Calgary Real Estate predictions?

[Table 5]

So if there is a burst in the market, how much of a fall can one expect? What's the worst case scenario amongst the naysayers? 10%? 25%?

I'm asking this is as someone who is very close to buying a house (you know, if I can ever get some financing).

[Slava]

Originally Posted by Table 5

So if there is a burst in the market, how much of a fall can one expect? What's the worst case scenario amongst the naysayers? 10%? 25%?

I'm asking this is as someone who is very close to buying a house (you know, if I can ever get some financing).

Well you know this thread has been going for about 6 years now, and people thought that it was due for a crash basically any time back then. I think that the comment was that we would follow what happened in the US, but about 1 1/2 years behind them. Instead since that time I think that the market has been stable and shown increases. I suppose sooner or later the market will pull back and this thread will get brought up and people will pile on and say "see, I told you it was coming". I know I can't wait to read those comments.

[Travis Munroe]

In the next 3 years I believe we see a pull back but nothing close to a crash. I just cant see 5 + years of very steady growth without a minor correction.
Yes, the flood is still to blame for a large part of what is happening out there. I am still working with buyers who were looking just prior to the flood. Unfortunately, not everyone is able to drop what they are doing to view a new listing. By the time we do get in it is either C/S or has multiple offers forcing them to pay more than they would have had we got out sooner!

[GP_Matt]

Originally Posted by Realtor 1

Unfortunately, not everyone is able to drop what they are doing to view a new listing. By the time we do get in it is either C/S or has multiple offers forcing them to pay more than they would have had we got out sooner!

If the price goes up because they weren't there first thing in the morning does that not imply that the listing agent is doing a poor job?
Why would someone accept the first offer they get the morning the listing is open if the trend is waiting 6 hours jumps the price?

[Table 5]

Originally Posted by Slava

Well you know this thread has been going for about 6 years now, and people thought that it was due for a crash basically any time back then. I think that the comment was that we would follow what happened in the US, but about 1 1/2 years behind them. Instead since that time I think that the market has been stable and shown increases. I suppose sooner or later the market will pull back and this thread will get brought up and people will pile on and say "see, I told you it was coming". I know I can't wait to read those comments.

Yeah, you're right, it does seem like it's been a long time coming. I do feel like a correction will come sooner or later, but I don't see houses dropping drastically unless something really major happens.

Either way, it's one of the reasons Im looking in the inner city as opposed to somewhere farther out. You're always a little bit price protected with a good location... even if there is a correction, chances are it won't be as drastic.

[lorenavedon]

the situation in Calgary is completely different. Really rather impossible to have a crash but totally possible to have stagnating prices or even a small pull back.

A few factors. One being that Calgary is the best economy in NA right now. People aren't just going to randomly pack up and leave the city. Where are they going to go? So a mass exodus is not likely to happen like it did in the 1980s or 90s where people tried to leave the city. Even if oil and gas slows down quite a bit people aren't going to pack up and leave to Vancouver so they can get a job there at Walmart. Calgary has grown to a size now that if the economy is bad here, chances are it's bad everywhere.

Another major factor is money. People here in general are filthy rich including the middle class. People just don't HAVE to sell. Someone might want to sell, but if they see they cant break even or get the price they want they'll just hold on. Nobody is in a panic to sell here like they were in the US. In the US people were foreclosed because they couldn't make monthly payments. Here, people could lose their jobs for years and still have savings enough to make payments. Also foreign billionaire investors have money and time to hold and not have to panic sell.

Interest rates. A big factor and we'll probably see a cut in rates before we see an increase. Canada is dead set on a currency war with the US and no matter how good our economy is, they will do what they can to kill the dollar to match the pathetic "recovery" the US is currently struggling through. This means rates will remain low for years or decades and it's very possible inflation will wipe away a lot of people's mortgage debts.

