Calgary Real Estate predictions?

[peter12]

So is rent going to go down at all?

[Bobblehead]

Originally Posted by peter12

So is rent going to go down at all?

Not if there is still demand for rent, and Tron's post implies there is still demand.

[burn_this_city]

Theres demand for reasonably priced rentals. I see a lot of "landlords" who are renting properties for much more than is realistic.

[peter12]

Originally Posted by Bobblehead

Not if there is still demand for rent, and Tron's post implies there is still demand.

Oh yeah, I just saw that. But that would seem to apply to houses, what about condos and apartments? Supply has increased to a point where I would assume there would be some rollback.

[Tron_fdc]

Yeah, I think there are a lot of condos for rent for cheap. Especially downtown where people were buying little POS places and renovating them to flip. From what I have been told by a few people looking to rent, if you look hard enough you can find new condos where the owner is renting for less than his cost (they're losing money) because they can't sell, and they need to stop the bleeding. There are still a lot of people trying to cover cost on places they overpaid on, and they're the ones sitting empty right now.

I bought a house almost 14 months ago as a rental, and I have no problem covering my cost. I actually make a few bucks every month, which is fine by me, as I'm not looking to make a living on rental income. I just found it strange how easy it was to find a tenant. Either there are a lot of people still trying to sell their houses and the glut of rentals is still yet to happen (they all hit the rental pool when the houses don't move), I'm underpricing my rental, or the new house market isn't as bad as the condo market. Yet.

[Cowboy89]

Originally Posted by Claeren

Either way it drops back to the long term historical norms. (<Which should be a no-brainer, that is why they are called 'long term historical norms.' Greed and/or fear seem to blind some people to that though...)


Claeren.

Arguing for mean reversion is hardly a bold statement, or something likely to garner attention, but in the long run usually is correct. Too many people get worked up about newspaper clippings, when in reality the newpaper is actually pro-actively looking for outlier "analysts" to support the newsworthyness of their story.

[pepper24]

Originally Posted by automaton 3

The average MLS sale price for a Calgary residential property in August was eight per cent less compared with a year ago - the biggest decline in the country, according to statistics released today by the Canadian Real Estate Association.

http://www.canada.com/calgaryherald/...b-ab33948702ae

Makes sense, since Calgary was one of the better performers over the past few years in the country. If you get something like 60% gains in a year, reasoning and sound economics will tell you that you'll eventually have to give a chunk of that back. What goes up can drop just as quickly so we're lucky so far.

[Wookie]

Just thought I'd bring up, my area of townhouses in NW Calgary, I bought September of last year 07. Felt like I wasn't buying something outrageous, felt it was a good price, not too many units, had some unique factors, good location etc. Anyway, one just sold for the same price I bought mine for. A few others listed for above both mine and the one just sold. All are leaving for normal moving reasons vs. liquidating, speculative purchase, flipping etc.

I think that can be a positive. In this market, to be even, shows that not everything was a bad buy, not every decision was a bad one, sure, maybe my area will go down still. But I don't think everyone who purchased in the last 12 - 24 months made a bad decision like a lot of people want them to believe. Not calling anyone out.

[AFireInside]

Originally Posted by Wookie

Just thought I'd bring up, my area of townhouses in NW Calgary, I bought September of last year 07. Felt like I wasn't buying something outrageous, felt it was a good price, not too many units, had some unique factors, good location etc. Anyway, one just sold for the same price I bought mine for. A few others listed for above both mine and the one just sold. All are leaving for normal moving reasons vs. liquidating, speculative purchase, flipping etc.

I think that can be a positive. In this market, to be even, shows that not everything was a bad buy, not every decision was a bad one, sure, maybe my area will go down still. But I don't think everyone who purchased in the last 12 - 24 months made a bad decision like a lot of people want them to believe. Not calling anyone out.

Oddly enough from what I've seen (I'm involved in looking at properties everyday, no I am not a realtor), townhouses for the most part have not come down as much as other properties. At least the new ones, I'm not sure why this is. There were houses I looked at 6 months ago that are down 50,000 but townhouses I looked at during that same period are still at the same price. Condo's and houses are taking the beating right now.

There have been houses I've looked at that were purchased not even a year ago, that are down 30,000 - 50,000 from the purchase price. Pretty big loss for one year...

[metal_geek]

From what I can tell prices seem to be about even to what they were 18 months ago... 8-9 months ago the prices seem to have peaked, and have been on the decline since. That doesn't mean they are at the bottom or they won't go up tomorrow. Seems that the market is bringing the prices back to more reasonable levels in a fairly controlled way.

