Calgary Real Estate predictions?

[Jedi Ninja]

That article reflects mostly old news. All of that loss occurred in the fall. Month over month from June 2009, the latest stats are mostly flat.

http://www.creb.com/public/documents...-2009-july.pdf

The median price of a single family Calgary
metro home in July 2009 was $390,000, showing
an decrease of 2 per cent from June 2009, when
the median price was $399,000, and down 5 per
cent from July 2008, when the median price was
$408,500. The median price of a condominium in
July 2009 was $263,000, down 1 per cent from June
2009, when the median was $265,500, and down 4
per cent from July 2008, when the median price was

$273,500.

[Winsor_Pilates]

Originally Posted by burn_this_city

http://www.calgaryherald.com/Calgary...496/story.html

The drop continues..

Not necessarily. That article is only comparing to prices a year ago which is a foolish way to watch which way prices are currently going.
It only shows you they have gone down in the last year, but if they have gone up in the last 3 months you wouldn't know it from those stats.
For example with simple numbers; if the average price last June was $10, this April and May were $6 and $7 and this June was $8, does that mean the drop continues?

[Deegee]

Sales generally increase in the spring/summer season do they not?

So even using the past three months as a guideline towards the end of summer may not be the best indicator of where things are going.

[troutman]

This is anecdotal, but in June and July, I found homes in the $300K range were moving quickly - mostly young couples taking advantage of low interest rates. Now, I'm starting to see more expensive homes sell up to $ 1 M or more.

[mykalberta]

Where are homes located in the 300k range in Calgary - just curious. Or are these condos/townhouses?

[troutman]

Originally Posted by mykalberta

Where are homes located in the 300k range in Calgary - just curious. Or are these condos/townhouses?

Condos, and small homes in the suburbs.

[Jedi Ninja]

Originally Posted by mykalberta

Where are homes located in the 300k range in Calgary - just curious. Or are these condos/townhouses?

The below represents single family homes with garages, 3+ bedrooms and 2+ baths, priced (asking) between 200K and 400K. MLS doesn't include inventory from new home builders; I know of several areas where you can get new homes in the 300K range.

[Jedi Ninja]

Just for kicks, here is a graph of 1m+.

[Shazam]

The housing market is well on its way to recovery.

Unlike before though, you actually need to have a decent house, and a price to match. Otherwise it will just languish.

[Rerun]

Originally Posted by burn_this_city

http://www.calgaryherald.com/Calgary...496/story.html

The drop continues..

Boy oh boy... here is one disgruntled Calgarian who posted a response in the above story:

Calgary is way over inflated, why pay 350K for a cardboard box in a place that it snows 9 months a year? I was born and raised in Calgary, but i can not stand this place anymore. Average houses in calgary should only be 200K max. They are crapily built. Ill be out of this city in 2 years thank god! I can't stand the greed and the super annoying people that live here

Max $200,000 average house prices in a city as large and prosperous as Calgary? Ya right. Can I get some of that stuff you're smoking too? I just bought a house in Okotoks and the land alone was valued at $140,000.

See ya later buddy. Don't let the door hit your @ss on the way out.

[burn_this_city]

Originally Posted by fotze

I would plot the average price numbers I have been tracking since May -06, but the process of posting pictures is such a pain in the arse I won't bother.

The low point was Feb at $414.6k increased every month til June where it was $447.1k, it dropped in July to $436.8k.

Prices increased from February to July month to month at the following percentages.

.6%
.8%
1.2%
5.1%
-2.3%

I'd be curious to know the total drop since 06. I'd also like to know why people believe the market is recovering. Especially when you consider the economy and jobs lost this year.

[Cowboy89]

Originally Posted by burn_this_city

I'd be curious to know the total drop since 06. I'd also like to know why people believe the market is recovering. Especially when you consider the economy and jobs lost this year.

Average price increases can also be misleading. If less units are moving then that doesn't speak well for the 'hidden inventory' effect. A lot of realty-type people don't want to admit that we're in an over-built situation and it's not just the homes on MLS that are in essence 'for sale.'

I would venture a guess and imagine that the increase in sales is solely first time buyers and upgraders taking advantage of low interest rates. After a while there just isn't the same volume of those people left who haven't already made their move. Hopefully then there's actually GDP increases fuelling growth or the market will plunge.

[Shazam]

Originally Posted by Cowboy89

Average price increases can also be misleading. If less units are moving then that doesn't speak well for the 'hidden inventory' effect. A lot of realty-type people don't want to admit that we're in an over-built situation and it's not just the homes on MLS that are in essence 'for sale.'

Eh? My realtor told me straight out that my house would be directly competing against new houses.

I can't really see how anyone could say otherwise - there's always new houses being built.