Another huge factor is supply and demand. There just isn't any supply out there. This makes owning economically viable evidenced by rent prices. In a lot of places where the housing market crashed there was tons of supply and rents were dirty cheap. $1000 rents on $500k properties. People were renting at a loss because they thought their house appreciation would make up for it. Rent at a loss for 5 years then sell your 500k place for $800k or 1 million. People were crazy. This isn't happening in Calgary now. Rents are super high and in tern justify the house prices.

In general are house prices high in Calgary? yes. Welcome to the new norm.

[Winsor_Pilates]

Originally Posted by lorenavedon

Even if oil and gas slows down quite a bit people aren't going to pack up and leave to Vancouver so they can get a job there at Walmart.

I sure hope not. They'd be in for a rude awakening when they find out there's only 1 Walmart in Vancouver, and it's right on the Burnaby boarder.

[darklord700]

Originally Posted by Winsor_Pilates

I sure hope not. They'd be in for a rude awakening when they find out there's only 1 Walmart in Vancouver, and it's right on the Burnaby boarder.

Most people in Vancouver don't know where that 1 Walmart is, they thought there isn't any in Vancouver.

[darklord700]

Originally Posted by lorenavedon

Another major factor is money. People here in general are filthy rich including the middle class.

From my own personal anedoctal observation, Calgary has high degree of assortative mating variation. I have been to a few weddings where the bride and groom are both lawyers, physicians, accountants or other well paid professionals.

These couples and families have huge purchasing power that a million dollar mansion is easily affortable to them. That's because we do have high concerntration of high paying jobs here.

But that could potentially lead to increase in income inequality where gap between the have and have not widens. I used to be shocked me when I heard two young CA student couple buying a $600K house after the wedding but not anymore now. It's the new norm.

[chemgear]

Originally Posted by darklord700

But that could potentially lead to increase in income inequality where gap between the have and have not is widen.

So CP members and non-CP members eh?

[bizaro86]

Originally Posted by kevman

So what's happening in Calgary right now? Things seem to be taking off again with houses selling fast and for over list. Inventory is low low and demand seems strong. Where is the crash? There are some pretty crappy houses getting snapped up in days!

Are rates going up soon? Inflation is low but the dollar is slipping.

Having only casually followed it all for the last 6 or 7 years things seem very odd right now.

Warning: Anecdotal 'evidence' to follow

I sold a rental recently, using the following process. I happened to mention to a realtor we were considering selling it. She sent some comps, and asked what we wanted for it. I took what I wanted, and then added a margin of safety for negotiating down, and unexpected costs. This number was aggressive considering comparables over the last year, but I figured I could go down a bit if I had to.

I told the Realtor that number. The next day, she showed it to a client and brought me an offer for 5% above what I had said, before it went on MLS.

The market is surprising strong. I don't think its flood displacement anymore, just a disconnect between supply and demand.

[roadblock]

Originally Posted by Realtor 1

In the next 3 years I believe we see a pull back but nothing close to a crash. I just cant see 5 + years of very steady growth without a minor correction.
Yes, the flood is still to blame for a large part of what is happening out there. I am still working with buyers who were looking just prior to the flood. Unfortunately, not everyone is able to drop what they are doing to view a new listing. By the time we do get in it is either C/S or has multiple offers forcing them to pay more than they would have had we got out sooner!

I was in this exact situation. Finally got a listing on a Thursday night, went to look at it Friday morning when most people were still working. Put an offer in for list price and had to be accepted by 5pm that day. Got accepted and avoided the multiple offer situation I was getting on literally every other property for about 6 months straight.
If you see a place that fits your criteria you really have to jump on it now.

[Calgary14]

Originally Posted by Realtor 1

In the next 3 years I believe we see a pull back but nothing close to a crash. I just cant see 5 + years of very steady growth without a minor correction.
Yes, the flood is still to blame for a large part of what is happening out there. I am still working with buyers who were looking just prior to the flood. Unfortunately, not everyone is able to drop what they are doing to view a new listing. By the time we do get in it is either C/S or has multiple offers forcing them to pay more than they would have had we got out sooner!

