03-19-2015, 12:09 PM
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#61
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In the Sin Bin
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I'm desperate to buy a place but I feel like this is going to get really bad in a few months when the reality that this isn't just a blip in oil prices sets in. Which it's looking more and more like it will be.
Like, bottom falling out bad.
Frustrating.
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03-19-2015, 12:17 PM
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#62
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Backup Goalie
Join Date: Dec 2013
Exp:
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supply is still low and tons of buyers are there but just waiting on the sidelines. If things turn around expect a violent spike to the upside as every buyer that was holding out piles in to not get priced out yet again. Things that will cause meaningful price drops are just not there. High rates, high supply, migration out of the city. You won't get significant price declines when the government is doing everything in it's power to prop up the housing market. It just won't happen. So if you see something you like, buy it or you'll probably regret it later when the prediction of lower prices and tons of listings don't end up materializing.
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03-19-2015, 12:28 PM
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#63
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In the Sin Bin
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I'm more concerned about 4 -12 months from now if Oil prices are still low and people start feeling the squeeze as companies are still not hiring and Alberta starts losing population.
At this point, that scenario is probably more likely than a magical, unsubstantiated bounce back in oil prices.
Either way I'm going to hold off on buying anything until something gives. Either oil prices and employment numbers bounce back or prices drop, cause this stalemate has "Bad Decisions" written all over it.
Now who wants to rent me a please with a no term lease? Anybody?
... Please?
Last edited by polak; 03-19-2015 at 12:50 PM.
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03-19-2015, 12:52 PM
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#64
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Backup Goalie
Join Date: Dec 2013
Exp:
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economic malaise doesn't equate to lower house prices. Sales will drop off a cliff, but I doubt our population will decline. Foreign immigration to Canada is at an all time high and less people are moving directly to Toronto. Calgary is one of the main markets of this immigration. This will continue to fuel the housing crunch.
I don't see lower house prices at least to a significant level. However I do see a stalled market. So I wouldn't advise anyone to buy now looking for an investment or quick flip. But if you're looking for a place to call home, I don't see how you could go wrong. Rents are still high so you're not saving money renting, and prices are showing no signs of coming down. The same house that sold last year is listed this year for at least what it sold for last year if not more. Most people that are having trouble selling now are delisting. So there is little downward pressure on prices.
Just because someone is laid off doesn't mean they have to sell their homes. Layoffs happen all the time even in good economic conditions. There is a big difference between someone that's laid off and someone that HAS to sell or foreclose.
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03-19-2015, 01:36 PM
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#65
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In the Sin Bin
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Yeah, I don't see Calgary being a top destination for foregin immigration if no one is hiring...
People being laid off now aren't being forced to foreclose but in 4-5 months when savings and severance starts to run out they just might.
Immediate term, there might not be downward pressure but if sub sixty dollar oil is here long term, like it might be, I'm sure I'd regret spending 250 Grand on a 2 bed 2 bath condo in the suburbs.
Either way, I think I'll hold off until something gives. Oil bounces back or prices fall.
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03-19-2015, 01:44 PM
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#66
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Backup Goalie
Join Date: Dec 2013
Exp:
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just remember if that if you wait until oil prices pick back up and hiring starts up again you'll be back where you started fighting with everyone for scraps at stupid high prices. So it goes both ways.
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03-19-2015, 06:38 PM
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#67
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Draft Pick
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Quote:
Originally Posted by lorenavedon
just remember if that if you wait until oil prices pick back up and hiring starts up again you'll be back where you started fighting with everyone for scraps at stupid high prices. So it goes both ways.
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That hardly happens in a day. It's a gradual growth, so easy to spot. And I have to agree with polak, this is a lousy time to buy, it's just the beginning of the downturn (what are we, 3-4 months in?) the layoffs are continuing, and the oil is still going down. The longer the low price of oil lasts, the more and more layoffs we'll have.
