First Time Home Buyer - Calgary

[mykalberta]

So at Christmas I decided that I must stop the rental game and go and buy a place. To my dismay there are no places within walking distance to downtown under 200K (I know - Calgary big fating surprise) that I would live in (2 bedroom 700 sq ft+) etc.

Financial Picture is as follows (generic but the general idea)

Current rental payments 850/month + util(s) etc.
18K in RRSP
12K Cash
200K Pre-Approved Mortgage (10y 5.15% expires May 01) (parents co-sign given my 18K in student loan debt - 3.5 years left - monthly payments 280/month)

I have a pre-approved mortgage and have an agent that I think knows what she is doing (not looking to change). Does anyone have any suggestions on where a good place in Calgary might be to look - potential upside etc.

I have come to the realization that my 20 minute walk to work in the mornings are done unless I win the lottery. I would always prefer to live along the river - I could easily bike to work on the paths as far away as Westgate park. I have looked in the NE and from what I have seen and others have told me that is similar to Mill Woods in Edmonton and it doesnt look like a good fit for me (with the exception of the only N side Costco/Coco Brooks/Mem Express).

I have been searching NW and SW along the C Train route but the prices seem a little crazy unless you get to the Rocky View area or similar area in the SW.

Any suggestions would be greatly appreciated.

Thanks

MYK

[Eagle Eye]

Since you are a first time buyer I would almost recomend that you continue renting until the market stabilizes, there are such few houses out there and so many buyers that houses are overpriced.

For example we just built a new 2200 sqft house and paid $320,000 for it, we sold our first house (1500 sqft built 4 years ago) for $230,00 last April. Well our old house was sold again and it went for $349,000.

There is an article in the globe and mail talking about the fact that houses are so over priced and in such high demand that people are over paying for condemned (grow op) houses.

I would continue to rent and save up if I were you


http://www.theglobeandmail.com/servl.../National/home

[droopydrew19]

There was a story on the news the other night saying that for the first time in history in the Calgary market it is now cheaper to build a new home than buy an equivalent used one. You might want to check out some of the home builders in the area.

I understand the stresses you are under. We just bought our first home and went throught the frustration of houses going on the market and being sold in hours or even minutes. It is a dog eat dog market out there right now. So much so that we decided not to pay the inflated Calgary market prices and bought in Airdrie.

[Rhettzky]

Well I just purchased a Condo in Victoria Park directly beside the Chocolate Condo's going up on 1st Street SW and it was pretty cheap. Bought it ten months ago for 115k and it's city appraised value came up to 125k after two months of living there. Recently suites in my building have sold for 130k, 140k and two months ago at 165k. The suite is just over 700sq/ft and is a two bedroom. The combination of Calgary's real estate market and the development of the east village is driving prices up at an astronomical rate. So I'd recommend that if you want something fairly decent in price, close to downtown and has a good upside, I'd look at east village.

Drawbacks include bums and hookers but with all the new high rise condo's going up (Chocolate, Sasso) we've noticed significant changes. Seems like the police finally have to take notice of the problems when they put in 300k condo's. There are also plans for five more high rise condo's in that area over the next five years.

One last benefit of this area is the Stampede development. If anyone has recently driven through the old vic park slums just north of the saddledome they will have noticed that slowly the houses are getting torn down or bought out by the city. Once this project to expand the Stampede grounds is completed to the north than I think this area is going to boom.

[ken0042]

Right now it is a crap shoot. On one hand as EE pointed out houses are ridiculously priced. However who is to say that they will go down any time in the next 5 years? Even if they stablize, the price may just continue going up slowly rather than balooning.

A good link about buying vs. renting:
http://moneycentral.msn.com/content/...ide/P37627.asp

One of the best ways to make money is to buy a house in a developing area; and have it built. After a few years you can flip it. If living downtown is your goal; that's fine. But map the path you want to take. Are you willing to live in the deep south for 4 years first?

Myself I bought a "starter" type of house 15 months ago for $190K, and now similar houses are going for $270K. But the next upgrade type of house was about 40K more than what I paid back then, and is still around 45K more than what I could get for selling mine.

The other option is a room mate. To get the type of place you want you may have to have somebody split some of the costs with you.

[BlackEleven]

You may know this already, but you can take out that 18K in your RRSP and put it towads the purchase of your first home with no penalty. The government allows you to take out up to 20K (I believe) and put that towards the purchase of your first home as part of their Home Buyers Plan.

[Eagle Eye]

Why I agree that there is no way in hell that housing prices will drop, maybe they will have a more gradual increase. What I would recomend waiting for is a little more supply so that you don't get involved in a bidding war for a house and end up paying $50,000 more than it is worth just cause you needed to get in.

The problem now with builders is that some of them a putting a cap on the amount of houses they will build (they can't keep up) and some are just not building right now as they can not forecast the actual price to build a house and end up losng money (dont know the details just heard a rumour)

[CalgaryCowboy]

I have had many friends in your situation have said DON"T RENT WHILE WAITING!!!. Buy what ever you can even if it not what you want. If what you want is $40K more than you can afford in 5 years it is +70k. Buy buying you are in the market. If you want that downtown property and you buy a house now your place place will appreciate and you only have to worry about the gap between where you are and where you want to be. Many freinds were wainting to buy there dream house but never got there because it just kept going up. The ones that bought something as soon as they could aford it are now moving up to their dream houses.

[Eagle Eye]

Originally Posted by CalgaryCowboy

I have had many friends in your situation have said DON"T RENT WHILE WAITING!!!. Buy what ever you can even if it not what you want. If what you want is $40K more than you can afford in 5 years it is +70k. Buy buying you are in the market. If you want that downtown property and you buy a house now your place place will appreciate and you only have to worry about the gap between where you are and where you want to be. Many freinds were wainting to buy there dream house but never got there because it just kept going up. The ones that bought something as soon as they could aford it are now moving up to their dream houses.

