What is with Real Estate in Airdrie

[Claeren]

Originally Posted by photon

Ah ok I see what you mean, and in general I agree. There are things which will take a property and permanently alter it's long term market value (change of use, zoning changes, that sort of thing).

I agree, and that is why i think a lot of downtown and area real estate is still a good buy.

What concerns me is when suburban property (condo's especially, but houses also) roughly matches city core property prices. There is ZERO long term scarcity in a city like Calgary for that type of property therefore its long term value is only for its use (as a dwelling).

I have no problem paying (close to?) current prices for Cresent Heights or Bankview, etc. It is when you are in a farmers field that i get nervous about inherient worth.

Putting it another way, few other cities in North America hold their prices from their core to their perifery as well as Calgary does. All of the comparative cities (or larger) have high downtown prices but none are like Calgary when standing in the middle of no where an hour from the core. That should tell people about something when paying $500,000 for one of those homes.



Claeren.

[DementedReality]

Originally Posted by Claeren

What?

If you buy high and then sell on the way down you lose a LOT of money.

The same leveridge that makes so many people so much money on the way up loses people so much money on the way down. It is why people throw themselves off buildings when real estate prices drop....




Claeren.

i bought my house in 1997 ... i want to upgrade now ...

if i used your advise, i wouldnt move because the houses are over valued. but isnt my house over valued, meaning it doesnt matter if i sell it and buy a new one ?

by my math, my debt level wont change, just my address which will be in a newer and nicer building.

so will it matter if i sell and buy in a down market?

[Incinerator]

Originally Posted by DementedReality

i bought my house in 1997 ... i want to upgrade now ...

if i used your advise, i wouldnt move because the houses are over valued. but isnt my house over valued, meaning it doesnt matter if i sell it and buy a new one ?

by my math, my debt level wont change, just my address which will be in a newer and nicer building.

so will it matter if i sell and buy in a down market?

If you bought in 1997, no, in fact, you'd be a hundred miles ahead of everyone else if you stick to the same price range as your current house.

What Claeren's talking about are the people who bought a suburban home in Feb '07 and have now decided that they want to move, then they'd lose their shirt and then some. Which I'd agree.

[Claeren]

Originally Posted by DementedReality

i bought my house in 1997 ... i want to upgrade now ...

if i used your advise, i wouldnt move because the houses are over valued. but isnt my house over valued, meaning it doesnt matter if i sell it and buy a new one ?

by my math, my debt level wont change, just my address which will be in a newer and nicer building.

so will it matter if i sell and buy in a down market?

Oh, yeah, if you only own one house and the loss is not leveridged against you then it is fine.


The risk there that people have been running into lately is building a home at a price 6-months ago and then having to move in today.

So you might have paid $500,000 for a Royal Oak home now only worth $450,000 at the time you get to move in. That is not a huge deal in itself because you think, "Oh we will just live there long enough prices will go up before we sell". The problem is if you counted on selling your existing house for $400,000 and it is now worth only $360,000. Now you are looking at a $90,000 swing in what you thought you had in equity, equity people in many cases had maxed out. Add in the possiblity of inflation rising drastically or interest rates rising over the next 10 years (and it will be one of the two) and there are a lot of cost pressures on what was once going to be a simlpe house upgrade. That is without looking at how hard it is now to sell EITHER of your two homes to get out of the mess.

So there is still downside risk.


Also upside too so.... ?



One other aspect is which housing segment you are currently in and thinking of moving into. One might rise 2% (Mount Royal Homes?) while the other is dropping 20% (Evergreen condos?). A move one way can save you tons while the other way could erase tons of equity.


Claeren.

[MacDougalbry]

Originally Posted by Claeren

I agree, and that is why i think a lot of downtown and area real estate is still a good buy.

What concerns me is when suburban property (condo's especially, but houses also) roughly matches city core property prices. There is ZERO long term scarcity in a city like Calgary for that type of property therefore its long term value is only for its use (as a dwelling).

I have no problem paying (close to?) current prices for Cresent Heights or Bankview, etc. It is when you are in a farmers field that i get nervous about inherient worth.

