I can't wait until this real-estate market collapses.......

[prarieboy]

Originally Posted by housejunk

The only thing that comes with high property values are higher taxes. I can't wait for this market to collapse.

Actually, my house went up $140,000 in the assesment this year and my taxes went down about $20 a month.

[housejunk]

Originally Posted by MoneyGuy

I'm a civic politician. This guy gets it.

It's not a complicated notion. I'm glad he gets it and I'm glad he felt the need to explain it (with examples and bold!). The thread is/and/was never intended to be about property taxes but the current state of the real estate market.

[ricoFlame]

lord i hope it does some day, i'm sick of throwing away money renting, but i can't afford to get f'd over with one of there ridiculous newfangled mortgages for a junky house whose value is way too high.

[prarieboy]

Originally Posted by housejunk

It's not a complicated notion. I'm glad he gets it and I'm glad he felt the need to explain it (with examples and bold!). The thread is/and/was never intended to be about property taxes but the current state of the real estate market.

That being said I couldn't agree more. If I had waited even two months I couldn't have afforded the house I'm in now.
Houses that were worth $20,000 30 years ago are selling for $400,000 now. Does that mean our kids will be paying $8,000,000 in 30 years time??
I doubt it. The market has to correct itself at some point but it's anybody's guess when that will be.

[Wookie]

Originally Posted by housejunk

I've got a place in Kensington, and I'm happy where I am. I'm born and raised in Calgary and it's one of the few locations in this city where I get the feeling that I'm living in a major city and not part of some nameless subrub that could be anywhere. My property has gone up insanely, but I'm not willing to cash-in and move into a pre-fab place halfway to Okotoks just to pocket some money. All I'm saying, is that this recent market increase does virtually nothing for your average, single-home owning Calgarian.

I'm a little confused.

What's the problem? Would you prefer if your house hadn't increased in value and you had no extra "perceived" equity in your house? Then you could do what..?

You'd be in the same position except at a lower price level, which, would be no change..

[housejunk]

Originally Posted by prarieboy

Actually, my house went up $140,000 in the assesment this year and my taxes went down about $20 a month.

That's fantastic for you. From what I've seen in my circle of friends/acquantinces, we apparently live in areas of the city in which the assessment is higher than the average of 43%. Generally houses around the downtown core, Kensington/West Hillhurst. Its known as the "Lawyers ghetto". Don't get me wrong, I'm blessed and fortunate to live in a desirable area of town, but over the last few years I haven't seen anything that justifies the outrageous prices that some of the houses have been getting in the area.

Also, with the price of the houses the way they are, there's a certain gentrification in the neighborhood which I find sort of repulsive. When I moved in a few years ago my neighbors were far more interesting than they are today.

[prarieboy]

Originally Posted by housejunk

Also, with the price of the houses the way they are, there's a certain gentrification in the neighborhood which I find sort of repulsive. When I moved in a few years ago my neighbors were far more interesting than they are today.

The only people that can move into such a desirable area now are people with alot of cash in hand. I'm not suprised your area is changing.
I would love to buy one of those tiny un-insulated cabins and rip it down to build something more modern but I just don't have the dough.

[housejunk]

Originally Posted by Wookie

I'm a little confused.

What's the problem? Would you prefer if your house hadn't increased in value and you had no extra "perceived" equity in your house? Then you could do what..?

You'd be in the same position except at a lower price level, which, would be no change..

Yeah, I guess you're right there. I suppose I just get sick of people coming to me and raving (let's call it what it is...bragging) about how much their home has gone up in value when in my mind (as a single home owner) I don't see how much it benefits us. Don't get me wrong, I'm glad my home is valued what it is, but unless you got into the market early, or own a few places that you can flip without losing your primary residence, I don't see what's so great about it. I've got lots of friends who are smart, well-educated and in fantastic jobs who are having the toughest time out there landing an affordable place. As a lifelong Calgarian, I don't see the appeal of pricing out young people looking to start their lives here.

Personally, I love my place and I plan on sticking here for a long, long time. I honestly wouldn't care if my house dropped in value if it meant making this city a little more affordable. I started my career in Vancouver, and its terrible seeing how people have to mortgage their lives away. I'm starting to see that a lot more here.

[Wookie]

Originally Posted by housejunk

Yeah, I guess you're right there. I suppose I just get sick of people coming to me and raving (let's call it what it is...bragging) about how much their home has gone up in value when in my mind (as a single home owner) I don't see how much it benefits us. Don't get me wrong, I'm glad my home is valued what it is, but unless you got into the market early, or own a few places that you can flip without losing your primary residence, I don't see what's so great about it. I've got lots of friends who are smart, well-educated and in fantastic jobs who are having the toughest time out there landing an affordable place. As a lifelong Calgarian, I don't see the appeal of pricing out young people looking to start their lives here.

Personally, I love my place and I plan on sticking here for a long, long time. I honestly wouldn't care if my house dropped in value if it meant making this city a little more affordable. I started my career in Vancouver, and its terrible seeing how people have to mortgage their lives away. I'm starting to see that a lot more here.

