Calgary Real Estate predictions?

[Winsor_Pilates]

Originally Posted by pepper24

The 4-11 times is comparing median income to home prices. Not mortgages. Historically, this stat has been 3-4 times. It’s a legit stat comparing apples to apples.

You're not understanding the stats you're putting in this thread, which you should if you're going to argue them.
It's not an apple to apple comparison at all, and I never said it was mortgages. That's irrelevant to my point anyway, being that the method of comparison is skewed because of deliberate inconsistency.

A simple example: Lets say home prices are traditionally between 200K-300K. Let's say median income is 100K for simplicity of numbers.
Then the CEO of Encana gets filthy rich and builds a house worth $10 Million.
The range in home values has just changed from 2-3X median income to 2-100X median income. WOW!

But is this dramatic change actually representative of the average person and their home price??

I provided you with this quote from the original document:
"It may however that wealthier Canadians who did capture much of the income growth over the past 30 years have been enabled by this additional income to speculate in real estate markets, thereby pushing up prices. The concentration of income with wealthier Canadians does not significantly alter the median income, but it would create an additional pool of capital that might be used for real estate speculation."

The same article claiming the bubble and giving the 4-11X stat in the fist place even admits in their fine print how the stat is skewed; yet you still won't admit it.

Ironic, after all the accusations you make about people in the industry misleading people, you're the one who won't admit when you've been throwing about misleading stats to try and back up your opinion.

[Winsor_Pilates]

Originally Posted by AFireInside

Of course Calgary is more affordable if you put $100,000 down on a $400,000 house....

The report is based on 25% down on a 25 year mortgage.

I agree with you, just was surprised that Calgary and Manitoba were better favorably to the rest of the country and surprised that Calgary ranked better than it's historic average (even with the difficult metric of 25% down)

It would be great to see stats showing the proportion of mortgages done with different amounts down compared the the past and see how much it actually has changed.

[pepper24]

Originally Posted by Winsor_Pilates

You're not understanding the stats you're putting in this thread, which you should if you're going to argue them.
It's not an apple to apple comparison at all, and I never said it was mortgages. That's irrelevant to my point anyway, being that the method of comparison is skewed because of deliberate inconsistency.

A simple example: Lets say home prices are traditionally between 200K-300K. Let's say median income is 100K for simplicity of numbers.
Then the CEO of Encana gets filthy rich and builds a house worth $10 Million.
The range in home values has just changed from 2-3X median income to 2-100X median income. WOW!

But is this dramatic change actually representative of the average person and their home price??

I provided you with this quote from the original document:
"It may however that wealthier Canadians who did capture much of the income growth over the past 30 years have been enabled by this additional income to speculate in real estate markets, thereby pushing up prices. The concentration of income with wealthier Canadians does not significantly alter the median income, but it would create an additional pool of capital that might be used for real estate speculation."

The same article claiming the bubble and giving the 4-11X stat in the fist place even admits in their fine print how the stat is skewed; yet you still won't admit it.

Ironic, after all the accusations you make about people in the industry misleading people, you're the one who won't admit when you've been throwing about misleading stats to try and back up your opinion.

By apples to apples, I meant that the stats for comparing the historical 3-4 times to the current 4-11 levels are using the same method to compare. I agree that the super rich could be a reason why the variance is so wide (4-11 times) compared to the small range of the historical 3-4 times. The stats might be skewed in terms of the variance but are still correct in showing that housing prices compared to income are more expensive than historicals.

Also, from the report........

The report says that on average, inflation-adjusted house prices in these cities have historically held stable at between $150,000 and $220,000 in today's dollars but current housing prices in all six major cities are now over $300,000 on average.

[DemolitionCat]

I don't have a problem with engineers or even CEOs of take your pick company making money. If there's one group of blood sucking parasites who are to blame for problems in real estate, its the real estate agents more than anyone else. I'm sure we'll get to hear their classic "blame the victim" talk over the next few months. If you ask me (which admittedly no one did) every one unemployed real estate agent is one step closer to better.

[AFireInside]

Originally Posted by DemolitionCat

I don't have a problem with engineers or even CEOs of take your pick company making money. If there's one group of blood sucking parasites who are to blame for problems in real estate, its the real estate agents more than anyone else. I'm sure we'll get to hear their classic "blame the victim" talk over the next few months. If you ask me (which admittedly no one did) every one unemployed real estate agent is one step closer to better.

Wow... A little over the top. I am by no means a fan of many of the real estate agents I have dealt with. A little too much brown nosing. I'm almost offended that they think we can't see through that.

