Calgary Real Estate predictions?

[ranchlandsselling]

Originally Posted by OMG!WTF!

Not sure I get the 25k number. But it's only on the portion above 500k. So if you buy a house for 750k, your down payment would have to be 50k (500k @ 5% plus 10% on 250k) as opposed to 75k (750k @ 10%). I don't think it will have a huge effect.

Didn't realize it was it was 10% only on the portion above.

Meh... this is kind of a half measure in that case. Honestly I'd rather see them knocking it up 1% every year for 5 years across the board until the DP is at 10% for everything.

[Slava]

Originally Posted by OMG!WTF!

Wouldn't it be more protection for the insurers than anything? Banks are already protected through CMHC. Accordingly, I wonder if CMHC will be raising their rates since the amount they charge is dependent on the LTV of the loan. So this will cause a drop in CMHC revenue. Or will they leave their fees and account for it via less risk?

Yeah I guess CMHC, that makes sense. Regardless though, it's not designed to take buyers out of the market. Its designed to make people not walk away from their investment of cash if things get ugly.

[Tron_fdc]

Wasn't sure where to put this, but I read it this AM.

I recall people walking away from mortgages in the 80's, but I didn't realize it was without recourse.

http://www.cbc.ca/beta/news/canada/c...sing-1.3430867

Alberta is the only Canadian province to broadly offer non-recourse residential mortgages. Those loans with at least a 20 per cent down payment and thus are not insured by the Canada Mortgage and Housing Corporation (CMHC).

If you walk away, you lose your home, but otherwise have no personal liability. Elsewhere in Canada, your lender can take you to court and seize other assets, such as RRSPs, vehicles, and even garnish your wages.

Is that true?

[Red]

Originally Posted by Tron_fdc

Wasn't sure where to put this, but I read it this AM.

I recall people walking away from mortgages in the 80's, but I didn't realize it was without recourse.

http://www.cbc.ca/beta/news/canada/c...sing-1.3430867

Alberta is the only Canadian province to broadly offer non-recourse residential mortgages. Those loans with at least a 20 per cent down payment and thus are not insured by the Canada Mortgage and Housing Corporation (CMHC).

If you walk away, you lose your home, but otherwise have no personal liability. Elsewhere in Canada, your lender can take you to court and seize other assets, such as RRSPs, vehicles, and even garnish your wages.

Is that true?

Yup.

[ranchlandsselling]

Originally Posted by Tron_fdc

Wasn't sure where to put this, but I read it this AM.

I recall people walking away from mortgages in the 80's, but I didn't realize it was without recourse.

http://www.cbc.ca/beta/news/canada/c...sing-1.3430867

Alberta is the only Canadian province to broadly offer non-recourse residential mortgages. Those loans with at least a 20 per cent down payment and thus are not insured by the Canada Mortgage and Housing Corporation (CMHC).

If you walk away, you lose your home, but otherwise have no personal liability. Elsewhere in Canada, your lender can take you to court and seize other assets, such as RRSPs, vehicles, and even garnish your wages.

Is that true?

Yup!

What the article points out which wasn't the case back then however, is this:

The one main difference between now and the 1980s is that now credit bureaus have access to mortgage information. If you make a strategic default, it will follow you.

"You're going to have a big black mark on your credit bureau for the next six to seven years" said Dan Heon, a broker with the Canadian Mortgage Team. "So just handing the keys back and saying, 'I'm going to move to Saskatchewan where the jobs are,' and think that you're going to start you life up again and borrow money, it isn't going to happen."

[ranchlandsselling]

I'm still amazed at some of the pricing going on out there.

I see a townhouse listed around $385 today that I know the exact same floor plan sold when things were running up in 2013 for $365. It's insane. Let's say that there's $20k in reno's done, and a $20k difference is applicable assuming ALL THINGS BEING EQUAL.

They're not. At all. It's a vastly different Calgary than it was 18 months ago and 36 months ago.

Looking at that article, they state that appraisals on million plus homes are coming in significantly cheaper. I've watched a ~$1.2 million lists that was bought for $~1.15 late spring, early summer 2014. It's listed higher and has been for about 10 months.

I bought in 2012 for what I thought was a good deal, I'm content assuming that in this market I'd break even or lose money. But I've seen houses listed in my neighbourhood in worse locations, that are in awful condition comparatively, bad layouts and they want $50-100k more than I paid. It makes me want to smack the listing agent. This isn't an "I think my house is better than that house" kind of thing that every home owner has this is a "I wouldn't live in that house" and they want more than I paid for my house by $100k in a vastly worse market with no signs of turning around.

It's fine to try to get the max for your client, yourself, etc. But I'm so surprised at times with some of the things witnessed in the real estate market. I guess now is the time a good realtor will differentiate themselves from all the rest. If you've got a listing for 6-12 months you're not getting paid. The agent that lists for a reasonable price will get paid, assuming the client doesn't go with the realtor who lists higher. Two agents, one says "$500k", the other says "$450k" it'd be hard to not go for $500k.

Tough market.

[Tron_fdc]

Yep. A realistic realtor is going to make the difference between sitting on the market for 12 months and 2 months. How they market, how they list, the price they use.... it's now time some of the realtors put in the hard miles on their listings.

My neighbour just listed for 1.2 million. I know for a fact he has less than a million total into his house (it's a year old) and although it's a swanky pad with an insane amount of upgrades, I put his chances of selling in the 0-3% range. There are about 10 other listings in my 'hood that are 800+, and NOTHING is selling. Trying to make a buck is totally unrealistic right now.

Unless you are willing to break even or lose, you're not making money anytime soon in this market. It's not Flip this house on A&E.