If you see a property that fits, you like it and more importantly you can afford it you don't have to wait for the market to hit bottom. You can definatly be more picky but houses are still moving expecially in the "entry level" houses market. (1200 -1500 sf)

I'm also seeing alot more movement out of people from out of province, seems that quite a few people buying the entry level stuff are from BC, Ont and Qu. I agree with wookie in that it's not all doom and gloom, but there are alot of people who purchased in that 18 month range that are on the Gloom side of the scale right now.

[Nancy]

There seemed to be very little movement on the median price posted on the CREB website this month, though we'll have to wait to see what the official numbers come out as. I hear the market is recovering somewhat from the dismal summer.

[mykalberta]

I am not so intuned with the market as I would like, but I know a guy I work with just bought a ground level condo (1050 sq feet) apartment reno for $350k. To me that seems that at least the condo market isnt dropping like a lead weight.

I am not in the financial position for a house in Calgary so condos are what I look at.

[Scrambler]

nm

[Winsor_Pilates]

Condos are still selling pretty slow. I expect a buyers market for the next 6 months to 1 year at least.

If you're buying to live in, I think it's a good time as you can look around, make offers and take your time to find the right place. I wouldn't invest in condos for investments sake right now in Calgary.

The US financial crises has a pretty big effect on the condo market because of the high percent of investors in the condo game. When they tighten up their wallets, the market feels it, and that's what is happening right now.

[Burninator]

Canadian housing market faces U.S.-style bust: Shiller

The Canadian housing market could face a similar housing bust to the United States, particularly in more bubbly markets as Vancouver and Calgary, said Robert Shiller, the University of Yale professor who predicted both the 1990s stock market boom and bust and the US housing slump.

Mr. Shiller, co-founder of the S&P Case/Shiller Home Price Index, said psychology is the primary driver of bubbles and it appears that Canada has been caught up with home buying fever just as the United States and other countries around the world.

Asked whether that meant Canada could face a similar bust Mr. Shiller said: "Yes, especially in places that went up a lot like Vancouver and Calgary. I don't think Toronto has been quite as extreme."

http://www.financialpost.com/story.html?id=853094




Alberta Lead Slide in Housing

Alberta led all provinces in Canada with the biggest decrease in the average sale price for an existing home in August compared with a year ago, according to the Canadian Real Estate Association.

Statistics released Tuesday by the association show the average MLS sale price in Alberta dipped by 5.2 per cent to $343,148. The only other province experiencing a year-over-year price decline was British Columbia at 4.1 per cent to $421,685. At the national level, prices in August dropped by 4.6 per cent from a year ago to $290,347.

http://www.canada.com/calgaryherald/...e-4f20cccf4f06

[metal_geek]

Originally Posted by Burninator

Canadian housing market faces U.S.-style bust: Shiller

The Canadian housing market could face a similar housing bust to the United States, particularly in more bubbly markets as Vancouver and Calgary, said Robert Shiller, the University of Yale professor who predicted both the 1990s stock market boom and bust and the US housing slump.

Mr. Shiller, co-founder of the S&P Case/Shiller Home Price Index, said psychology is the primary driver of bubbles and it appears that Canada has been caught up with home buying fever just as the United States and other countries around the world.

Asked whether that meant Canada could face a similar bust Mr. Shiller said: "Yes, especially in places that went up a lot like Vancouver and Calgary. I don't think Toronto has been quite as extreme."

http://www.financialpost.com/story.html?id=853094




Alberta Lead Slide in Housing

Alberta led all provinces in Canada with the biggest decrease in the average sale price for an existing home in August compared with a year ago, according to the Canadian Real Estate Association.

Statistics released Tuesday by the association show the average MLS sale price in Alberta dipped by 5.2 per cent to $343,148. The only other province experiencing a year-over-year price decline was British Columbia at 4.1 per cent to $421,685. At the national level, prices in August dropped by 4.6 per cent from a year ago to $290,347.

http://www.canada.com/calgaryherald/...e-4f20cccf4f06

More sensational media reporting... Try to give this guy come crediablility, then name 2 big markets and pass the article to your boss..

You'd have to be stupid to not see the correction right now, and that it's correcting more in places that went up alot. Calgary/Edmonton had alot of in migration from other parts of the country and it drove up demand. I think the factors that drove up alberta's market were not the same factors that drove up some of the other markets. Alberta's market was undervalued to start relative to the national average. Job prospects are still strong in alberta compared to most other places in the country, and I don't see alberta becoming any less attractive then it was before, especially considering a surplus of housing, and greater afordability.

There are too many factors involved to just lay blanket statments and talk about largest declines. All it does is create drama and scare people into thinking we are the US. COMPLETLY different circumstances...