Yeah, I agree with you, the nouveaux rich based on an increase in home equity **** me off to. However, it can be used well, I've been reading about something called the smith maneuver which sounds interesting. But the morons who think they're rich don't quite get that they're staying on par with everyone else in the city and can only capitalize on a sale by finding a great deal, putting the equity to work at a good return, or leaving the province.

Congrats on having a home in kensington though, that's pretty impressive, I have no idea what I'm going to do for a place to live in the next 12 months.. I'm about to get a really good job and still feel priced out of the market. I'd be content to move, and the new job will give me this opportunity, but in 5 or so years.

Ah well..

[Resolute 14]

Originally Posted by JiriHrdina

{Waves his hand}

It is frustrating isn't it. I've been in a situation where I couldn't buy something for a number of reasons, but now I want to and I don't know if I can afford to do so. One starts to think hard about leaving this city simply because I don't know if I can afford to be a home owner here.

But I'm not whining about it - its the nature of the market, and I made choices that got me to this point - none of which I regret. But it does make looking around for your own place a bit frustrating.

Could be worse. I had a chance to buy a jr 1 bedroom condo late 2005 at the London condos on MacLeod. At the time, I had no clue what the market was like, but because of debtload and the fact that if you are single, you are screwed when it comes to a mortgage, I couldn't get a larger one I wanted, and decided to spend the next year saving and paying off debt, then buying into phase two.

Queue the bubble. So, after spending a year knocking my debt down from $10,000 to $5,000 (and will be paid off entirely by the end of summer), and increasing my savings from $800 to $8000, I've fallen behind $100,000 on a bloody jr 1 bedroom by the market boom.

It was frustrating and incredibly depressing to look at the prices for phase 2 when they came out.

[photon]

Originally Posted by housejunk

Yeah, I guess you're right there. I suppose I just get sick of people coming to me and raving (let's call it what it is...bragging) about how much their home has gone up in value when in my mind (as a single home owner) I don't see how much it benefits us. Don't get me wrong, I'm glad my home is valued what it is, but unless you got into the market early, or own a few places that you can flip without losing your primary residence, I don't see what's so great about it.

You just answered your own question. Rather than complaining about the strongest economy this country has ever seen in its entire history, take advantage of it. Take some equity out of the house, invest it in some other real estate, and profit from it. It's not like this kind of economy or opportunity comes along very often. There's tons of people who will give you a 50% stake in real estate and you have to do nothing other than invest your cash.

Because the crash you hope for isn't coming, not for a good while at least.

[algernon]

Originally Posted by KTown

I don't see this real estate marketing crashing any time soon. So don't wait forever.

I've been thinking of taking advantage of the boom and moving to Texas or Lousiana, I got a few companies looking for my services. I could buy a nice house, and have no mortgage with what I sell mine for. Not bad for a 27 year old.

The only problem is I never could afford to move back here until the market did crash.

Why not keep your house here, rent it out to cover the mort., utilities,and possibly taxes? Then, buy a 100,000 house (or whatever the going rate is) down in Lousiana or where ever? The payments on 100 G can't be that bad (especialy on a 50 yr mort.), and you could move back home when ever, and still own property.

[JiriHrdina]

Originally Posted by Snakeeye

Could be worse. I had a chance to buy a jr 1 bedroom condo late 2005 at the London condos on MacLeod. At the time, I had no clue what the market was like, but because of debtload and the fact that if you are single, you are screwed when it comes to a mortgage, I couldn't get a larger one I wanted, and decided to spend the next year saving and paying off debt, then buying into phase two.

Queue the bubble. So, after spending a year knocking my debt down from $10,000 to $5,000 (and will be paid off entirely by the end of summer), and increasing my savings from $800 to $8000, I've fallen behind $100,000 on a bloody jr 1 bedroom by the market boom.

It was frustrating and incredibly depressing to look at the prices for phase 2 when they came out.

Yup. Exactly - I'm just keep kicking myself in the rear for not doing something a year ago as well. I'm not one to get caught up in regret because its a pretty useless emotion - but its hard not to right now.

Course I didn't aniticipate either what the market would do nor how my situation with my current place would change.

Ah well.

[photon]

Originally Posted by JiriHrdina

Course I didn't aniticipate either what the market would do nor how my situation with my current place would change.

Pretty much no one did. I knew people what were predicting a run up due to the economics of the province, but not the 40+% we saw.

This year is going to be similar as well, January saw a 5% increase in single family homes in Calgary already. CMHC (who is usually ultra-conservative in their predictions) is even calling for 38% for 2007.

November and December saw a bit of a downswing (as it always does), and that would have been a decent time to buy. Otherwise I don't think anyone would be making a mistake even if they bought now.

[Cowperson]

Originally Posted by housejunk

The only people who benefit from high property values are people like my parents, who own numerous properties and paid them off years ago. For young people like me . . . . .

