]

Originally Posted by Incinerator

Boy you should really see the place I spent my early childhood in with a family of 4 if you think 420 is not a livable square footage. How'bout 350?

Your friends still have their name on a title. That is already miles better than people paying $1300 to rent a 500 sq. ft place in Vic Park

How about living in Malaysia in a village with a tiny house made of wood? Can my family and I live it in? You bet. Was it a good quality of life? Hell no.

I see your point, but this is where our opinions differ drastically. Though you may have the option of buying a 400 sq ft condo, doesn't make it acceptable quality of life. And that's Oilers_fan's point. He can't sustain his quality of life, but he has to choose something considerably less because his $50k a year isn't even close to affording him a decent size condo.

[metallicat]

Are there even any market analysts or real estate guru's predicting a downfall in this provinces' housing market? Or is it the opinion of basically everybody that this is the new fact of life here in Alberta for many years to come?

[Incinerator]

Originally Posted by TheyCallMeBruce

How about living in Malaysia in a village with a tiny house made of wood? Can my family and I live it in? You bet. Was it a good quality of life? Hell no.

I see your point, but this is where our opinions differ drastically. Though you may have the option of buying a 400 sq ft condo, doesn't make it acceptable quality of life. And that's Oilers_fan's point. He can't sustain his quality of life, but he has to choose something considerably less because his $50k a year isn't even close to affording him a decent size condo.

Yes, I agree that our opinions do differ here. My take is that if it's not an acceptable quality of life, then (insert anyone here) should EITHER: adjust their standards/expectations accordingly for the time being until they can afford something better. (usually through building up equity by being in the market in the first place) OR they can seek alternative markets to get into elsewhere where the quality of life is acceptable to them.

But there are obviously other consequences of relocating that they would have to deal with such as job opportunities, decreased pay, not being able to ever return once you got out etc etc. There are choices, just not a lot of them, but most people will have to make that choice one way or another. It's just the way our planet spins.

[SeeGeeWhy]

Originally Posted by Incinerator

How is getting financing for your own primary residence playing with fire? Shouldn't it be the other way around? If you're an investor you can overstretch yourself holding multiple mortgages. I don't think there is much to worry about when you only have one mortgage with interest rates still hovering around the low end of 5.xx% as long as you have a steady income.

That's exactly it. Interest rates will not stay at 5%, and you may or may not always have steady employment, good health, proper insurance, or all the other necessary requirements to service your debts.

This holds true for both the individual home owner and the investor.

The difference being that if you are stretching the boundaries on financing for your primary residence in this current market, there isn't much room for change in economic conditions before you can find yourself homeless.

As an investor, you can decide how much you wish to leverage what you have, and that is often a calculated risk based on what you can afford to lose.

So... market conditions change, and the individual homeowner is homeless, the investor has lost his assets, but still has a roof over his head.

[Incinerator]

Originally Posted by oilers_fan

Are there even any market analysts or real estate guru's predicting a downfall in this provinces' housing market? Or is it the opinion of basically everybody that this is the new fact of life here in Alberta for many years to come?

That is the consensus of those in the market buying & selling. No gurus, analyst or individual can dictate the market but those who participate in it themselves, collectively as one big driving force of the market itself.

Unless there's another NEP I personally would not be holding my breath for a repeat of the 80s crash. Opinions may differ on here.

[SeeGeeWhy]

Originally Posted by oilers_fan

Are there even any market analysts or real estate guru's predicting a downfall in this provinces' housing market? Or is it the opinion of basically everybody that this is the new fact of life here in Alberta for many years to come?

Well, unless they are holding a crystal ball, I would be inclined to think for yourself before taking any claims, positive or negative, at face value.

[Cowboy89]

Originally Posted by oilers_fan

Are there even any market analysts or real estate guru's predicting a downfall in this provinces' housing market? Or is it the opinion of basically everybody that this is the new fact of life here in Alberta for many years to come?

The problem with any market analysts in real estate is that they are tremendously biased. They make their money and get hired and fired based on their short-term outlooks and pay little attention to the long-term: ie 6 months and beyond. Realtors make money on commision and thus keep how long they have things listed a heavily guarded secret when things are starting to fall. It seems entirely reasonable for a housebuying couple to 'ante-up' an additional $20K and believeing a realtor's pressure sell tactics after a period of time like the last one we just experienced.

As for outlook of the Alberta market it is extremely tied to the price of Oil. Some of the independent research firm's call on Oil is for it to stabalize in the $50-60 range and producers will be better able to control their costs. What this means for the housing market is that it should drop off from the 'panic induced' highs of 2005-2007 and then remain fairly stable plateau as contruction costs stabilize as well. This new plateau will be much higher than 2004 prices but much more stable.

