Is this the sign of a bursting bubble?

[OMG!WTF!]

I'd say without question the bubble has burst, at least for the owners of these two houses and all those who own in the same area...

http://www.cbc.ca/news/canada/calgar...gain-1.3302103

[polak]

Luxury has been hurting for a while now.

[darklord700]

Originally Posted by OMG!WTF!

I'd say without question the bubble has burst, at least for the owners of these two houses and all those who own in the same area...

http://www.cbc.ca/news/canada/calgar...gain-1.3302103

That 1.1M mansion is a great buy.

http://www.conciergeauctions.com/auc...l-1w0/#forward

[Erick Estrada]

Originally Posted by OMG!WTF!

I'd say without question the bubble has burst, at least for the owners of these two houses and all those who own in the same area...

http://www.cbc.ca/news/canada/calgar...gain-1.3302103

That's not really surprising though because only a very small percentage of Calgarians could even afford the low ball price. No different than high end luxury cars being the most highly discounted in the used car market while mainstream cars carry on unnafected. When we see average price homes drop steeply in value that's when we will know the bubble bursts and right it's not happening.

[T@T]

Originally Posted by Erick Estrada

That's not really surprising though because only a very small percentage of Calgarians could even afford the low ball price. No different than high end luxury cars being the most highly discounted in the used car market while mainstream cars carry on unnafected. When we see average price homes drop steeply in value that's when we will know the bubble bursts and right it's not happening.

It's starting to show its close though, a friend has been trying to sell his house in Hawkwood for 6 months and the only bite he's had is a 20% less lowball offer. It's going to take a miracle to stop this train.

And I don't believe in miracles.

[taco.vidal]

Originally Posted by T@T

It's starting to show its close though, a friend has been trying to sell his house in Hawkwood for 6 months and the only bite he's had is a 20% less lowball offer. It's going to take a miracle to stop this train.

And I don't believe in miracles.

Why do you call it a lowball? If the house isn't selling at his asking price, then its likely his price is unrealistically high.

Worst case is if he waits too long and the market price slides past the "lowball" offer. Then your friend will be left wishing he took the perceived lowball.

Remember that market price is what things are selling for in the open market. If the house isn't selling for six months then its priced above market price.

[GGG]

For housing to move though people need to be forced to sell. Essentially run out of money or leave Calgary.

[darklord700]

I don't think situation is so dire. Yes, there're 30% less sale thus far this year but there're still 70% people buying and selling at merely a few % point lower than last year.

[OMG!WTF!]

Yeah, the Priddis houses were sold to the highest bidder. If they had listed at a reasonable price for six months I suspect they would have gotten much more.

Interesting point on BNN today. The real estate market may actually get a lift when they raise lending rates. They are so low now that banks don't make much on mortgages and so they have been quite picky with their requirements and qualifying. Low returns require low risk, When rates increase, they can achieve a better margin and therefore can loosen qualifying criteria and more people can buy.

I think we are in for it though. Realtors are running around like dogs on Halloween, totally freaked out by creeps trying to steal their chows.

[darklord700]

I have seen shoe box size downtown apartment selling for 800K, 900K. So the $1.1M Priddis mansion is a steal. The buyer could easily double his money when the market comes back to normal.

[Yoho]

Originally Posted by darklord700

I have seen shoe box size downtown apartment selling for 800K, 900K. So the $1.1M Priddis mansion is a steal. The buyer could easily double his money when the market comes back to normal.

Apples and oranges comparison.

[stampsx2]

Originally Posted by darklord700

I have seen shoe box size downtown apartment selling for 800K, 900K. So the $1.1M Priddis mansion is a steal. The buyer could easily double his money when the market comes back to normal.

This. Isn't real estate suppose to be like the stock market? Buy low sell high?

[edslunch]

Originally Posted by Slava

I'm curious about that bolded line. What makes you think that this is the new normal and not a piece of a somewhat usual economic cycle?

For oil it is a new normal. US shale oil has changed the game since they can spin up new wells quickly as soon as the oil price rises and can do this indefinitely - they are now a buffer in world wide capacity. I'd be shocked if we see oil above the 60s anytime in the foreseeable future.

[edslunch]

Originally Posted by Ducay

Some people have a terrible memory and think that these prices are somehow a death knell for the industry. These prices are terrible for terrible producers; at $100 oil anyone can make bank. Employment levels and capital/operating costs were arguably out of control and needed a correction. The industry survived and thrived for year at oil under $60.

Average '0125.94
Average '0226.09
Average '0331.14
Average '0441.42
Average '0556.46
Average '0666.09
Average '0772.27
Average '0899.59
Average '0961.63
Average '1079.43
Average '1195.00

After the layoff waves stop in the new year lets companies get back into equilibrium and start making money again.

[T@T]

Originally Posted by taco.vidal

Why do you call it a lowball? If the house isn't selling at his asking price, then its likely his price is unrealistically high.

Worst case is if he waits too long and the market price slides past the "lowball" offer. Then your friend will be left wishing he took the perceived lowball.

Remember that market price is what things are selling for in the open market. If the house isn't selling for six months then its priced above market price.

He's asking the same price that he paid over 3 years ago. Plus he built a new deck.

[Rutuu]

Originally Posted by T@T

He's asking the same price that he paid over 3 years ago. Plus he built a new deck.

Real Estate always goes up.

[T@T]

Originally Posted by Rutuu

Real Estate always goes up.

Lol, daily?, weekly?, monthly?, yearly?, decade? or century?

BTW, if your in need of a winter place you can still buy an Arizona pad for about half of what it sold for 10 years ago.

[Erick Estrada]

Originally Posted by T@T

It's starting to show its close though, a friend has been trying to sell his house in Hawkwood for 6 months and the only bite he's had is a 20% less lowball offer. It's going to take a miracle to stop this train.

And I don't believe in miracles.

Again I see this as more of a market correction than a bubble bursting. An offer of 20% below asking isn't exactly a low ball as it's just that Calgary has been a seller's market for so long people have forgotten what a regular market looks like.

[fundmark19]

I am helping a friend look for properties in the high 3's to mid 400's and there isn't anything good available. Could be the time of year but for this bubble bursting notion there seems to be a demand for the mid level house

[VladtheImpaler]

Originally Posted by fundmark19

I am helping a friend look for properties in the high 3's to mid 400's and there isn't anything good available. Could be the time of year but for this bubble bursting notion there seems to be a demand for the mid level house

The guy next door does real estate and they are very brisk at the lower end - that stuff is still moving. It's just the high end that's dead.