That only works if you can afford it!

I agree that if he can find a place that he can afford buy it, but he says that he has an approval for a $200,000 mortgage. He has $30000 as a downpayment ($18k in RRSP and $12 K in cash). It is very tough to find a place for $230,000 (espically close to downtown)

Maybe look at some condos/townhouses in the burbs close to LRT so that you can get in the market

[Cube Inmate]

Well, you clearly won't get anything big in this market for under 200K, but here's the MLS number of an apartment condo in the Renfrew area...it's within a short bike ride of downtown.... I should say that the listing is for about $175,000, and the place is 775 sq feet 2 bedroom. Cozy!

C3203654

[Flames_Gimp]

i'm a first time home owner, the area i'm in is quite a bit below the average as far as home value in this city, it's also supposed to catch up in the next 5 years. i'm in south end of Dover. i've got a lot thats about 50'x30'. all for under 170k.

[CalgaryCowboy]

Originally Posted by Eagle Eye

That only works if you can afford it!

I agree that if he can find a place that he can afford buy it, but he says that he has an approval for a $200,000 mortgage. He has $30000 as a downpayment ($18k in RRSP and $12 K in cash). It is very tough to find a place for $230,000 (espically close to downtown)

Maybe look at some condos/townhouses in the burbs close to LRT so that you can get in the market

I meant buy something you can afford even if it not what you really want. There are still homes in the new market you can get built for around $200,000 depending on the area. I live in Cranston (aross from McKenzie Lake) and there are starter homes in that price range and duplexs for less. This is a good area with great upside. I was involved in the new home industry at the time and know the quality here is above the standard starter home. Buy what you can afford and then add a garage, fence, grass as you can and watch the price go up.

[Engine09]

I am so discouraged right now, this city is gettign too expensive. Not sure when I'll be able to buy anything. Student Loans first, then decent wheels, and I'll need a raise at work.

How about some advice on being content with renting?

[troutman]

Maybe Sasso or Vetro?

http://www.sassolife.com/

If you need help on the legal side PM me.

[Flames_Gimp]

what about assuming a mortgage? thats what I did.

[ken0042]

I also assumed my mortgage. A couple of problems for MYK:

-The RRSP money can't be used to assume a mortgage without penalty.
- The assumable mortgage goes out the window in a market like this. Let's assume (sorry for the pun) that I had bought my house the normal way with 5% down. I would have had a mortgage of $180K. My house is now worth $270K- so lets say $250K. With nothing going towards my principal for the last year you'd be putting down $70K to assume my mortgage.

[Flames_Gimp]

Originally Posted by ken0042

I also assumed my mortgage. A couple of problems for MYK:

-The RRSP money can't be used to assume a mortgage without penalty.
- The assumable mortgage goes out the window in a market like this. Let's assume (sorry for the pun) that I had bought my house the normal way with 5% down. I would have had a mortgage of $180K. My house is now worth $270K- so lets say $250K. With nothing going towards my principal for the last year you'd be putting down $70K to assume my mortgage.

if you already qualify for a mortgage there is no point to assume. To assume it's ussually a very high CTM (cash to mortgage) as it's for more desperate peoople who can't qualify.

I hhad to save up alot of $ as the downpayment was the difference between the amount left on the mortgage and the value of the house.

[arsenal]

Originally Posted by troutman

Maybe Sasso or Vetro?

http://www.sassolife.com/

If you need help on the legal side PM me.

Sasso and Vetro are selling at $225+ for 600 to 650 sq ft one bedroom. They are pretty much pricing themselves out of the market. I don't know many people that are willing to shell out that kind of cash for 1 bedroom.

I just bought my condo on 14th ave , around 675 sqft, 1 bedroom. Awesome location, close to everything, and I am right downtown. It is an older building, but one sold in the same building for $161,000.

My friend just sold his 2 bedroom condo in killarny for around $200K. It was around 770 sq ft, but it felt really cramped. 2 bedrooms in that space is really tiny.

[photon]

Yeah you might have a better time in the SE in Dover or Forest Lawn... Forest Lawn prices are starting to move up but still might be a bit lower.

But as has been said the market is so crazy right now. There's 1100 properties on the market and 5000 agents trying to sell those. Building might put you quite a ways out but you could probably get a better value for your $$ (not that I think new home builds are really that valuable nowadays, but that's a different issue).

You might have to move further out for now until you can do a move back in.

And I haven't seen much that indicates the markets going to drop. Head offices moving here, oil staying stable where it is, tenancy rates starting to really drop (which means rents are going up), builders building as fast as they can (and in some cases stopping taking all orders)... Interest rates appear like they'll stay quite low.

Until Alberta becomes unattractive and people start leaving (or at the very least stop moving here as fast) the prices will continue up. Maybe not $10,000 / month, but still up.

[GrrlGoalie33]

I bought in the NE last in 2004 because of the whole renting thing. I looked at a lot of houses up there before I finally bought.

Some tips:

If you are looking at a home up there, look at the houses around it, are they reasonably taken care of from the outside? If the answer is yes, keep looking at the house. If your neighbors take good care of their yards, there's generally gonna be less crap going on.

Yards are HUGE. I have 5500 sq/ft of property with a house that is 1200sq/ft two story (that means the footprint is only 600sq/ft)

Lots of schools. Get in now, buy something you can afford, and when the market cools down in a couple of years, you'll still be able to turn a profit.

I had a lot of misgivings about moving up to that area (Falconridge), but love it now that I'm there.