Calgary Real Estate predictions?

[DionPlett]

Originally Posted by metal_geek

Don't know how common it is but I did just that... Only I had to move to a small community to do it...

Basically sold everything, paid everything, paid cash for a small house in a small community. The only expenses I have now are the utility bills, insurance kinda stuff. It allowed me to start my own business and not have to worry about how I'm gonna keep making my payments for things. I have to make very little to come out ahead now that I'm not working for my stuff... I'm making roughly 15% of the income yearly I was making in calgary and at the end of the day I come out with more money in the bank then I ever did in calgary..

I have infinatly less stress, and my desire for things has basically disappeared. Living with very little stress free is worth way more then living with everything you want and full of stress...

I'm never owing a cent to anyone again, If I can't pay cash for it I don't need/want it

Thanks. That's what I've thought about as well and I know that if I decide to sell my house here now I would more than likely move someplace else. I haven't really thought about that to much though. Even driving distance within Calgary, real estate isn't really a whole lot more cheaper. I'm not really in a bad situation but I can see how it potentially can get a lot worse rather quickly.

[chemgear]

Originally Posted by username

I just don't see where the debt - assets = 40K can come from? I don't.

So am I missing the boat? This $40k debt ($45ish if you ratio it up to adults only - no kids) is non-asset based debt, right? So no mortgages, no outstanding financing on cars, etc.

Does that just mean like credit cards, student loans, payday loans, line of credits (not backed by a home.)

[V]

I have 2 unsecured LOCs totalling 60k, fully maxed. About 5k in student loans. No credit card debt, though. I guess I've got the average beat.

[Shazam]

WTF?

Gee, I've a got a couple grand on the Visa from developing the basement. And car loans.

[metal_geek]

Originally Posted by DionPlett

Thanks. That's what I've thought about as well and I know that if I decide to sell my house here now I would more than likely move someplace else. I haven't really thought about that to much though. Even driving distance within Calgary, real estate isn't really a whole lot more cheaper. I'm not really in a bad situation but I can see how it potentially can get a lot worse rather quickly.

Like you I wansn't in a bad situation either, but there were too many variables and things out of my own control. In order to regain control I had to no longer owe any money, and no longer work for anyone else. Now I never have to worry about losing my job, or being able to pay my bills. I never have to worry about being to work on time or leaving early.. Someone asked me what it was like to "give up" everything and do what I did.. I told um this...

"You know that feeling you get at 9:00 on a sunday evening when you start thinking about going back to work for the next week? Every day feels like Friday at 4:55 for me..."

I have no idea what day of the week it is most days. I almost never know what day of the month it is. long weekends don't matter anymore and I have cheques from work I did 3 weeks ago sitting on my desk as I type, i'll put them in the bank sooner or later.. none of thoes things I could say before. "Property values" could implode tomorrow and it would be something I just read about in the paper and not mean anything to me...

[macker]

Originally Posted by metal_geek

Like you I wansn't in a bad situation either, but there were too many variables and things out of my own control. In order to regain control I had to no longer owe any money, and no longer work for anyone else. Now I never have to worry about losing my job, or being able to pay my bills. I never have to worry about being to work on time or leaving early.. Someone asked me what it was like to "give up" everything and do what I did.. I told um this...

"You know that feeling you get at 9:00 on a sunday evening when you start thinking about going back to work for the next week? Every day feels like Friday at 4:55 for me..."

I have no idea what day of the week it is most days. I almost never know what day of the month it is. long weekends don't matter anymore and I have cheques from work I did 3 weeks ago sitting on my desk as I type, i'll put them in the bank sooner or later.. none of thoes things I could say before. "Property values" could implode tomorrow and it would be something I just read about in the paper and not mean anything to me...

As a society we spend more and more time as a human doing and less and less as a human being. Sounds like you have found a simpler way to be and people who are busy being busy are usually not happy. The Joneses are bagged tired....Forget about your house of cards

[Sylvanfan]

Originally Posted by metal_geek

Like you I wansn't in a bad situation either, but there were too many variables and things out of my own control. In order to regain control I had to no longer owe any money, and no longer work for anyone else. Now I never have to worry about losing my job, or being able to pay my bills. I never have to worry about being to work on time or leaving early.. Someone asked me what it was like to "give up" everything and do what I did.. I told um this...

"You know that feeling you get at 9:00 on a sunday evening when you start thinking about going back to work for the next week? Every day feels like Friday at 4:55 for me..."

I have no idea what day of the week it is most days. I almost never know what day of the month it is. long weekends don't matter anymore and I have cheques from work I did 3 weeks ago sitting on my desk as I type, i'll put them in the bank sooner or later.. none of thoes things I could say before. "Property values" could implode tomorrow and it would be something I just read about in the paper and not mean anything to me...