Prices ARE already going down, I've seen couple of houses in my area being discounted by 50-100k and still for sale. But they are still excessive, and there is much more room for them to drop in my opinion, and in the opinion of many analysts. A stick and paper house is hardly worth 600 or 700k. If you want to know the fair value, just look at the prices from the 90's, and add the 20 or 30 years of inflation and you're there. What we have is still a big ass bubble. Needs to be popped. Like an ugly zit that it is.
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03-19-2015, 07:11 PM
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#68
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Lifetime Suspension
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Quote:
Originally Posted by lorenavedon
just remember if that if you wait until oil prices pick back up and hiring starts up again you'll be back where you started fighting with everyone for scraps at stupid high prices. So it goes both ways.
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If you bought in 08 right before the big crash, it took until last summer to break even. People that are losing their jobs now won't be on the RE market as buyers for a long time. Takes time to first get a job, complete probation and then save up for downpayment to qualify for a mortgage.
That's not even touching on the people that are going to increase their debts just to survive or the ones that will go insolvent. These guys will take years to recover.
It will probably take a year or more just to hire all the people back. And that's not happening till oil is back at $75+.
And don't immigrants usually come here with $7 in their pocket? How are they to buy houses with that?
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03-19-2015, 08:41 PM
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#69
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Backup Goalie
Join Date: Dec 2013
Exp:
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when was the last time housing in Calgary took a hit that actually lasted? early 90s? Nobody has time for 30 year swings. Life is short. 08 was meaningless. It was a V bottom. We're at record highs in equities and rates are going nowhere. If you're waiting for rates to go up and for deflation to hit the housing sector, you could be waiting decades. By then it won't matter what you paid now. Population of planet earth is going up exponentially and people need a place to live. To the average person not born into privilege, Canada looks like a pretty awesome place with tons of space for everyone and great social programs. So I don't see any scenario where prices are going to come down.
Saying things like "this house had a 50k price drop"; is meaningless. Odds are that even with a 50k price drop it's way higher than what it would have sold for last year in the hottest market Calgary's ever seen. Nobody is selling for less than last year. Prices have zero chance of ever going back to 2009-2010 levels.
If you think so, please, with logic and reason and arguments, tell me how I'm wrong.
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03-20-2015, 01:21 PM
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#70
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In the Sin Bin
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Dude. There was a ten year recession in Alberta in the 80's. Not even that long ago.
That has to be the most ridiculous view I've ever heard in my life. If there's no work, people aren't going to come to Calgary. Why would they? It's not like the whole world is going to ####, it's just (Expensive) Oil based economies. FIRST thing someone looking to move countries or provinces will do is look at employment numbers. Would you go to the place that has more work or less work? Pretty simple logic right there.
I don't know how old you are, but I'm assuming by your attitude you probably aren't old enough to remember or experience a real economic down turn in Alberta and because of this, you have these expectations that everything will always be peachy.
You want to know what can happen to a city riding the good times, seemingly forever? You should read about Winnipeg, or even better, Detroit.
No it can't happen here right? Cause...ummm well... oil.... ummm....?
Now I don't think that's what is going to happen in Calgary but it is completely realistic to say we won't see $80+ oil for the next decade. Do you know what that means for the Oil Sands? Lets hope it doesn't come to that but you're completely out to lunch if you think Calgary has some sort of blessing that will guarantee that it will keep growing forever.
There is no justification for Calgary's real estate bubble. None. We don't lack space, we don't build some sort of great quality housing, we're just lucky to have high population growth due to what used to be a very hot job market. Now there is a very real chance that stops long term. Tell me then, what will prop up these prices when our population stays flat or goes down and the people that do still have work here are now making significantly less without the high salaries? I don't care what sellers WANT to sell their house for. It's what people can afford.
Ask the people who aren't working in O&G, the people making 45 - 60 K a year how affordable housing is in this city. If that becomes the new reality, I'd love to see how your sellers are going to sell their 1000 sq ft starter home in Cranston for $400 K
Last edited by polak; 03-20-2015 at 02:13 PM.