That said, there are a lot of great real estate agents, who are honest hard working people. At the end of the day, it's up to the consumer to do their research.

If someone bought at the wrong time, they didn't do their research, and as far as I'm concerned, they wanted to buy, they just wanted someone to encourage that decision.

The other way around that is, if the real estate agent convinces someone not to buy and prices sky rocket then the potential buyer got screwed there.

Predicting the market is very difficult, if it were easy everyone would have a ton of money , or alternatively no money because everyone would know whats happening and when to buy

I backed out of an offer in 2008 because all my research pointed to a reduction in prices, and I've saved myself a bundle so far. I have my opinion on what the market is going to do and I'm going with that, and there are very few who will be able to convince me otherwise.

Also I have a bit of an advantage as I get to look at and analyze housing sales on MLX everyday for work.

[DemolitionCat]

Did a real estate agent ever say "no, don't buy now, it's overvalued"?

Did a real estate agent ever say "no, my commission is too high"?

Is there more work involved in selling a 900k house vs a 100k house? No, but to ask a real estate agent you'd think they'd be asked to fly a Sea King blindfolded.

[V]

Actually, yeah. My realtor has said it. Also realtors on this site have said it in this very thread. My realtor also gives me 2k off his standard commission. He eats it, as the buying realtor still gets their standard commission.

There are a lot of terrible realtors out there. But there are some good ones. You're painting the industry with a pretty broad brush.

[DemolitionCat]

So they're desperate enough to start sucking it up? That's good to hear, but what is the actual work worth even 2k in the first place? Hardly. Find a garbage man willing to download some forms and put up an ad on Craigslist and save yourself the additional $36k

[1stLand]

Originally Posted by DemolitionCat

So they're desperate enough to start sucking it up? That's good to hear, but what is the actual work worth even 2k in the first place? Hardly. Find a garbage man willing to download some forms and put up an ad on Craigslist and save yourself the additional $36k

It is really up to each individual Realtor how they want to structure their commission fees. They have the option of working for a brokerage that offers a lower commission fee structure, or working within their own brokerage rules and revising how they structure their commission fees to deviate from the standard 7%/1st hundred thousand, 3%/balance of sale price.

It was my own personal decision to work for a brokerage that offers a discount in the commission fees when I first started in this business. What happens on most deals I do is I end up taking a huge pay cut and leaving the cooperating agent with his full share of commission (on homes I list).

Some Realtors out there do like to criticize discount brokerages and I have heard many say "Discount Brokerages=Discount Quality" - Which couldnt be farther from the truth.

When I see or hear comments like that, I can kind of commiserate with Demolition Cat and see why he percieves the industry the way he does.

However, I digress, I dont think Demolition Cat truly realizes the work involved in listing a house, or the work involved being a buyer's agent.
It is alot harder than you think. Prior to entering the industry I thought it was easy too! However you never know until you are immersed in it and working around the clock and still not getting paid for your efforts!

If you think Commission Fees are too high, than vote with your wallet and use a Realtor that operates on a different commission fee model, or try and negotiate the commission fee with a Realtor or you have the option of using welist.com and doing everything yourself.

Or better yet, put your house for sale on kijiji and see how many flakes and tire kickers you attract.

The fact that most of the homes out there are still listed by Realtors (Full Commission brokerages) leads me to believe the vast majority of sellers out there still believe Realtors add value and are not over-paid for their efforts.

The bottom line is, all Realtors should not be lumped into one group. There are 5,500 Real Estate agents in the City of Calgary, theres bound to be some good ones in there

[chemgear]

Originally Posted by 1stLand

Some Realtors out there do like to criticize discount brokerages and I have heard many say "Discount Brokerages=Discount Quality" - Which couldnt be farther from the truth.

For sure, it's probably a sidebar to why the Competition Bureau is taking the Canadian Real Estate Association to the country's Competition Tribunal. But that's a whole other topic/can of worms.

[chemgear]

Originally Posted by fotze

Those surveys are dubious and you will also notice that they do not include profit sharing or bonuses. The people I know in the oilpatch, bonuses and options etc range from 50-100% of that salary.

The other problem with that assessment is that the person is progressing in their career, they are not just getting cost of living adjustments. For myself (who is not a rockstar employee) it is way higher than 3.5%. You can't just compare average to average.

Hmmm not overly familiar with the methodology or compilation of this survey. It seems like a relatively regular/detailed document for a specific profession that I don't see for many others. Seems like a reasonable place to start - or completely useless then?

