First Time Home Buyer - Calgary

[ken0042]

Just did a look on MLS and found a number of Condos within walking distance to downtown for <$200K for a 2 BR.

Just make sure you do your homework. Condo fees, reserve fund, building maintenance history (does it need a new roof next year?), and construction methods. I seem to recall something about post tension construction done in the 70's and 80's as being bad.

[Flames_Gimp]

man i would never pay 200k for a condo. I'll take my 2200sq. ft of finished space and a big backyard over a condo every day of the week.

[Aarons13]

Originally Posted by Frankster

I had a lot of misgivings about moving up to that area (Falconridge), but love it now that I'm there.

hahaha... i've lived in falconhood my whole life.

Same as Frank, i bought a year ago in the "new" part of falconridge. I got a sweet deal @ 143K (it was valued by the city at 150K). Anyways, there are houses on my street that have gone anywhere from 180K to the most recent listing at 249K!!!! It is a crazy market for sure.

Like a few others have said, buy what you can afford. It is only going to increase in price and at least its a start.

[tvp2003]

Interesting thread... I'm in the same boat, moving (back) to Calgary in April and looking to buy...

[Mike Oxlong]

I would get in as soon as possible. For the next year or so until the home builders are going to be able to catch up and until we can bring enough labour into the city to keep up with the demand to build the homes the prices are going to continue to rise quickly.

With so many people moving here the builders just simply can't keep up to the demand right now and it is driving prices up very quickly. Plus so many people are making so much money that they are willing to pay these crazy prices.

The CMHC predicted the average price of a home in Calgary this year would go up by 12% I believe they said. They are generally very conservative as well. I wouldn't be surprised with close to 20% this year.

If you aren't in a huge rush to move I would buy a place in a developing area. It take s10-12 months to actually build the house or the condo. That means you get 10-12 months of appreciation on that place for free. I bought a condo in the new Bridges development when they first went on sale for $185,000. I could now sell it for about $250k with no problem.

Don't wait any longer to get in the market. The prices are going to continue to rise and they won't be coming back down to 2003 prices. The longer you wait the more it is going to cost you.

If you can wait until October I will have a townhouse for sale in Braeside. About 1700 square feet with a single attached garage. Close to Southland LRT. Might be in your price range. PM me if you are interested.

[SeeGeeWhy]

Check out a book called Sell Now. It is talking about the insane amount real housing prices in north america (and the world, really) have increased in the last 5 years compared to normal, and how it would be smart for many people to take their profits now and rent until things stabilize. It also draws comparisons to what the Japanese housing market was doing before their economy went into deep recession... the results are pretty startling.

It all depends on what you want to do, and what you believe tha market will do.

Will you be able to pay for a house that is at the very limit of your mortgage, even if interest rates increase and the bottom of the market falls out? Both are very possible, many say are inevitable. The last time it happened in Calgary also happened to coincide with a big boom/bust cycle with oil prices.

[looooob]

Originally Posted by SeeGeeWhy

Check out a book called Sell Now. It is talking about the insane amount real housing prices in north america (and the world, really) have increased in the last 5 years compared to normal, and how it would be smart for many people to take their profits now and rent until things stabilize. It also draws comparisons to what the Japanese housing market was doing before their economy went into deep recession... the results are pretty startling.

It all depends on what you want to do, and what you believe tha market will do.

Will you be able to pay for a house that is at the very limit of your mortgage, even if interest rates increase and the bottom of the market falls out? Both are very possible, many say are inevitable. The last time it happened in Calgary also happened to coincide with a big boom/bust cycle with oil prices.

you raise some interesting points...however the Calgary market may be at a different stage right now than the US or Toronto real estate markets

that's not to say that it's never going to bust, of course, but there might be more years of upswing in it yet

anyone else's thoughts??