[automaton 3]

Originally Posted by Vulcan

I sold my house and got out of Calgary in 02. I've been kicking myself that I left too early and missed the big rise in property values but where I'm living now, values have more than doubled in the last four years. Still cheap compared to Calgary or Vancouver but as baby boomers retire and move out, prices in small towns should skyrocket. With these people moving out of the big cities, vacancies should increase there, driving prices down. Just my ramblings.

My parents did the exact same thing, sold all of their investment properties in Alberta and moved to the Sunshine Coast in 2000. They also were wondering if they left too soon, but their house there overlooking the ocean has now almost tripled in value.

Worked out well in the end.

[Teh_Bandwagoner]

Originally Posted by ken0042

I guess in my mind a place that small isn't something I would consider a home; more of a place to stay.

I would say that's not a bad mind-set either. Pick up a small place, build up your equity and upgrade when the timing's right. Again, I think people want to be in a mansion by the time they're 30. Not gonna happen. Start small, work your way up.

[Incinerator]

Originally Posted by SeeGeeWhy

That's exactly it. Interest rates will not stay at 5%, and you may or may not always have steady employment, good health, proper insurance, or all the other necessary requirements to service your debts.

This holds true for both the individual home owner and the investor.

The difference being that if you are stretching the boundaries on financing for your primary residence, there isn't much room for change in economic conditions before you can find yourself homeless.

As an investor, you can decide how much you wish to leverage what you have, and that is often a calculated risk based on what you can afford to lose.

So... market conditions change, and the individual homeowner is homeless, the investor has lost his assets, but still has a roof over his head.

How do you suppose the investor will still have $$ to pay his own mortgage if all his investment properties are being foreclosed?

Sure, interest rates could rise to 8-10% overnight, you could lose your $80K job, your house may burn down, your ex-girlfriend could win the lottery tomorrow and rub it in, YOU could win the lottery tomorrow & do the same. But why waste your time worrying about things not likely to happen? (That's what insurance is for) The likelihood of a economic downturn in Calgary for the foreseeable future is slim to none, and slim just left town. The fundamentals for growth & more growth are all there. So why would anyone worry about not having a job tomorrow? next year? next 5 years?

My crystal ball is as clear as yours or anyone elses, who knows if another NEP will come? But we can make reasonable forecasts. People all try to do whats necessary to attain desirable living standards & quality of life, it's human nature. Right now the times say roll with the ball or get left behind. Our choice is thus get on the bandwagon or ride the bicycle out of town. None of us make the rules, but it doesn't mean we don't have to play by them if we NEED to play.

[Burninator]

I am pretty much in the same boat as oilers_fan. I am young and my wage is similar to his. I didn't miss out on buying a place when the market was low because I was still in school and it wasn't an option for me. But now I am in the work force and I want to have a place. There are two options for me. Either rent or buy. I am hesitant to rent because I will be basically paying around $900-$1100 for a inner city apartment, which is in the ball park of a mortgage payment. I would rather not be throwing my money away at rent, instead I would rather be investing it into the property.

Unfortunately finding a place in my mortgage bracket and close downtown is easier said than done. Hopefully I can get my parents to co-sign with me so I can get a decent mortgage.

This my plan. I don't really know if it's feasible so not, but this is what I would like to do. With all these news condos going up around the downtown area I would like to put a deposit on a two bedroom condo. I would like to have picked one before they break ground, try and buy one the first day they go on sale or close to. It seems they are cheaper at the pre-construction prices as compared to when they are finished. So in the time that it takes to build (roughly 1 and half to 2 years) I will have hopefully saved up a big bundle of cash that I can use as the down payment. I should also be making a lot more at my job, but if the monthly payment is still too much I can have a roommate to help offset the costs. Eventually I will either have no roommate or I'll be buying a bigger property.

So for all you experts out there, is this plan feasible or I am just dreaming and I should keep my sights set something less desirable?

[Sylvanfan]

The key is having a plan and working towards it. If you have a plan, and thats what you want you're 100% more likely to make it succeed. It's people who don't have plans who lose out because they sit around and react to things. Take it from me I was far too reactive for my own good. It's a cheesy cliche, but set goals, devise a plan and work towards them, it does work.

But don't take my word at gospel, I'm no expert. In fact if anything I'm a moron who didn't listen to experts and as a result I won't be retiring a multi millionaire at the age of 40 like a lot of my friends will. The biggest difference between them and me, is they set goals, devised a plan and worked towards them. I was happy just to get by being a ######.

