Calgary Real Estate predictions?

[macker]

Originally Posted by Wookie

I wasn't thinking rates in the early 80's, even 8% would cause me to be paying 10k more a year to my mortgage. My payments would increase from their current amounts anywhere from 38% to 58% depending on my amortization.

I don't think we're heading for a huge tumble, nor do I think we're heading for 8.0% necessarily, but I do think a lot of people are buying houses because they came down "a little" and rates are down "a lot."

Now an inflationary time is a great time to own hard assets, but I'm not sure if real estate is one of them as it's mostly financed by large amounts of debt which is largely dependant on interest rates. I can't recall if I'm completely wrong on this, so jump in if you know better I'm just trying to think my way through it.

Yes cash is the worst place to be during times of inflation, but is residential real estate much better? Didn't the 80's housing bust happen do to inflation which made for sky high interest rates?

Moreso Commercial real estate and farm land but that is taking things way OT...If you listen to a guy like Jim Rogers he is always pounding the table about this and thinks that we should all be buying farmland in Canada and Brazil etc. There might be a bubble in real estate in Calgary in the future but I can't see it happening in the next 1-3 years.

[AFireInside]

Originally Posted by macker

Moreso Commercial real estate and farm land but that is taking things way OT...If you listen to a guy like Jim Rogers he is always pounding the table about this and thinks that we should all be buying farmland in Canada and Brazil etc. There might be a bubble in real estate in Calgary in the future but I can't see it happening in the next 1-3 years.

Prices will drop when interest rates increase, but I don't think it will be a major drop. I've been saying all along that this winter would tell the tale, unfortunately I started saying that before the interest rates were lowered. Regardless looks fairly decent in Calgary.

There will be a number of people who will be in trouble when interest rates rise however. I believe the historical average for interest rates is 8% or so. I would not be surprised to see interest back at 7% within a couple years, that could cause MAJOR problems for many owners.

[Incinerator]

Originally Posted by Winsor_Pilates

For the mortgage experts here, any recommendations to this situation?
I have a place ready at the beginning of 2012 and can lock in either:
3yr @ 4.5 (until 2015)
5yr @ 5.5 (until 2017)

Which one I pick will depend on what I think 2015-2017 might look like for interest rates. Any suggestions?

I'd take the 3 yr but that's just me, I would bet the rate would be around 5~ish by the time 2012 rolls around and probably higher by 2015-17. But then again no expert in this world can have a crystal ball that tells you what the magical rate is that far out.

[Incinerator]

Originally Posted by fotze

What is the interest rate of those helocs lately. Are there any fees on those.

Prime + 1 is common right now (3.25%), not sure what you mean by fees. Send Mike Oxlong a PM I'm sure he can give you a better answer.

[Incinerator]

Originally Posted by fotze

I heard there was a monthly fee of $35 or something.

Never heard of that before, I have one with TD, minimum payments are interest only every month as is the same with all HELOCs

[Bill Bumface]

Originally Posted by AFireInside

There will be a number of people who will be in trouble when interest rates rise however. I believe the historical average for interest rates is 8% or so. I would not be surprised to see interest back at 7% within a couple years, that could cause MAJOR problems for many owners.

I can't see interest hitting 7% within a couple years unless things are really good again.

Unless people are making a lot more money in 3-5 years when all of these ultra low fixed mortgages come up, there is no way the BoC will raise prime high enough that were at risk for another huge round of foreclosures.

[Berger_4_]

Originally Posted by fotze

For interest sake, the average house sale price in Calgary since April 2006.

Holy christ, I can't believe the average for houses in this city was just over five hundred thousand bucks in 07. That's unbelievable.

[AFireInside]

Originally Posted by hulkrogan

I can't see interest hitting 7% within a couple years unless things are really good again.

Unless people are making a lot more money in 3-5 years when all of these ultra low fixed mortgages come up, there is no way the BoC will raise prime high enough that were at risk for another huge round of foreclosures.

I agree for the most part, the only thing that bugs me is that I also can't see the BoC keeping the interest extremely low for several years either. Odds are most people will be making about the same money 5 years from now and they raise it at some point, foreclosures or not.

It will be interesting to see what happens.

[hmmhmmcamo]

Originally Posted by Winsor_Pilates

I don't think that's fair. Most people in Vancouver attribute very little of the rising real estate sales / prices to the Olympics. The main factors have been interest rates and a slow down in new construction reducing supply. I don't think even 1% of my buyers in the last year were heavily motivated by the Olympics.

Most of the developers I work with aren't banking on the Olympics either. The industry will pretty much shut down during it, and no one is expecting a huge influx of Olympic tourist spending on Real Estate. People seem to be quite cautious of banking on the Olympics and I think that's pretty smart.

Both Bob Rennie and the City of Vancouver disagree with you:



City Hall is banking on the real estate market staying hot through the Olympics and rich tourists wanting to buy in.

Note the slogan "Own the ultimate 2010 souvenir" plastered all over the village .

[Wookie]

Well we're almost into spring 2010. Surprised this thread hasn't been updated since December.

Thoughts?

Seems a large inventory growing. Not sure how my paste will work.