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03-20-2015, 01:32 PM
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#71
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First Line Centre
Join Date: Apr 2006
Location: Calgary
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Sounds like you believe that Calgary is going to turn into a ####hole.
Why would you even consider buying a place in Calgary at any point?
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03-20-2015, 01:48 PM
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#72
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In the Sin Bin
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Quote:
Originally Posted by Regorium
Sounds like you believe that Calgary is going to turn into a ####hole.
Why would you even consider buying a place in Calgary at any point?
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No I don't. I'm just arguing what could very well happen, and did happen 30 years ago. I think guaranteeing that somehow, Calgary is never going to experience a real estate downturn because "there are a lot of people in the world and we have social programs" is the stupidest thing I've ever read. (By the way, our social programs are crap compared to most western countries fyi. Go read up on the social programs of countries like Germany and France)
What do I think will happen? Oil prices will stay low for at least year before they might start to rebound. Oil and Gas companies will still be hesitant to start any major new projects for a bit so I'd say 2 or 3 years until we see hiring take off again. In that time, I'm going to guess prices drop 20-30%.
That's my current guess on the situation.
Last edited by polak; 03-20-2015 at 01:51 PM.
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03-20-2015, 01:51 PM
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#73
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Playboy Mansion Poolboy
Join Date: Apr 2004
Location: Close enough to make a beer run during a TV timeout
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Quote:
Originally Posted by polak
Dude. There was a ten year recession in Alberta in the 80's. Not even that long ago.
[Snip]
I don't know how old you are, but I'm assuming by your attitude you probably aren't old enough to remember or experience a real economic down turn in Alberta and because of this, you have these expectations that everything will always be peachy.
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Not that I don't agree with you to a certain extent, but to be fair- how old were you in 1989?
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03-20-2015, 01:57 PM
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#74
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In the Sin Bin
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Quote:
Originally Posted by ken0042
Not that I don't agree with you to a certain extent, but to be fair- how old were you in 1989?
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Haha I was born in October.
I'm just saying that his age is probably the biggest factor in that opinion. I have this argument with some of my friends on a regular basis. They seem to believe that it can never happen. That housing prices will ALWAYS go up.
Can't blame them, my generation hasn't really seen a real downturn. '08-'09 was the worst we've seen and Canada was pretty protected from that.
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03-20-2015, 03:04 PM
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#75
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Backup Goalie
Join Date: Dec 2013
Exp:
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Quote:
Originally Posted by polak
Dude. There was a ten year recession in Alberta in the 80's. Not even that long ago.
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I mentioned the early 90s. No need to go back to the 80s. Plus the 80s lasted a few years before it stabilized. The high rates was what kept prices low, not the economy.
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That has to be the most ridiculous view I've ever heard in my life. If there's no work, people aren't going to come to Calgary. Why would they? It's not like the whole world is going to ####, it's just (Expensive) Oil based economies. FIRST thing someone looking to move countries or provinces will do is look at employment numbers. Would you go to the place that has more work or less work? Pretty simple logic right there.
There is no justification for Calgary's real estate bubble. None. We don't lack space, we don't build some sort of great quality housing, we're just lucky to have high population growth due to what used to be a very hot job market. Now there is a very real chance that stops long term. Tell me then, what will prop up these prices when our population stays flat or goes down and the people that do still have work here are now making significantly less without the high salaries? I don't care what sellers WANT to sell their house for. It's what people can afford.
Ask the people who aren't working in O&G, the people making 45 - 60 K a year how affordable housing is in this city. If that becomes the new reality, I'd love to see how your sellers are going to sell their 1000 sq ft starter home in Cranston for $400 K
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Ok so I'm trying to grasp your arguments and reply.
1) Unemployment doesn't not necessarily mean lower house prices because just because someone is unemployed doesn't mean they need to sell their homes. Even unemployed people need a place to live. Calgary is not a work camp, people live here and call it home, it's one of the biggest cities in Canada and consistently ranked one of the best places on earth to live. Not saying prices will go up, but unemployment alone is not enough to send prices crashing.