[SeeGeeWhy]

People are looking at the market right now saying "oh man, my POS house that I bought for 190K can sell for 260K easy" but the problem is that if they sell and are looking to buy (because once you own, it's hard to go back to renting for some reason), they are only moving sideways. What are they going to be able to buy that makes the profit they just realized worthwhile?

Everyone would love to have their own place, with a big yard and everything. There is such a thing called being mortgage poor. You have all these nice things and the 'status' that comes with it, but you are in debt out your ass and will always have to be working for a living.

If you must stay in Calgary to work/live, why not rent and dedicate the difference that you would be spending on a mortgage to other investments? You stay within your means, and you are putting your money away into vehicles that are much easier to access when they turn a profit.

[looooob]

Originally Posted by SeeGeeWhy

People are looking at the market right now saying "oh man, my POS house that I bought for 190K can sell for 260K easy" but the problem is that if they sell and are looking to buy (because once you own, it's hard to go back to renting for some reason), they are only moving sideways. What are they going to be able to buy that makes the profit they just realized worthwhile?

Everyone would love to have their own place, with a big yard and everything. There is such a thing called being mortgage poor. You have all these nice things and the 'status' that comes with it, but you are in debt out your ass and will always have to be working for a living.

If you must stay in Calgary to work/live, why not rent and dedicate the difference that you would be spending on a mortgage to other investments? You stay within your means, and you are putting your money away into vehicles that are much easier to access when they turn a profit.

I agree with you, selling your home simply for the sake of 'making money' but in fact buying a bigger home and going into more mortgage debt doesn't make much sense

I'm not as pessimistic on home ownership as you are, but it's probably not for everyone....

[SeeGeeWhy]

Originally Posted by looooob

you raise some interesting points...however the Calgary market may be at a different stage right now than the US or Toronto real estate markets

that's not to say that it's never going to bust, of course, but there might be more years of upswing in it yet

anyone else's thoughts??

Certainly. Obviously it seems like what is happening in Calgary (Alberta as a whole, really) cannot be sustained. Materials are stretched too far, labour is in high demand, supply is much lower than demand and prices are going through the roof. If prices are outpacing inflation consistently, it cannot be sustained, that is a fundamental truth of economics.

However, if the economy can stay robust... say for the next 5-6 years (to coincide with most of the major oilsand projects coming on production), then maybe it is possible... but who knows what effect such a trend will have on the rest of the economy?

Banks are driving the cost of housing because they are willing to give out these ridiculous mortgages with low rates and no money down. If anything ever happened to prevent these people from paying their mortgage, the banks will not have any sympathy and will foreclose on the property. It will be a fiasco.

Toronto is a little more stable because it has more than one industry that can support a population, unlike Alberta which relies heavily on energy.

Look at Nova Scotia, that region has been depressed for years because fishing and shipping have gone to the pooper. If you really want to buy land that has potential to be worht something, go out there.

Everyone will tell you, if it is profit you want, buy low and sell high. Calgary's markets have never been higher... so why buy now if it is value that you are looking for?

If you're simply looking for a place to live... well that's another matter. If that is all you're looking for then you would be a fool to pay the prices that are out there today to buy. Nothing wrong with paying rent to liveand directing the difference elsewhere.

That being said, there will always be mini-markets within the greater markets that will have their own trends. Real estate is quite an interesting game to play.

[SeeGeeWhy]

Originally Posted by looooob

I agree with you, selling your home simply for the sake of 'making money' but in fact buying a bigger home and going into more mortgage debt doesn't make much sense

I'm not as pessimistic on home ownership as you are, but it's probably not for everyone....

Hahaha! I'm not pessimistic on home ownership. My fiancee and I own a condo on 14th ave and it's pretty good, but we are worried about the hot market... and concerned that we are not using our money as effectively as possible.

We don't need a big place for kids, pets, or personal reasons. We barely have the place we have furnished! I'm just not convinced that home ownership is the place I need to be right now.