Putting it another way, few other cities in North America hold their prices from their core to their perifery as well as Calgary does. All of the comparative cities (or larger) have high downtown prices but none are like Calgary when standing in the middle of no where an hour from the core. That should tell people about something when paying $500,000 for one of those homes.



Claeren.

I disagree somewhat; if prices tumble in the suburbs, it will affect downtown real estate as well. Even people who love urban life can be tempted out to the suburbs if the price difference is large enough; the money saved can be applied to other lifestyle goals... travel, early retirement, reduced working hours, etc..

[Table 5]

Originally Posted by Sled

Airdrie is the ideal community to raise a small family in. If your looking for the urban condo, cocktails every other night and social night life full of trendy pretenders then stick to downtown Calgary. For the remainder of us folks who live your average life style, spouse, kids and dog(s) this place is great.

The only knock against the city is the selection of restaurants. In the past year it has improved and with the Balzac outdoor mall it should tie up that loose end soon.

Thing is, you can get all that and more from almost any other Calgary community. Aidrie is too big and sterile to have the charm of a small town, but not small/interesting enough to bypass all the drawbacks suburban living.

Never mind the fact the city feeds off of Calgary's economic and transportation networks, and yet fails to pay it's fair share of taxes. The town is more of a leech than anything.

If you're idea of a good restaurant experience is going to the ballzac mall...well, then i think we're coming at things from very different angles. Atleast in Calgary you have lots of nice little family run restaurants to choose from, and don't always have to pack the kids into the car to do it. What's the upside of the mall, ample parking?

[Claeren]

Originally Posted by MacDougalbry

I disagree somewhat; if prices tumble in the suburbs, it will affect downtown real estate as well. Even people who love urban life can be tempted out to the suburbs if the price difference is large enough; the money saved can be applied to other lifestyle goals... travel, early retirement, reduced working hours, etc..

No (well always somewhat, but they are not directly linked), because downtown real estate is (1) finite and (2) improvable.

Far flung suburban property is both infinite (in Calgary's case, not in say, Vancouver's case) and not improvable - thanks to the way those areas are now designed.


Lastly, and i wish i could draw this out, but the further you go from the core the more land you get in every direction with less radius added. So from the center of a circle the amount of land added by adding 1km in radius goes up drastically with each 1km added. As such, the further you go from downtown the less valuable your home is relative to all other homes built further out. Does that make sense?

The value of real estate as it relates to proximity to the core and scarcity or comparable land is not linear as many believe, but rather is exponential (<Although it may have another mathmatical term relating to growing cirlces? Anyone know?).

This is also why homes in the far West are more valuable then homes to the far East or North. Land is only restricted to the West, and mountain views are not replacable. This creates some scarcity that translates into higher prices. The same cannot be said for most of the rest of the cities perifery. The fact that they are also known as wealthy areas is linked into a circle of logic with the inherient reasons for such land value.



Claeren.

[ken0042]

Originally Posted by Sled

Obviously you know nothing of Airdrie as you wouldn't make such an ill informed statement like this.

Airdrie is the ideal community to raise a small family in. If your looking for the urban condo, cocktails every other night and social night life full of trendy pretenders then stick to downtown Calgary. For the remainder of us folks who live your average life style, spouse, kids and dog(s) this place is great.

I think you missed his point. A few other concerns:

- Distance from work. So now even if you commute time is not much more than before, you still have to factor in extra gas, car maintenance and depreciation. So factor that into your monthly budget. Even with it being a short time longer to get home; for somebody with small kids who go to bed very early those 10 or 15 minutes can be quite precious.

- Distance from friends/family. I live where I do because of how close I am to my friends. So if you can convince everybody to move along with you- great! But in the real world that isn't likely to happen.

- One way home. If there's ever an accident on the QE2 you have to navigate through some narrow side roads to get home; assuming those aren't already jammed with everybody else doing the same thing.

- Small city living. It isn't for everybody; I know I moved from Winnipeg to Calgary because I wanted to be in a bigger city.

There's probably other things, but the point of the responses in this thread remains- you are only saving a bit of money on your house by moving to Airdrie, and having to give up a lot to do it. If I could get the same house for $100K less up there; I may consider it. But not for $10K less.