2) We don't lack space. You're right, but we lack affordable land in good locations. People have a limit and not everyone wants to live within a 5 hour commute to the center. The rich hoard land in Calgary and will not sell it unless they get the prices they want. If times get tough they just hold onto it. Building a house in Calgary still costs a lot of money, we don't have illegal Mexican day laborers building our homes like they do in Texas or California etc. Stuff here takes a long time to build and it's expensive.
3) People will move here even in a poor job market because they want to live in Calgary just like people move to any other city that has a far worse UE rate than Calgary has ever had. Look at how many people flood into Vancouver and it has a horrible economy.
4) Marginal wage people can't afford homes. That's right. So the rich buy the homes and rent them out to the poor and fleece them for %50-%80 of their take home because its the only game in town. I don't like it, but it's reality. It's what happened in the US after the financial crisis. Homes were foreclosed on and selling for cheap so hedge funds and the rich purchased them all and rented them back to the same people that were foreclosed on. The rich get richer. Sucks, but that's the world we live in and it's a similar situation in Calgary. There are tons of rich people here just waiting to jump on cheap real estate. I think you would be very surprised how many people in Calgary are saying, "wow I can't wait for prices to come down so I can BUY". Sorry, that's not a sign of low prices to come. All those bottom feeders will put a floor on this market.
5) Look at the MLS. If people don't get the price they want they're delisting. This isn't like in the US where people are foreclosing. It's just not happening here. Our low rates will keep this bubble going for a long time yet. Mark my words.
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03-20-2015, 04:24 PM
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#76
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In the Sin Bin
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Quote:
Originally Posted by lorenavedon
Ok so I'm trying to grasp your arguments and reply.
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Quote:
1) Unemployment doesn't not necessarily mean lower house prices because just because someone is unemployed doesn't mean they need to sell their homes. Even unemployed people need a place to live. Calgary is not a work camp, people live here and call it home, it's one of the biggest cities in Canada and consistently ranked one of the best places on earth to live. Not saying prices will go up, but unemployment alone is not enough to send prices crashing.
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Actually, you were saying prices will go up. Unemployment is exactly what would drive prices down. You say Calgary is not a work camp, but when a very large chunk of your population are new migrants then a work camp is pretty much what it is to them. When things go bad the ones with no roots will be the first to leave. Lots of Calgarians with little to no roots living here right now.
Quote:
2) We don't lack space. You're right, but we lack affordable land in good locations. People have a limit and not everyone wants to live within a 5 hour commute to the center. The rich hoard land in Calgary and will not sell it unless they get the prices they want. If times get tough they just hold onto it. Building a house in Calgary still costs a lot of money, we don't have illegal Mexican day laborers building our homes like they do in Texas or California etc. Stuff here takes a long time to build and it's expensive.
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Except people keep building out further and further from downtown into those wide open spaces and all of those houses in Saddleridge and Legacy are still selling for stupidly high prices. They will drop.
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3) People will move here even in a poor job market because they want to live in Calgary just like people move to any other city that has a far worse UE rate than Calgary has ever had. Look at how many people flood into Vancouver and it has a horrible economy.
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Vancouver is a world renowned, air and sea hub city. Take away the jobs and people want to move to Calgary like people want to move to Ottawa or Winnipeg.
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4) Marginal wage people can't afford homes. That's right. So the rich buy the homes and rent them out to the poor and fleece them for %50-%80 of their take home because its the only game in town. I don't like it, but it's reality. It's what happened in the US after the financial crisis. Homes were foreclosed on and selling for cheap so hedge funds and the rich purchased them all and rented them back to the same people that were foreclosed on. The rich get richer. Sucks, but that's the world we live in and it's a similar situation in Calgary. There are tons of rich people here just waiting to jump on cheap real estate. I think you would be very surprised how many people in Calgary are saying, "wow I can't wait for prices to come down so I can BUY". Sorry, that's not a sign of low prices to come. All those bottom feeders will put a floor on this market.