[Kavvy]

Was at an open house in Elbow park on the weekend. Listed for $1,325,000, Realtor said that it was sold a couple years ago for $1,500,000. Untouched by the flood, and I think sold after the flood.

Gotta feel bad for whomever is likely being forced out here, it sucks.

[accord1999]

I believe under Canada/most provincial laws, RRSPs have decent protection against creditors.

[DoubleF]

Originally Posted by ranchlandsselling

I'm still amazed at some of the pricing going on out there.

I see a townhouse listed around $385 today that I know the exact same floor plan sold when things were running up in 2013 for $365. It's insane. Let's say that there's $20k in reno's done, and a $20k difference is applicable assuming ALL THINGS BEING EQUAL.

They're not. At all. It's a vastly different Calgary than it was 18 months ago and 36 months ago.

My understanding is that the demand and interest in the sub $500k homes is still high which allows them to not suffer as greatly in the price adjustment. A $500k plus home needs to drop its price to increase the pool of suitors drastically to find a buyer.

For instance, the sub $500k homes/starter homes have interest from new home buyers, individuals downsizing/downgrading for practical purposes/ability to afford a home, new immigrants/new to the city, multi home owners etc. Afford ability allows for the price to fall slower. The lower price doesn't need to go lower for a hit in a pool of potential suitors.

The average price will still fall as the floor doesn't move as much, but the top prices drops dramatically.

[Bend it like Bourgeois]

Originally Posted by Tron_fdc

Yep. A realistic realtor is going to make the difference between sitting on the market for 12 months and 2 months. How they market, how they list, the price they use.... it's now time some of the realtors put in the hard miles on their listings.

My neighbour just listed for 1.2 million. I know for a fact he has less than a million total into his house (it's a year old) and although it's a swanky pad with an insane amount of upgrades, I put his chances of selling in the 0-3% range. There are about 10 other listings in my 'hood that are 800+, and NOTHING is selling. Trying to make a buck is totally unrealistic right now.

Unless you are willing to break even or lose, you're not making money anytime soon in this market. It's not Flip this house on A&E.

In my neck of the woods it's the same. I live in the slums not the ritzy area but a lot of the >750 k homes are still listed at what I'd call 2014 prices. There is a pretty nice house at 900 that's been on the market for 3-4 months at least. Another just popped up at 950

[ranchlandsselling]

Originally Posted by DoubleF

My understanding is that the demand and interest in the sub $500k homes is still high which allows them to not suffer as greatly in the price adjustment. A $500k plus home needs to drop its price to increase the pool of suitors drastically to find a buyer.

For instance, the sub $500k homes/starter homes have interest from new home buyers, individuals downsizing/downgrading for practical purposes/ability to afford a home, new immigrants/new to the city, multi home owners etc. Afford ability allows for the price to fall slower. The lower price doesn't need to go lower for a hit in a pool of potential suitors.

The average price will still fall as the floor doesn't move as much, but the top prices drops dramatically.

Oh, I fully understand how that starter/midrange price range works. But, assuming someone bought a house 3 years ago, assuming the economic environment was exactly the same, there's really not much reason for a price increase beyond annual inflation. So, with everything being equal sure, some small inflationary gains.

But we're not equal. We're so gosh darn unequal it borders on ludicrous that the prices would be up over 3 years. I think it's stupid that a realtor would likely suggest me listing my place for $75k more than I paid.

[Calgary14]

I can't imagine anyone willing to lineup to buy a condo in Legacy, especially in this market, but apparently it's happening (according to the developer). http://calgaryherald.com/life/homes/...s-under-200000

[corporatejay]

Originally Posted by ranchlandsselling

Oh, I fully understand how that starter/midrange price range works. But, assuming someone bought a house 3 years ago, assuming the economic environment was exactly the same, there's really not much reason for a price increase beyond annual inflation. So, with everything being equal sure, some small inflationary gains.

But we're not equal. We're so gosh darn unequal it borders on ludicrous that the prices would be up over 3 years. I think it's stupid that a realtor would likely suggest me listing my place for $75k more than I paid.

Or it's a case of "after I pay my realtor fees I can't pay off my mortgage if I sell it for less than X"

That's why.

[corporatejay]

Originally Posted by Calgary14

I can't imagine anyone willing to lineup to buy a condo in Legacy, especially in this market, but apparently it's happening (according to the developer). http://calgaryherald.com/life/homes/...s-under-200000

120k for a brand new condo is a steal. That's like a 600 dollar mortgage. You can't live anywhere d that cheap.

[ranchlandsselling]

Originally Posted by corporatejay

Or it's a case of "after I pay my realtor fees I can't pay off my mortgage if I sell it for less than X"

That's why.

Tend to disagree, that would explain (to me) why prices aren't below what they paid. Not substantially above.

[Mr.Coffee]

We'd like to upgrade, but when we look at what people are asking its beyond comprehension. Can't wait for some softening to happen (actually, just hoping it does happen).

[Canehdianman]

I'm watching like a vulture as well. I've definitely noticed some softening in the 700k-800k houses already. Nothing is selling so prices are starting to come down.

None of the houses I've 'favourited' on mls.ca have sold in over a month.

[InBurkeWeTrust]

Looking into upgrading my house right now and seeing how much I can push new builders to move on their pricing. I've seen at best 55k pre-negotiation on 2400 sq ft + houses.

I wonder if I can push them another 10-15k


Also, how have you guys been finding the 1500sq ft, single home, detached garage market? I was thinking that these houses would be more affordable and therefore the market for them is still decent, or will continue to be decent when my new build finishes

[Tron_fdc]

I'm curious how much our market is affected by China. I know it's a big "problem" in Vancouver, but has it trickled into Calgary as well?

http://www.theglobeandmail.com/repor...ticle26683767/

Any realtors want to chime in?