How much did you end up making off the proceeds of your house sale though, and how far did you have to move?

It sounds like a situation where you may have sold off at the peak of the Calgary market which did put a substantial amount of cash in your pocket.

For example if you can sell off your house in Calgary and pay off 40 grand in debts and be left without any assets is it still worth it? Whereas if you were taking in 200 grand, than paying off 40 in debt and having 160 left over to move to Regina as an example might be to someone.

When I read a post like this I think it's worth pointing out the timing and more specifics because what worked 3 years ago....doesn't neccessarily apply to today.

[metal_geek]

Originally Posted by Sylvanfan

How much did you end up making off the proceeds of your house sale though, and how far did you have to move?

It sounds like a situation where you may have sold off at the peak of the Calgary market which did put a substantial amount of cash in your pocket.

For example if you can sell off your house in Calgary and pay off 40 grand in debts and be left without any assets is it still worth it? Whereas if you were taking in 200 grand, than paying off 40 in debt and having 160 left over to move to Regina as an example might be to someone.

When I read a post like this I think it's worth pointing out the timing and more specifics because what worked 3 years ago....doesn't neccessarily apply to today.

For sure... I did great in Calgary. I loved Calgary actually.. I was there for 13 years, had the "Dream job" and stuff still didn't feel right.. Semi mid life crisis I spose only I was 34 when I did it.. That was 2 years ago. When I sold it was October of the "crash" so I didn't excatly sell at the peak but I could see that if I sold it when I did, I would still be well ahead. The convincing point for me was knowing that I could lose as much value in my house over the next year as I would make in income so to mean it seemed like I could sell take a year off and not be any further behind.

I had no idea at the time how good it felt not owing anyone or not working for someone felt.. Now that I do, I'm NEVER working for or owing anyone again....

EDIT...
I had to move to a small town on the other end of the country to find a house big enough for our family I could pay cash for...

[Sylvanfan]

Originally Posted by metal_geek

EDIT...
I had to move to a small town on the other end of the country to find a house big enough for our family I could pay cash for...

Now my next question would be, were you originally from that part of the country, do you have family there?

Certainly there were a few people who were originally from the Maritimes for example or even Saskatchewan who came to Alberta and did very well and were able to go back home and enjoy a better lifestyle. Well earned too for them as those people had the guts to leave home in hopes of something better in the first place and managed to do so.

For myself personally I left Alberta to come back to the even more outrageously expensive BC where I'm originally from. But for me, I have family here, and the fact that my son gets to see his grand parents most days carries a certain value. I don't know if I could move out to Nova Scotia though as I wouldn't know anyone and would now be further from important family members than I was in Alberta. But again, thats me, someone else may be different.

[Old Yeller]

Originally Posted by Pastiche

I subscribe to a litany of personal finance blogs and the golden rule of wealth accumulation is spend less than you earn. If you can do that consistently you will come out ahead later in life.

That is such common sense that it shouldn't even be a "golden rule". To me it equates to "if you would like to continue living you must continue to breathe".

I think it speaks volumes about society that people don't seem to "get" that rule.

People in this country are going to be working until 85 just because of this.

Edit: 'Basic Finance 101' should be taught in school starting in Grade 5 or 6.

[metal_geek]

My family is still a plane ride away same as in alberta, but there are some extended family close by. That was the reason I knew for a house that would fit the bill. My wife is from sask. so the move for her was huge as well.. I'm convinced now that location doesn't matter so much as what you do in that location. I don't know about whats gonna happen in the future but I know the whole world, countries and individuals seem to be struggling with debit. All I know is that even with very little "fancy stuff" no debt makes life feel ALOT better...

[username]

Originally Posted by chemgear

So am I missing the boat? This $40k debt ($45ish if you ratio it up to adults only - no kids) is non-asset based debt, right? So no mortgages, no outstanding financing on cars, etc.

Does that just mean like credit cards, student loans, payday loans, line of credits (not backed by a home.)

I guess so?? That's what I mean, I just don't see how that's possible. How can someone run up that kind of debt and have nothing left at the end of the day?

[Pastiche]

Originally Posted by username

I guess so?? That's what I mean, I just don't see how that's possible. How can someone run up that kind of debt and have nothing left at the end of the day?

You really have to ask that?

Addictions is the first that comes to mind. Gambling, drugs, collecting anything will run up a mountain of debt if you have access to credit.

Financial illiteracy is another. For many people the basic ideas of interest and repayment is a stretch.