[Shazam]

I dunno, all the 'geers I know are bitter middle aged guys that complain constantly how the guys on the field make more money than they do.

[Winsor_Pilates]

Originally Posted by pepper24

By apples to apples, I meant that the stats for comparing the historical 3-4 times to the current 4-11 levels are using the same method to compare. I agree that the super rich could be a reason why the variance is so wide (4-11 times) compared to the small range of the historical 3-4 times. The stats might be skewed in terms of the variance but are still correct in showing that housing "prices" compared to income are more expensive than historicals.

"price ranges" Which basically means squat due to the easy skewing.

Also, from the report........

The report says that on average, inflation-adjusted house prices in these cities have historically held stable at between $150,000 and $220,000 in today's dollars but current housing prices in all six major cities are now over $300,000 on average.

Now we're getting somewhere relevant. Obviously prices are higher now than historical averages, that's not newsworthy.

What should be compared is the historical ratio of median income vs median home prices and current ratio of the same. This would eliminate the skewing caused by the super expensive homes of the super wealthy.

I don't doubt that the ratio will be less affordable now than historically, but it would be a lot closer than the way that article tried to twist it by throwing in the high number 11. Maybe something like 3X historical, and 4-5X current.

Likely too close for them to strongly use it to back up their "bubble" angle, which is why they went with the wrong comparison in the first place.

[The Yen Man]

Well, to put current house prices into perspective (and this is not based on any data collected, just my dad's experience). My dad was able to buy a house back in the late 70's (in Medicine Hat mind you) for $20K. He said after taxes, he still made around $700 a month as a cook at a hotel restaurant. If the price ratio held true, with the average starter home being $300K, it's too bad being a cook nowadays couldn't net you a $10.5K after tax pay cheque every month.

[Shazam]

Yeah, my PILs bought their house in Canyon Meadows for $30K.

[bizaro86]

Originally Posted by Shazam

I dunno, all the 'geers I know are bitter middle aged guys that complain constantly how the guys on the field make more money than they do.

Maybe I'm just not old enough yet (I'm certainly well short of middle-aged), but I'm not bitter about the field consultants. Sure, it seems unfair on first blush that someone with a grade 10 education makes 3X more than me with an engineering degree. But then I remember that those guys have 10+ years working on a service rig or something, including those -40 degree days, and I figure life has trade offs.

[troutman]

We certainly notice more closings for October than August and September.

[newts]

Originally Posted by troutman

We certainly notice more closings for October than August and September.

Creb just sent out Sept. stats. Sales for single family up 10% vs. August, but still down vs. prior year. This would likely coincide with your increased closings for October. First uptick in sales since April.

[cmyden]

Originally Posted by newts

Creb just sent out Sept. stats. Sales for single family up 10% vs. August, but still down vs. prior year. This would likely coincide with your increased closings for October. First uptick in sales since April.

Here's the full month end stats from Mike's site...

http://www.findcalgary.ca/listings?p...=127&pageId=19

Single Family Homes





The uptick in September sales is pretty notable, because as a general rule, September usually has less sales than the summer months.


And for Condos...





Overall, kind of a mixed bag for the bears and bulls.


Bob Truman has a stat that he calls the 'Crash/Confidence Index'. Basically it compares the ratio of Sales to New Listings versus the historic average over the past 9 years...



I haven't seen any evidence that it can actually 'predict' price declines or increases, but it's kind of a nice stat, because it takes seasonality into account, ie only comparing September sales to September sales.

And it gives a good idea of how things are looking compared to long term averages. You can see from this stat that things certainly don't look *great* for the Calgary market at the moment, but they also don't look as bad as the spring and early summer.

cM

[pepper24]

In a development that could drastically change the way Canadians buy and sell their homes, the real estate industry has reached a landmark agreement with federal competition authorities.

The legally binding deal will allow for home sellers to pay for only those services they want from their real estate agents. Previously, under the rules established by the Canadian Real Estate Association (CREA), consumers had to opt for an entire slate of services, a practice the Competition Bureau deemed anticompetitive.

Read more: http://www.financialpost.com/news/La...#ixzz119kek1cC

I think this is good news for everyone including realtors. For too long there has been an unfair monopoly in the real estate industry. Other industries have adapted and thrived like brokerage houses by adding a discount, self-service component while still maintaining a full-service component. It'll reduce the amount of agents meaning the good agents survive, the bad apples are eliminated. Realtors have a gotten a bad rap (a lot of it legit) due to high fees, no alternatives and some bad dishonest realtors. Competition and alternatives will change these views and allow the consumer the option of having more money in his pocket.