Calgary Metro Area Statistics Last Updated: 2010/03/17 12:01am MNT
Active ListingsNew Listings
Last 24 HoursSold
Last 30 DaysAvg Sale Price
Last 30 DaysMedian Sale Price
Last 30 DaysSingle Family3,7101151,181$462,010$416,000Condominium2,00 150542$291,186$275,000

Statistics provided by the Calgary Real Estate Board® How are these statistics calculated?

Wrote a bunch about monthly sales and growing inventory etc. but lost it when I hit back.

Oh well, where do people think things are going? I'm thinking down a bit. As interest rates go up (it might happen pretty slowly, or not) things will slow. Lots of people bought in the last 8 months as things were cheaper than before and rates were great. I think that was pent up demand which will now fade and the spring will enthuse people to list what they overpaid for. . . We're sitting with 2 overpaid townhouses haha, so I'd prefer up. But don't see it happening.

[Canada 02]

http://www.househunting.ca/buying-ho...6-402cf3aab1ab

Sales of existing homes declined for a second straight month, with a 1.5 per cent month-over-month drop in February on a seasonally adjusted basis. This followed a 3.8 per cent decrease recorded in January .....

Meanwhile, the number of new listings - an indication that homeowners are looking to capitalize on demand - climbed 2.4 per cent, marking the fifth straight month that housing supply grew. The amount of housing inventory in February stood at 5.2 months, well below where it was a year ago, at 8.8 months, but on par with 2008 levels.

[mykalberta]

I am hoping the rates increase in June by at least 1/4 % pt.

If it does that reduces the break fee I need to pay on my mortgage by almost 7K.

[Potty]

I'm considering buying a house in Kelowna in the next 1-3 years, so I have a spreadsheet going using stats off the Okanagan Real Estate Board. Mostly tracking Sales/New Listings, as I feel it gives the best snapshot of the market for the specific period you're looking at. Since 1987 when the data starts, it also gives a fairly good indication of change in price of the average house as seen on the chart. I see no reason to buy a place in Kelowna right now and am happy to wait until I see the fundamentals improve for an extended period.

I would recommend anyone who is looking at investing in real estate in a certain area do something like this. It's easy and the information is readily available.

[Jonrox]

Originally Posted by Potty

I'm considering buying a house in Kelowna in the next 1-3 years, so I have a spreadsheet going using stats off the Okanagan Real Estate Board. Mostly tracking Sales/New Listings, as I feel it gives the best snapshot of the market for the specific period you're looking at. Since 1987 when the data starts, it also gives a fairly good indication of change in price of the average house as seen on the chart. I see no reason to buy a place in Kelowna right now and am happy to wait until I see the fundamentals improve for an extended period.

I would recommend anyone who is looking at investing in real estate in a certain area do something like this. It's easy and the information is readily available.

Why would you not rather buy while prices are low in Kelowna? Why wait for the market to turn around for a significant amount of time and buy at a higher price? Kelowna is saturated with supply right now and there are good deals to be had right now. This is definitely a buyers market - if your price range allows it, there's a lot of lakefront homes for sale too.

Also, the impact of the HST is going to be interesting.

[Sylvanfan]

The Okanangan is a weird market. The fundamentals are brutal as pretty much no working person here can afford their house. But due to the high number of retiree's it drives prices up. I know I've been looking for a place in the South and I balk at the piece of crap that you have to pay 350 grand for. Pretty much any place under 400 needs 100 grand worth of building materials to bring it up to date. It's sad.

The HST is really only going to affect new houses as on an existing house you'll only pay it on the realtor commissions from what I understand. But BC is expensive with that land transfer tax.

[fundmark19]

From house hunting for a co-worker single family starter homes that are priced well are being snapped up only being on the market for a couple days. So if you are looking to get into a starter home before rates rise which seems to be the trend you need to act quick when you find a listing you like.

[Potty]

Originally Posted by Jonrox

Why would you not rather buy while prices are low in Kelowna? Why wait for the market to turn around for a significant amount of time and buy at a higher price? Kelowna is saturated with supply right now and there are good deals to be had right now. This is definitely a buyers market - if your price range allows it, there's a lot of lakefront homes for sale too.

Also, the impact of the HST is going to be interesting.

Prices are lower than they have been, but until the market shows any signs whatsoever of improving, I'm going to sit and wait to see if they go any lower.

I track Sales/New Listings monthly and with the large inventory out there this thing isn't going to turn around overnight, so I am not the least bit worried about missing out on low prices.

[photon]

Yeah that seems to be the story in Chestermere too, the stuff at the lower end of the market goes very fast, but stuff higher up just sits there forever.

I wonder how much hidden inventory is still out there too.

[Claeren]

People are stretching to buy starter homes at ultra low interest rates, it only gets worse when they raise those interest rates just a little.

Putting it another way, there is a reason they are holding rates so low for so long while pumping Billions (and in the US Trillions) into the economy. The market is not remotely balanced and massive deflation takes hold if they don't.

Something has to give eventually and I am not sure this is the market bottom.





Claeren.

[fundmark19]

I am sure this is the bottom!

Since the us promised to keep its rates low again can Canada really afford to raise ours? By raising our rates with the US not raising theirs our Dollar value will rise which in turn makes our sales of goods to the US lower making our economy struggle again? Does anyone have any more insight on this? Seems like Canada is stuck between a rock and a hard place so to speak