Why is the market going crazy?

[Flamenspiel]

Originally Posted by darklord700

I bought my first condo in 2000 for $120K, sold it in 2004 for $180K and bought a house for $250k just before the crazy run up. At that time my family income could afford a close to $400K house but I tried to be financially prudent and bought an adequate $250K house instead.

I'm still beating myself for not buying that $400K house in 2004 which would have been worth close to $800K today.

Anytime in history you'll have people wondering why people were paying so much for houses but most of the time people do pay a lot for houses.

Yes, there are always these thoughts but you still did well and your 250 is probably worth at least 5 now. No matter what, when the time comes to sell, its always easier to sell the average house then the million dollar homes.

One other point is that I think your primary residence should really be about what you need and project in terms of a residence, even if you sell an expensive house you have to live somewhere and in most cases would have to move to a place with significantly lower real estate costs to realize your gain.

Now, had you bought a rental at the time(maybe you did), that is a different story, that money comes back and costs are tax deductible.
Whats interesting is that people often forget about all the interest they had to pay to buy the bigger house in the end, typically the interest over time will significantly eat into any capital gain made on a primary residence, and its not tax deductible.

For example a 200,000 dollar loan at 3% will cost you around 284,000 on 25 year amortization.

https://origin.bankrate.com/calculat...alculator.aspx

[Travis Munroe]

My advice,

The higher the value, the more difficult it becomes to sell. We live in a rich city however the buyers looking for 400-700 greatly outweigh the million dollar + buyers.
If you are in a position of needing a new lifestyle or larger space....make the move. DO NOT sell your place to upgrade simply because it is worth 25% more than you paid. You will pay 25% more on the more expensive property.
Move to fit your lifestyle, not the market!

[tvp2003]

Originally Posted by Realtor 1

My advice,

The higher the value, the more difficult it becomes to sell. We live in a rich city however the buyers looking for 400-700 greatly outweigh the million dollar + buyers.
If you are in a position of needing a new lifestyle or larger space....make the move. DO NOT sell your place to upgrade simply because it is worth 25% more than you paid. You will pay 25% more on the more expensive property.
Move to fit your lifestyle, not the market!

The fact that $400k to $700k is now the benchmark makes me cringe a little (I guess that is for SFH -- there are still the condos and townhouses I suppose)...

[lorenavedon]

Originally Posted by tvp2003

The fact that $400k to $700k is now the benchmark makes me cringe a little (I guess that is for SFH -- there are still the condos and townhouses I suppose)...

idk.. 400k is pretty much bottom of the barrel if you're looking for a 2 bedroom condo, center and in a newer building. More like 500k

[darklord700]

Originally Posted by lorenavedon

idk.. 400k is pretty much bottom of the barrel if you're looking for a 2 bedroom condo, center and in a newer building. More like 500k

I was taken aback when I saw these 700 sq ft condos in Calgary going for $400K.

http://beta.realtor.ca/propertyDetai...rtyId=14264587
http://beta.realtor.ca/propertyDetai...rtyId=14182090

[lorenavedon]

Originally Posted by darklord700

I was taken aback when I saw these 700 sq ft condos in Calgary going for $400K.

http://beta.realtor.ca/propertyDetai...rtyId=14264587
http://beta.realtor.ca/propertyDetai...rtyId=14182090

lol yeah. Since when did brentwood become the downtown core?? Plus 400k to live in a building that's nothing more than a glorified dorm? with 10 students packed into a 500sqft unit banging loud music and parties 24/7... lmao what a dump. You couldn't pay me to live in that building.

[darklord700]

Originally Posted by lorenavedon

lol yeah. Since when did brentwood become the downtown core?? Plus 400k to live in a building that's nothing more than a glorified dorm? with 10 students packed into a 500sqft unit banging loud music and parties 24/7... lmao what a dump. You couldn't pay me to live in that building.

Yeah, you can get the same square footage at the downtown Waterfront condos with much better finishing to boot.

[Regular_John]

Originally Posted by lorenavedon

lol yeah. Since when did brentwood become the downtown core?? Plus 400k to live in a building that's nothing more than a glorified dorm? with 10 students packed into a 500sqft unit banging loud music and parties 24/7... lmao what a dump. You couldn't pay me to live in that building.

Man seeing some of these prices makes it temping to dump $5-10k into my kitchen and then list my 3 bedroom 1,080sq ft townhome for a solid 60k more than we paid 2 years ago.

No, I'm not doing that because I like where we live, it's just crazy to see what some of these places with "so so" finishes are going for now.

[stampsx2]

People are saying there's a housing bubble, it's going to burst anytime. As far as I've seen, North America has underpriced houses compared to incomes. I think we're only catching up to the rest of the world.

In Europe, house prices are higher than ours and incomes are generally lower and unemployment is higher. Most people in Europe can only dream of having their own condo. Food, clothing, gas, utilities, electronics are all more expensive than they are here compared to incomes.

In Newfoundland and Nova Scotia you could get a reasonable house for 150,000. That's almost impossible in Europe. Asia I'm guessing is probably similar.

I'd love to see a house vs income comparison worldwide. I don't think we'd be too far up the list here in Calgary. People complain too much.

Don't people come here from overseas for the opportunity?

[Johnny199r]

Originally Posted by stampsx2

People are saying there's a housing bubble, it's going to burst anytime. As far as I've seen, North America has underpriced houses compared to incomes. I think we're only catching up to the rest of the world.

In Europe, house prices are higher than ours and incomes are generally lower and unemployment is higher. Most people in Europe can only dream of having their own condo. Food, clothing, gas, utilities, electronics are all more expensive than they are here compared to incomes.