Your parents were in exactly the same position as yourself at one point . . . . and probably saying the same thing as you were.

They put in the time, eventually paid off their mortgage, levered their extra savings into other properties . . . . and thirty years had passed.

You're not willing to put in the time. You want it now. Impatience. That's your problem.

Cowperson

[SeeGeeWhy]

Originally Posted by housejunk

Your explanation was unecessary. The number this year was 43% I believe? That being said, I'm not of aware of anyone whose property tax hasn't increased. Over a 5 year period, (for myself) its been ridiculous. Plus, I'm a Calgarian so I'm not concerned with what other Canadian municipalities are doing in relation to their own property tax algorithims. From my perspective the return I've seen relating to property tax and services over the time I've owned my home are far from congruent.

My taxes dropped this year and held steady last year and I live in Mission/Connaught on 14th Ave and 5th St. That said, the property assesment on my condo is nowhere near the market value...

Don't have to be so bitter chap. So you pay a couple hundred dollars extra a year to live in one of the most desirable communities in Calgary? Woo.

You can always take out a line of credit for 75% of the difference between your bank assessed property value and the balance remaining on your mortgage... that is how you can make the money 'real' without moving. Yes, it is not the full value and you pay a (low) interest rate, but if you do something productive with it, it is worth your while.

[fredr123]

Originally Posted by JiriHrdina

{Waves his hand}

It is frustrating isn't it. I've been in a situation where I couldn't buy something for a number of reasons, but now I want to and I don't know if I can afford to do so. One starts to think hard about leaving this city simply because I don't know if I can afford to be a home owner here.

But I'm not whining about it - its the nature of the market, and I made choices that got me to this point - none of which I regret. But it does make looking around for your own place a bit frustrating.

The wife and I were in a similar situation. Both of us had a lot of school debt and I was still in school. We almost bought a condo in the Beltline area but pulled out at the last minute. I don't regret that situation because I don't think we would have been happy there. And making the mortgage payments at that time would have pretty much taken all of our income. Money would have been tight for sure and if interest rates went up or one of us couldn't work...

Now we've managed to pay much of our student and other loans down. I'm working full-time and will probably be getting a much nicer salary by the end of the summer. My wife has a decent job and makes a good wage too (though she's going on maternity leave in a week). We don't have enough savings to make a dent on the huge cost of home ownership nor do we earn enough to qualify for a large enough mortgage. We probably can't even afford that dumpy condo in the Beltline area any more.

But what do you do? I'm not in oil and gas so being in the City isn't totally necessary but my job does directly benefit from the boom. Plus we love Calgary. Sigh...

[photon]

Just to give some perspective.. Demographia International does a study where they find out how many years of salary an average home costs. Regina was the cheapest in Canada where it took 2 years of the average salery to buy the average home. Edmonton was 3.5, Calgary and Toronto were 4.4. Vancouver led the country at 7.7!

Internationally, Regina was one of the world's most affordable cities at 2.0, and Canada overall was one of the most affordable countries with a median of 3.2, compared to other countries such as Australia at 6.6, Ireland at 5.7, and the UK at 5.5. The US was 3.7.

For individual cities Calgary still compares favorably at 4.4 vs major cities in the above countries at high multiples like 7 to the highest of 11.4 in Orange County in LA.

So while I agree that for individuals trying to buy their first home it is very difficult right now, big picture Calgary and Canada are still relatively affordable when compared to a lot of the world, which means people are still going to move here.

Both Edmonton and Calgary are projected to add a population equal to the size of Red Deer by 2012. That's a lot of people, and they all need a place to live.

EDIT: Of course that doesn't help people trying to buy now, just talking about some of the drivers of the economics.

[SeeGeeWhy]

The one thing I do agree with you on, housejunk, is that the current economic conditions have whipped this Province into a frenzy for acquisition... and we seem to be losing our character in the name of winning the game.

I'm also a born and raised Calgarian and I am disappointed in the way this city is going.

[Bring_Back_Shantz]

Originally Posted by housejunk

Again, thank you for your long-winded diatribe relating to the inherent infalliability of the municipal property tax system. There is no logical fallacy involved with my initial post. You, for some reason chose to take an out of context throw-away comment to launch into some sort of doctoral dissertation that was not, and is not needed. Unfortunately, after attending engineering, masters and law school I have had far too many encounters with the type of indivdiual that you are; the unlikeable know-it-all who never fails to attempt to assert their percieved knowledge over the percieved ignorance of the unwashed masses.

Let a fella complain about his taxes if he wants.

EDIT: I was wondering why you insisted on coming across like such a wanker, and then I remembered! You're that anti-pet insurance/good christian guy I was telling my friends about a few weeks ago. Yowza.

http://forum.calgarypuck.com/showthread.php?t=35823

Given the choice between reading the thoughts of a "Unlikeable know-it-all" and yours, I'll take Clareen every time. At the very least he thinks through his position thorourhgly and logically, instead of mentioning how many degrees he has.