[Claeren]

Originally Posted by metal_geek

More sensational media reporting... Try to give this guy come crediablility, then name 2 big markets and pass the article to your boss..

You'd have to be stupid to not see the correction right now, and that it's correcting more in places that went up alot. Calgary/Edmonton had alot of in migration from other parts of the country and it drove up demand. I think the factors that drove up alberta's market were not the same factors that drove up some of the other markets. Alberta's market was undervalued to start relative to the national average. Job prospects are still strong in alberta compared to most other places in the country, and I don't see alberta becoming any less attractive then it was before, especially considering a surplus of housing, and greater afordability.

There are too many factors involved to just lay blanket statments and talk about largest declines. All it does is create drama and scare people into thinking we are the US. COMPLETLY different circumstances...

You sound exactly like bulls in Florida, Phoenix, Las Vegas and California did about 2 years ago.

Income is a huge factor in home prices BUT income and employment will be easing significantly for the next ~5 years. Home prices are also about 30% above what income suggests they should be.

As for the other factors you mention, they only matter when land is restricted (which it is not in Calgary) and/or where there is less CAPACITY to build than there is demand. Since capacity has grown to reach and then exceed demand prices (like they would with any consumer product) should no longer grow.

I see it already with new woodframe condos dropping and dropping their prices. Why would I buy a 2 year old condo in the suburbs for $320k (its price at peak) when I could buy a brand new one for $209k just as far from downtown? And those prices will keep dropping as well....


But keep on hoping, maybe hope will hold those prices up?


Interestingly, the industry lists price drops as one year declines but the market peaked more than one year ago. So when they say prices are down 5.6% they could really be down 12% since peak.



Claeren.

[AFireInside]

Originally Posted by metal_geek

More sensational media reporting... Try to give this guy come crediablility, then name 2 big markets and pass the article to your boss..

You'd have to be stupid to not see the correction right now, and that it's correcting more in places that went up alot. Calgary/Edmonton had alot of in migration from other parts of the country and it drove up demand. I think the factors that drove up alberta's market were not the same factors that drove up some of the other markets. Alberta's market was undervalued to start relative to the national average. Job prospects are still strong in alberta compared to most other places in the country, and I don't see alberta becoming any less attractive then it was before, especially considering a surplus of housing, and greater afordability.

There are too many factors involved to just lay blanket statments and talk about largest declines. All it does is create drama and scare people into thinking we are the US. COMPLETLY different circumstances...

Thats just it, Alberta does not have greater affordability. Also last I heard there are more leaving Alberta right now, at least those already from Canada.

My gf and myself both make good livings, with very secure jobs. We have no children, and we can't afford bottom of the barrel. When I say we can't afford I mean we can't pay for something reasonably, I'm not talking a 40 year mortgage with nothing down. If you are stretched with a 40 year nothing down, in my opinion you can't afford it. Which is going to be the problem.

Don't forget, 40 year mortgages with no money down are gone in 2 weeks. Thats going to significantly cut into who can buy and decrease the number of buyers. Everyday on MLX listings exceed sales by a 2 to 1 margin in calgary, this has been happening for several months. This is no exageration, most days it ends up being more than 3 to 1 in terms of listings to sales. Common sense tells you what will happen.

Combine many more listings, plus the buying population decreasing significantly, prices look to drop. When home owners can't sell at their asking price because a) people can't afford because they can't get 40 year nothing down mortgatges and b) there are too many listings, it doesn't look good.

Who knows, real estate is one of those things, my gf and myself were looking in early january/feb, but between my work and research I decided to hold off for at least 1 - 2 years. If prices stay the same or increase then I don't want to own property here, simple as that, however I don't think that will be the case.

Look at the U.S. subprime mortgages are the same as 40 year mortgages with no money down.. Its going that way...

[photon]

Originally Posted by AFireInside

Look at the U.S. subprime mortgages are the same as 40 year mortgages with no money down.. Its going that way...

Just wanted to say that those are not the same things.. subprime refers to the borrower; i.e. their credit risk. A huge percentage of mortgages in the US being given out were subprime (lending to people who really shouldn't qualify for a mortgage but doing it anyway based on the increase in value of the property or something like that), like 25% or higher..

In Canada hardly any mortages are subprime, less than 2% I've heard some say.

[Draug]

Originally Posted by AFireInside

Don't forget, 40 year mortgages with no money down are gone in 2 weeks.

40 yr amortizations will be gone, but there are still going to be 35 yr ones. That shouldnt make too much difference in terms of the number of buyers.

If I own property anywhere in Canada, I want it to be in Calgary. Our economy is the strongest in all the country and will handle a downturn the best, I would think.