[Sylvanfan]

Originally Posted by Pastiche

You really have to ask that?

Addictions is the first that comes to mind. Gambling, drugs, collecting anything will run up a mountain of debt if you have access to credit.

Financial illiteracy is another. For many people the basic ideas of interest and repayment is a stretch.

I do think student loans as Dan02 mentioned earlier would be a factor. I do know a few people who managed to ring up 20 to 30 grand in student loans just to go to school for two years.

Again though...there is no shortage of people who didn't neccessarily handle that money so well. Money lent to people 18-23 not being spent so well is not really a surprise.

In turn college/university grads who may move to a place like Calgary may in fact be carrying a big chunk of debt and that certainly will make it tough to acquire real estate with tighter lending regulations.

[username]

Originally Posted by Pastiche

You really have to ask that?

Addictions is the first that comes to mind. Gambling, drugs, collecting anything will run up a mountain of debt if you have access to credit.

Financial illiteracy is another. For many people the basic ideas of interest and repayment is a stretch.

There's no question I need to ask. How many people really have addictions that cause them to run up debt? Certainly not the "average" Canadian.

Similiarly with student loans, the "average" Canadian doesn't even have one. Maybe the age bracket of 20 - 27 or so might have them but that's about it. Hardly a sample size indicitive of your average Canadian.

I call BS on this article or at least the research methods used to come up with that 40K.

[AFireInside]

Originally Posted by username

There's no question I need to ask. How many people really have addictions that cause them to run up debt? Certainly not the "average" Canadian.

Similiarly with student loans, the "average" Canadian doesn't even have one. Maybe the age bracket of 20 - 27 or so might have them but that's about it. Hardly a sample size indicitive of your average Canadian.

I call BS on this article or at least the research methods used to come up with that 40K.

I'm fairly sure the average amount of student loans these days are in the neighbourhood of 30,000. That plus some credit card debt would put someone in the 40,000k range pretty quickly..

You also make the assumption that a 25 yr old fresh out of uni with 25,000 in student loans would be able to pay those off in several years. Well living in Calgary with rent costs, etc. Good luck. Most I know will be lucky to have them payed off within 10 years. So that means a lot who are in the 30-40 range have student debt of several thousand as well. Don't forget the federal government charges prime + 2% for their student loans.

I remember my first couple years of student loans, 2/3 were going to interest alone... The last year or so hasn't been so bad though!

The average Canadian having 40,000k of debt seems pretty close to me..

[chemgear]

Originally Posted by username

I call BS on this article or at least the research methods used to come up with that 40K.

Hmm the more I look into it, the more the number looks very possible. I wouldn't just discount the entire research if the results seem to show something initially unexpected.

Now this is something that I thought was ridiculous when I first read it:

http://news.bbc.co.uk/2/hi/8107039.stm

(Especially considering that I assume people would "under report" their own unsavory deeds in a voluntary survey - like being asked about downloading music in North America for example.)

[chemgear]

Interest rate forecasts from the various banks:

http://www.canadianmortgagetrends.co...rtgage_trends/

Estimates average ~ 3.0% increase in the span of 19 months. Or roughly 25-30% increase in monthly mortgages payments for the "average person."

It's okay though, housing prices cannot possibly go down.

[Wookie]

Originally Posted by chemgear

Interest rate forecasts from the various banks:

http://www.canadianmortgagetrends.co...rtgage_trends/

Estimates average ~ 3.0% increase in the span of 19 months. Or roughly 25-30% increase in monthly mortgages payments for the "average person."

It's okay though, housing prices cannot possibly go down.

On the fixed-rate side, bond yields are expected to rise 1.19% in the same timeframe, according to bank estimates. (Bond yields drive fixed mortgage rates). Based on a typical 120 basis point spread above yields, this suggests deep-discounted 5-year fixed rates could rise to around 5.36% by year-end 2011.

You're comparing the overnight rate to the bond yield, and then what? Assuming the average person has a floating mortgage?

So the year end 2011 5-year rate is expected to be 5.36%? OH NOSSEEE!! I bought my place and was paying 5.79% in 07. Managed to get down to 3.79% until 2015. I'm a little worried about 2015, but not about 5.36% in 2011. It's more than I'm paying now. But certainly nothing to get all worked up about and 2015 is too far out to call.

[chemgear]

Hehe, fairly irrelevant with people with (esp. fixed) mortgages already.

The effects from hikes and the bond yields should be interesting to see going forward for the people buying on a go forward basis. I would assume the prices they can handle/actually buy for will dictate the housing prices. Us poor peeps already paying for places aren't going to really affect it - unless we all try to sell at the same time.