But then again, circumstances might dictate that it is right for you. There is never such a thing as a one answer solution.

[ken0042]

I looked at interest rates when I bought my house. Right now I'm paying about 5%, but I could still afford up to 8%. 9-13% and I'd need to get a room mate. I just can't see them going much higher than that in the next 10 years.

I have also heard of other people saying that they are selling now and going to rent. However the stories of people buying a house for more than the asking price are less comon, and I'm hearing more anicdotes about people renting a place for more than the asking price.

[photon]

That's true, if you are talking about your personal residence you don't really look at it as an investment because as you say if you sell you have to buy something else. It's the second and other properties where you can actually take a profit. Or if you are moving out of Calgary to somewhere where prices are a lot lower.

But one thing that owning does do over renting is it does give you the ability to pull equity out to invest in other things. So instead of investing $300 / month in an investment making 8% to make an extra $288, if you had a home and had been riding this increase you could pull out $100,000 and invest that into something that makes 8%.

Sure you pay interest on that $100,000 but that's tax deductable and you'd be making a lot more return your money. If you made 8% on the investment and it cost 5% to borrow it.. I'd rather make $3000 than $288...

Rather than renting you can also do a HELoC and pay interest only and use that difference between the interest payment and your normal mortgage payment to invest in other more liquid vehicles. Or into other real estate that you can flip for profit.

I don't want my money going to an investment, I want my money going to pay for interest on borrowed money that goes into an investment.

[photon]

Originally Posted by SeeGeeWhy

Toronto is a little more stable because it has more than one industry that can support a population, unlike Alberta which relies heavily on energy.

That's one thing I've read that is very different from the early 80's.. Calgary's economy isn't nearly dependant on energy now as it was then.

So if (when?) energy tanks it'll be bad but not like it was in the 80's where people were walking away from mortgages and stuff.

At least that's what I read. It's all a big guessing game.

[mbrown]

Originally Posted by photon

That's one thing I've read that is very different from the early 80's.. Calgary's economy isn't nearly dependant on energy now as it was then.

So if (when?) energy tanks it'll be bad but not like it was in the 80's where people were walking away from mortgages and stuff.

At least that's what I read. It's all a big guessing game.

The chamber of commerce states that energy only accounts for 8% of the total economy. It was over 30% in the '80's. There will not be a crash like that again. (barring a new NEP).

[mbrown]

Oh, I bought my place 1.5 years ago for $200k and my neighbours place is on the market for $345k. unreal! But it's going to keep going up. Love to get a good job in the maritimes. I'd be mortgage free back there and in a nicer home. But the hard part os the GOOD job part.

[troutman]

Calgary is a bad market for purchasers right now. A realtor this morning told me about a home just sold in Montgomery (the home was nothing special). The house was listed for $320,000.00, and sold for $390,000.00 in less than 24 hours. People are making competing offers, without the usual purchaser's conditions.

[looooob]

Originally Posted by troutman

Calgary is a bad market for purchasers right now. A realtor this morning told me about a home just sold in Montgomery (the home was nothing special). The house was listed for $320,000.00, and sold for $390,000.00 in less than 24 hours. People are making competing offers, without the usual purchaser's conditions.

was that the one in the paper that was being auctioned?

[ken0042]

Originally Posted by troutman

People are making competing offers, without the usual purchaser's conditions.

A girl I work with made an offer to purchase a place that had just com onto the market; and the only condition she made was subject to viewing. Her offer was rejected because somebody else had made an offer without viewing the property.

That's just crazy.

[Eagle Eye]

Originally Posted by ken0042

A girl I work with made an offer to purchase a place that had just com onto the market; and the only condition she made was subject to viewing. Her offer was rejected because somebody else had made an offer without viewing the property.

That's just crazy.

Exactly why I was saying that it is probably not a good time to buy (in areas that have a high demand). You really think that that people aren't offering sellers more than thier asking price if you see things like that.^^