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Ummm.... You know your whole point here hinges on prices dropping significantly? The "Rich" in the US didn't go buy up all those homes for the over inflated prices that the "poor" who were foreclosed on paid for them. They waited until those houses were almost worthless, bought them all up and then rented them out for prices that the "poor" could afford because the owners were paying significantly less for the property.
That whole "game" requires the bottom to fall out completely.
Quote:
5) Look at the MLS. If people don't get the price they want they're delisting. This isn't like in the US where people are foreclosing. It's just not happening here. Our low rates will keep this bubble going for a long time yet. Mark my words.
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Yeah they're delisting now. The whole idea of this discussion is that Oil prices look to be staying low for the foreseeable future which means the lay offs will continue and new work won't be coming online anytime soon. Then a lot of those people won't have the option of delisting. On top which, as more and more people are laid off, the amount of potential buyers will continue to go down.
THEN, once prices actually drop and only then will you get a the vultures (like me) who are waiting patiently on the sidelines to scope in and buy.
Last edited by polak; 03-20-2015 at 04:49 PM.
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03-20-2015, 04:56 PM
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#77
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Backup Goalie
Join Date: Dec 2013
Exp:
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Quote:
Originally Posted by polak
THEN, once prices actually drop and only then will you get a the vultures (like me) who are waiting patiently on the sidelines to scope in and buy.
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we'll see. I just don't see the government letting house prices fall. Even if it means killing our dollar. After oil and gas, the housing industry is all we have left. They'll take our dollar to 2:1 to the US if needed to keep this afloat.
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03-20-2015, 05:14 PM
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#78
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Self Imposed Exile
Join Date: Jul 2008
Location: Calgary
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Quote:
Originally Posted by lorenavedon
we'll see. I just don't see the government letting house prices fall. Even if it means killing our dollar. After oil and gas, the housing industry is all we have left. They'll take our dollar to 2:1 to the US if needed to keep this afloat.
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This theory I disagree with.
I would agree with you if interest rates were 5%.
But the government played that hand in 2008.
We have had growth since, but our government never raised rates to bring back their cushion. They were to afraid to limit the growth.
That option is gone.
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03-20-2015, 11:55 PM
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#79
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Draft Pick
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Quote:
Originally Posted by lorenavedon
when was the last time housing in Calgary took a hit that actually lasted? early 90s? Nobody has time for 30 year swings. Life is short. 08 was meaningless. It was a V bottom. We're at record highs in equities and rates are going nowhere. If you're waiting for rates to go up and for deflation to hit the housing sector, you could be waiting decades. By then it won't matter what you paid now. Population of planet earth is going up exponentially and people need a place to live. To the average person not born into privilege, Canada looks like a pretty awesome place with tons of space for everyone and great social programs. So I don't see any scenario where prices are going to come down.
Saying things like "this house had a 50k price drop"; is meaningless. Odds are that even with a 50k price drop it's way higher than what it would have sold for last year in the hottest market Calgary's ever seen. Nobody is selling for less than last year. Prices have zero chance of ever going back to 2009-2010 levels.
If you think so, please, with logic and reason and arguments, tell me how I'm wrong.
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You make a lot of assertions here:
- no scenario where Calgary prices are coming down
- nobody in Calgary selling for less than last year
- zero chance of Calgary prices going back to 2009-2010 levels Using logic and reason and maybe even some data can you defend any of these claims?
Arguments such as "equities are at an all time high" and "the underprivileged would like to move to Canada (not Calgary) for our great social programs" don't justify your position. Quite frankly, they undermine it.
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03-21-2015, 09:26 AM
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#80
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Franchise Player
Join Date: Feb 2007
Location: A small painted room
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Lorenavedon, almost everything you say makes me think that you're only trying to convince yourself. The main reason for Calgary's prosperity is o&g. Pull that away and the stop gaps you speak of can only take you so far. When industries fail you'll eventually see it in the market. Look at Detroit, Windsor. Hamilton when manufacturing took a hit. The east coast towns when fishing declined..
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