In Newfoundland and Nova Scotia you could get a reasonable house for 150,000. That's almost impossible in Europe. Asia I'm guessing is probably similar.

I'd love to see a house vs income comparison worldwide. I don't think we'd be too far up the list here in Calgary. People complain too much.

Don't people come here from overseas for the opportunity?

Calgary, at most, would only be looking at a slight correction. Calgary has a strong economy and a shortage of single family homes due to the insane amount of people moving there every year. Other parts of the country don't have the same market fundamentals and would see a much bigger drop.

[Wormius]

Calgary / Alberta in general is very resource driven economy though. I think a $500,000 property in Vancouver would hold its value better than a $500,000 property in Calgary. A downturn in any one industry in BC would not, I believe, be as catastrophic as any in Alberta would.

[stampsx2]

I agree. Most of Vancouver's housing bubble is overseas investment. Probably not going to burst anytimesoon.

[Zarley]

Originally Posted by Wormius

Calgary / Alberta in general is very resource driven economy though. I think a $500,000 property in Vancouver would hold its value better than a $500,000 property in Calgary. A downturn in any one industry in BC would not, I believe, be as catastrophic as any in Alberta would.

I entirely disagree. The appreciation in Calgary home pricing is has at least been underpinned by fundamental demand for housing with 40,000 residents moving here last year and similar levels in in-migration projected for 2014.

Conversely, appreciation in the Vancouver market has largely been investor driven, with high levels of overseas interest in the property market. The same level of real housing demand does not exist in that market, as evidenced by lower rental rates in Vancouver compared to Calgary. I'd be very hesitant to buy into the Vancouver market because as we've seen in Phoenix and Vegas, secondary investor properties are the first to be hit hard in a downturn.

[Wormius]

Originally Posted by Zarley

I entirely disagree. The appreciation in Calgary home pricing is has at least been underpinned by fundamental demand for housing with 40,000 residents moving here last year and similar levels in in-migration projected for 2014.

Conversely, appreciation in the Vancouver market has largely been investor driven, with high levels of overseas interest in the property market. The same level of real housing demand does not exist in that market, as evidenced by lower rental rates in Vancouver compared to Calgary. I'd be very hesitant to buy into the Vancouver market because as we've seen in Phoenix and Vegas, secondary investor properties are the first to be hit hard in a downturn.

If the O&G industry took a nose dive, all I see are thousands of formerly very well paid workers carrying $450,000 mortgages which they can no longer afford followed by a mass exodus from Alberta. Housing prices here have only started becoming quite expensive within the last 8 or so years while Vancouver has historically always been an expensive place to buy a home. I am just saying that Vancouver is more diversified and could withstand a shock to any single one of its industries and not be devastated.

Still, both Vancouver and Calgary have increased over the years, but Calgary's is totally dominated by oil & gas business, and that all filters down to everything else in the province. The only people who would likely be untouched by a downturn in that would be tourism based companies and agriculture.

[Vinny01]

I have been trying to sell my condo in Sunnyside for a month with only 1 lowball offer so far. It sucks because it is vacant so we are paying double right now. We were optimistic it would sell in a couple weeks as well. Similar places have sold for around my list price as well. Really hoping to hear something soon especially when all you hear is the market is booming. Really frustrating when the market booms and your place is not selling.

It has everything too

Granite, in suite laundry, fire place, private balcony, and the building has an elevator (rare for the older condo buildings in that neighborhood)

[RedMileDJ]

Sold our home, about 4 weeks ago, within 24 hours of listing. We had 9 viewings and 5 offers. Went with the offer that gave us lots of time to move...and they REALLY wanted the house (ie: they paid WAY over our list price).

We just found our new home a week ago. We've lined up all the possession dates. Everything is falling in line. We've got a bigger house now and in an area we like.

I have to admit, I was getting a little nervous about finding a place. Luckily, selling in March (inventory low) and putting 90+ days (negotiable) on it really paid off.

[Hugh Jahrmes]

People really offer above list price on the first day eh, that's crazy. Congrats

[RedMileDJ]

Originally Posted by Hugh Jahrmes

People really offer above list price on the first day eh, that's crazy. Congrats

Without getting into specific number, I'll say this: they paid 6.5% over the list price we had. All the other (4) offers were 1, 2 and 3% over.

Funny though...we paid $3000 LESS than the list on our new place. The house had been on the market in Calgary for 6 days, with 5 showings and no offers. So we were able to come in a little lower.

Everything worked out!

We just had the inspection done and no "huge" red flags. A few things to be done here and there. It's all been negotiated and will be taken care of.

[lorenavedon]

Originally Posted by Vinny01

I have been trying to sell my condo in Sunnyside for a month with only 1 lowball offer so far. It sucks because it is vacant so we are paying double right now. We were optimistic it would sell in a couple weeks as well. Similar places have sold for around my list price as well. Really hoping to hear something soon especially when all you hear is the market is booming. Really frustrating when the market booms and your place is not selling.

It has everything too

Granite, in suite laundry, fire place, private balcony, and the building has an elevator (rare for the older condo buildings in that neighborhood)

it's a two faced market. Stuff that people really want sells for above asking in seconds and stuff that doesn't stand out as something special can tend to sit for a while unless priced aggressively. Ask yourself, is your building concrete, does it have underground parking, do you have a good view, etc. Chances are in Sunnyside you don't because the only new buildings are Pixel and St Johns and most others are older wood frame. Also people are still skittish about the flood even though a lot of places in sunnyside didn't get any flood damage.

[Travis Munroe]

2 of my listings went C/S this weekend and I am working on a offer for a third! Long weekends are supposed to be slow!