I would venture a guess and imagine that the increase in sales is solely first time buyers and upgraders taking advantage of low interest rates. After a while there just isn't the same volume of those people left who haven't already made their move. Hopefully then there's actually GDP increases fuelling growth or the market will plunge.

If you're saying that speculators and people who want to rent out a property are gone, then good riddance to them.

[Potty]

Originally Posted by Shazam

Eh? My realtor told me straight out that my house would be directly competing against new houses.

I can't really see how anyone could say otherwise - there's always new houses being built.

If you're saying that speculators and people who want to rent out a property are gone, then good riddance to them.

Yes, but the people currently buying (lots of first timers) are buying at an unsustainable level. There aren't enough first-time buyers to keep up the current levels of sales. And once interest rates rise, sales numbers will dip again.

[photon]

Why isn't there? Inmigration to the province hasn't really dropped off from what I'd last seen.

EDIT: Though I can't really remember last time I looked into it, it might have been 4-5 months ago.

[Mike Oxlong]

Originally Posted by Potty

Yes, but the people currently buying (lots of first timers) are buying at an unsustainable level. There aren't enough first-time buyers to keep up the current levels of sales. And once interest rates rise, sales numbers will dip again.

Yes there are a lot of first timers buyers purchasing homes right now but why aren't there enough first time buyers to keep up sales? This city's population continues to grow and every single day younger people get older and closer to purchasing their first home.

I don't understand why you think there aren't enough first time home buyers. There will always be lots of first time buyers in the market. Not to mention other buyers.

[Jedi Ninja]

Originally Posted by photon

Why isn't there? Inmigration to the province hasn't really dropped off from what I'd last seen.

EDIT: Though I can't really remember last time I looked into it, it might have been 4-5 months ago.

The main argument against the longer term prospects of the market relates to interest rates. Rates right now are as low as they will get. This has drawn a lot of people into the market. It has also altered the rent-vs-buy equation substantially. But the economics of buying a home on a 2.5% (variable) mortgage versus a more normal rate of 6% are quite dramatic. The interest-only cost of a $400,000 mortgage goes from $10,000 per year to $24000.

The question is, how long can rates stay this low? I wish I had the answer myself. After Japan's property bubble collapsed in the '90s, the bank rate there stayed low for years. The same may happen here.

[Bobblehead]

Originally Posted by Jedi Ninja

The main argument against the longer term prospects of the market relates to interest rates. Rates right now are as low as they will get. This has drawn a lot of people into the market. It has also altered the rent-vs-buy equation substantially. But the economics of buying a home on a 2.5% (variable) mortgage and a more normal rate of 6% are quite dramatic. The interest-only cost of a $400,000 mortgage goes from $10,000 per year to $24000.

The question is, how long can rates stay this low? I wish I had the answer myself. After Japan's property bubble collapsed in the '90s, the bank rate there stayed low for years. The same may happen here.

It is still really low.
http://www.boj.or.jp/en/type/stat/dl...rate/prime.htm

[Potty]

Originally Posted by Mike Oxlong

Yes there are a lot of first timers buyers purchasing homes right now but why aren't there enough first time buyers to keep up sales? This city's population continues to grow and every single day younger people get older and closer to purchasing their first home.

I don't understand why you think there aren't enough first time home buyers. There will always be lots of first time buyers in the market. Not to mention other buyers.

There are always first time buyers, but the recent dip in prices and low interest rates have brought out lots of people who have been sitting on the sidelines for the past couple of years, because they previously couldn't afford the place they wanted. Now that they can, they are buying in record numbers. If more first time homebuyers are buying now than at any time in the past decade, how is it sustainable?

Once this wave is over, first time homebuyers will still always be there, but not at the numbers we are seeing now. And though Calgary is growing, the housing market is over-built right now and it will take time for the excess inventory to work it's way through.

[Winsor_Pilates]

Originally Posted by Potty

There are always first time buyers, but the recent dip in prices and low interest rates have brought out lots of people who have been sitting on the sidelines for the past couple of years, because they previously couldn't afford the place they wanted. Now that they can, they are buying in record numbers. If more first time homebuyers are buying now than at any time in the past decade, how is it sustainable?

Once this wave is over, first time homebuyers will still always be there, but not at the numbers we are seeing now. And though Calgary is growing, the housing market is over-built right now and it will take time for the excess inventory to work it's way through.

All true, but the important issue is how much of the current oversupply gets sucked up by this big wave.
If they reduce the supply of first-time type homes and condos enough, then a decrease in first-time buyers down the road may also be equalled by a decrease in that type of supply and be sustainable.

In Vancouver, we are definitely seeing this in the major DT and urban areas. New developments have almost completely stopped and the combo of low prices/low rates is eating up whatever over-supply there was. This should bring balance back to the market as supply/demand are finally somewhat equal.

Calgary will always be different because of it's land, but I do think the current buying frenzy should take at least a decent chunk of the over-supply away and bring back some stability.