I agree with the above - prices can only increase for so long before a correction (minor) happens. I think the consensus is that the price you buy at now could easily be the same price in 5 years - give or take a little.

[Slava]

Originally Posted by Calgary14

I agree with the above - prices can only increase for so long before a correction (minor) happens. I think the consensus is that the price you buy at now could easily be the same price in 5 years - give or take a little.

Not that I disagree, but is there anywhere that 'consensus view' is stated?

[ranchlandsselling]

I generally think we've topped out. Not that there will be a crash, or even a decline, but as interest rates rise (next 5 years, not immediately) I think we'll see a price level that doesn't increase or decrease but falls with inflation. The one thing that could change all that is O&G prices. Like everyone says, Calgary is income city in Canada. If it keeps up that fuels the housing prices and people will just pay what they can afford.

That said, if it keeps up elsewhere because of rates the GOC could step in and tighten again. The biggest killer I could see is a change in the downpayment amount. Honestly think that would be the biggest factor on house prices.

Anyway, I'm having a place listed tomorrow. Will report back how it goes. Got a friend giving me a wicked deal on the listing so I decided to try her vs. Travis (Realtor1). Granted I'm listing it for $5k over what was paid in 2007 (or 08), after putting in about $15-$20k, so the market might be good right now, but man did some people overpay in 07/08

[bizaro86]

Originally Posted by ranchlandsselling

I generally think we've topped out. Not that there will be a crash, or even a decline, but as interest rates rise (next 5 years, not immediately) I think we'll see a price level that doesn't increase or decrease but falls with inflation. The one thing that could change all that is O&G prices. Like everyone says, Calgary is income city in Canada. If it keeps up that fuels the housing prices and people will just pay what they can afford.

That said, if it keeps up elsewhere because of rates the GOC could step in and tighten again. The biggest killer I could see is a change in the downpayment amount. Honestly think that would be the biggest factor on house prices.

Anyway, I'm having a place listed tomorrow. Will report back how it goes. Got a friend giving me a wicked deal on the listing so I decided to try her vs. Travis (Realtor1). Granted I'm listing it for $5k over what was paid in 2007 (or 08), after putting in about $15-$20k, so the market might be good right now, but man did some people overpay in 07/08

Why do interest rates have to go up the next 5 years? People have been saying that for 5 years now, and it hasn't been true yet.

Examples: http://forum.calgarypuck.com/showpos...&postcount=290

http://forum.calgarypuck.com/showpos...&postcount=372

http://forum.calgarypuck.com/showpos...&postcount=682

I was pretty much the same, I figured rates would go up a bunch after all the money printing central banks did in 2008/2009. But rates are still wicked low, and the locked in fixed rate mortgage I took in 2008 turned out dramatically worse over the 5 years than the variable choice.

[Calgary14]

Originally Posted by Slava

Not that I disagree, but is there anywhere that 'consensus view' is stated?

Good point. By consensus I meant what most people I talk to think. The media has no consensus - one day prices are going to rocket up, the next day they are set for a crash. Just goes to show that no one really knows what prices will do for certain

In my opinion the best time to buy is when you can afford it, you can get good financing (ie low interest rate) and a decent down payment. Timing the market can be frustrating

[gladaki]

Originally Posted by Kybosh

I don't think that this crash has taught 20-30 year old people a damn thing. Everyone I know is still using credit like a free pass.

My friend who recently got hired just bought house with his 6 month saving. His account balance is 232$, his 70 percent of pay cheque goes directly for mortgage payment.

[Table 5]

Originally Posted by gladaki

My friend who recently got hired just bought house with his 6 month saving. His account balance is 232$, his 70 percent of pay cheque goes directly for mortgage payment.

How would you even get a mortgage in that situation? De he use one of those "no money no problem" used-car lots?

[gladaki]

Originally Posted by Table 5

How would you even get a mortgage in that situation? De he use one of those "no money no problem" used-car lots?

He earn close to 75k$..so i guess getting mortgage is not a problem for him. Also he has no other debts