[SeeGeeWhy]

Originally Posted by Incinerator

How do you suppose the investor will still have $$ to pay his own mortgage if all his investment properties are being foreclosed?

Sure, interest rates could rise to 8-10% overnight, you could lose your $80K job, your house may burn down, your ex-girlfriend could win the lottery tomorrow and rub it in, YOU could win the lottery tomorrow & do the same. But why waste your time worrying about things not likely to happen? (That's what insurance is for) The likelihood of a economic downturn in Calgary for the foreseeable future is slim to none, and slim just left town. The fundamentals for growth & more growth are all there. So why would anyone worry about not having a job tomorrow? next year? next 5 years?

My crystal ball is as clear as yours or anyone elses, who knows if another NEP will come? But we can make reasonable forecasts. People all try to do whats necessary to attain desirable living standards & quality of life, it's human nature. Right now the times say roll with the ball or get left behind. Our choice is thus get on the bandwagon or ride the bicycle out of town. None of us make the rules, but it doesn't mean we don't have to play by them if we NEED to play.

The point of my argument is that when an investor weighs his ability to finance a deal vs his ability to pay for it (as an individual homeowner will), they are not in a NEED situation, but a WANT situation. Do they NEED to go ahead and mortgage that next rental or flip? No, but they do it to turn a profit, because it is cheap money and are confident in their abilities.

An individual homeowner is looking at it as a basic need, therefore I would say that he has more on the line as compared to an investor.

[Incinerator]

Originally Posted by Burninator

This my plan. I don't really know if it's feasible so not, but this is what I would like to do. With all these news condos going up around the downtown area I would like to put a deposit on a two bedroom condo. I would like to have picked one before they break ground, try and buy one the first day they go on sale or close to. It seems they are cheaper at the pre-construction prices as compared to when they are finished. So in the time that it takes to build (roughly 1 and half to 2 years) I will have hopefully saved up a big bundle of cash that I can use as the down payment.

You have the right idea, but most builders have smartened up nowadays, they will be calling for your down payment within 2 weeks of you putting down that $1000 holding deposit. This is to curb speculators who end up selling by assignment just before they take possession.

If your parents are willing you should definitely let them help either with real $ or by co-signing. This is the preferred method of getting a sufficient mortgage for most young first time buyers today. Do shop around with your mortgage broker for the best rate, it'd be more trouble than you want if you do it at all the financial institutions one by one on your own.

A 2 bedroom, 750+ sq ft. in a brand new modern high rise in downtown Calgary is at least $410K to start depending on building location, floor location, and interior finishings. Just to give you a heads up. You may want to have your roommate lined up before you buy. Even better if your roommate is a sibling, then you can have an equal share in the place instead of one paying the other rent $.

[TheyCallMeBruce]

Originally Posted by Burninator

This my plan. I don't really know if it's feasible so not, but this is what I would like to do. With all these news condos going up around the downtown area I would like to put a deposit on a two bedroom condo. I would like to have picked one before they break ground, try and buy one the first day they go on sale or close to. It seems they are cheaper at the pre-construction prices as compared to when they are finished. So in the time that it takes to build (roughly 1 and half to 2 years) I will have hopefully saved up a big bundle of cash that I can use as the down payment. I should also be making a lot more at my job, but if the monthly payment is still too much I can have a roommate to help offset the costs. Eventually I will either have no roommate or I'll be buying a bigger property.

One word of caution. Developers have the been in the habit lately of using the escape clause in your contract. I got screwed over by the developer Streetside because of it. Once the cost got too high and the profit wasn't enough, they enacted the clause.

[Incinerator]

Originally Posted by TheyCallMeBruce

One word of caution. Developers have the been in the habit lately of using the escape clause in your contract. I got screwed over by the developer Streetside because of it. Once the cost got too high and the profit wasn't enough, they enacted the clause.

Streetside...*shudders*

Bruce speaks the truth, read your contract carefully, and don't let your moment of cheapness sucker you into using the builder's lawyer because the legal fees are included. Spend that grand & get your own lawyer to look over the whole thing for you.

[Rhettzky]

Originally Posted by Burninator

So for all you experts out there, is this plan feasible or I am just dreaming and I should keep my sights set something less desirable?

I'm no expert but we were looking when Sasso was first releasing and it was very cheap even by market standards at that time. Vetro has a waiting list and you can get on it here <http://www.vetrolife.com/>, also they may be able to give you more information on other Cove properties in the downtown core that are available.