Calgary Real Estate predictions? - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

Tron_fdc · 01-09-2008, 01:41 PM

I know that I'm not the only one on the board with more than one property, so I'm always kind of interested to see what people think about the market and where they think it might be headed.

I just had a look at the CREB website, and it looks like inventories are dropping (at least from where they were last year) with sales remaining fairly steady. Home prices still seem to be increasing, although on a lot of property I have seen it seems like people are reducing their list prices and are more willing to deal than they were at this time last year.

So.....I'm curious what some of the others on the board think? Double digit increases this year? Single digit? Reductions? I would have though that we would see a fairly moderate increase (3-5%) in avg home prices, but it seems that even with the "market correction" last summer we still had a 10% increase. Is that a sign of a strong market, or a strong start to '07 and a weak finish? Have we hit the bottom of the correction yet?

I'm thinking that this spring we may see a moderate gain, and then nothing at all the rest of the year. The 10% increase over the last 12 months IMO was a product of a 30% increase last spring, and then a 20% decrease over the course of the rest of the year as people were dumping properties, or cashing out and moving elsewhere. I'm also thinking the slowdown in the US might have something to do with it as well.

Anyone else want to take a stab at it?

troutman · 01-09-2008, 01:46 PM

Some realtors tell me 10%.

Tron_fdc · 01-09-2008, 01:49 PM

Oh yeah, this is the stats package I was looking at

http://www.creb.com/media/stats_pdfs...02007%20PB.pdf

fredr123 · 01-09-2008, 02:42 PM

The wife and I just bought a place and moved in on January 2. Therefore, a massive dip in the market should be forthcoming.

troutman · 01-09-2008, 04:09 PM

Quote:

Originally Posted by fredr123

The wife and I just bought a place and moved in on January 2. Therefore, a massive dip in the market should be forthcoming.

Good time to buy actually. Prices will rise over the spring and summer.

Winsor_Pilates · 01-09-2008, 08:09 PM

I expect a steady increase this year. 10% seems like a good guess to me.

Flames in 07 · 01-09-2008, 08:17 PM

slight increase during the spring (5% ish) flat through the summer, lose the gains in the late fall.

central areas in well planned hoods such as Garrison Woods, new beltline condos etc should do better than the far out burbs.

Just my guess though.

SeeGeeWhy · 01-09-2008, 10:52 PM

I've read that the historic average for Calgary is 3%. There is a lot of "traditional" development opportunities on the market right now, and it is likely only going to get better as the spring comes, so I think it is going to be a pretty strong year. Maybe 3 - 5%.

Kjesse · 01-09-2008, 11:35 PM

The speculator-investor types are slowly liquidating into the market to take advantage of the increases over the last few years. Oil is historically high which counteracts the surplus inventory, despite political issues and cost challenges faced by the industry. Fewer people move to Calgary this year.

Increase. 6% over the year.

I'm no expert.

photon · 01-10-2008, 09:44 AM

I'd love 10%!

Going to a meeting on Saturday to discuss this, we'll see what they say.

Tron_fdc · 01-10-2008, 12:23 PM

Yeah, the feeling I get from a lot of tradesmen is that there's a slowdown on construction that's coming on. If that happens, and there's not the massive demand on new homes from people who were moving here to make $30/hr as a framer, you're going to see some pretty modest increases.

I'm kind of torn between selling my other house and buying a recreation property (I would think that now is the time to look into that), or hanging off for another year or two to see what happens. I highly doubt you're going to see any decreases in property values over the next 12-24 months, but you also won't see the massive gains from the last few years.

TurnedTheCorner · 01-10-2008, 12:34 PM

I'll say between 7.5 and 10%. A report I saw on the news said that Calgary had the fourth lowest increase in Canada last year, in terms of urban markets. I think the frenzy will be elsewhere and we'll see modest gains again this year.

My house assesment was up nearly 29% though.

burn_this_city · 01-10-2008, 12:57 PM

Its tanking folks.. I think your nuts to bet on any increase this year.. I've been looking for 6 months and the average house under $400k has gone down about $20-30k already.. Too many speculation buyers during the boom are realizing now that real estate isnt actually a guaranteed investment. Drive around some of the newer neighbourhoods and check out all the vacant completions.. Theres a couple next door to my buddies place have been finished for 3 or 4 months, and no one has looked at them. New home starts are way down, theres 10,000+ properties on msl listings, and according to the news in december people are emigrating from the city to go elsewhere..

Radley77 · 01-11-2008, 12:06 PM

I think Calgary house prices are set for a major correction. Find out more at:
http://albertabubble.blogspot.com/

Radley77 · 01-11-2008, 01:03 PM

There has been a steep drop off in sales this year. There have only been 752 SFH sales in the past 30 days. This is the lowest sales volume since?

http://www.bobtruman.com/SFH_Monthly...e_1869385.html

In addition the sales/new listings ratio is at 20% the lowest since?

According to this calculator the buy vs. rent does not pay off even after 30 years:

http://www.ic.gc.ca/epic/site/oca-bc.../ca01821e.html

In addition, rental yields are below 4%, which is lower than long term bonds (or even some high yield interest savings accounts) which are 100% safe.

Bobblehead · 01-11-2008, 02:00 PM

A few of those graphs seem to indicate the the market crashed in the 80s; it is bound to happen now. Yet it is obvious the scenarios are very different. In the 80s inflation was spiralling, interest rates were jumping to try and get inflation under control, and the NEP killed Calgary. NONE of those circumstances are in play right now. Oil broke the $100/barrel barrier, the employment rate in Calgary is still crazy, inflation is still under control, and while interest rates may seem high, that is only compared to recent times. It is still 1/3 or 1/4 what the rates were 25 years ago.

Housing demand may be down right now, but it is always down in the fall off the year. The lower end, affordable housing segment still seems to need more capacity, and that will lower teh value of average sales.

Your conclusion may end up being correct, but I don't think it will be because of the analysis you have provided here.

Tron_fdc · 01-11-2008, 02:03 PM

Great info guys, keep it coming, lots of info out there I wasn't aware of.

Anyone want to guess how this might affect recreational properties?

burn_this_city · 01-11-2008, 02:10 PM

Quote:

Originally Posted by Tron_fdc

Great info guys, keep it coming, lots of info out there I wasn't aware of.

Anyone want to guess how this might affect recreational properties?

They've started to tank in bc.. Our cabin on shuswap lake went from $450k to 1 mill and back to around $750k in the last 2-3 years..

Going back to the comments about how the economy is so strong still, I don't completely buy that arguement, the drilling sector still severely depressed, construction is already taking a hit, and there is high volume of people emigrating from the province at the moment.. I for one am predicting a significant decline in prices this year.. If people are in the market to buy I suggest low balling the asking price by at least 10-15%.. People can only hold on to two properties for so long before they drown..

Bobblehead · 01-11-2008, 02:22 PM

Quote:

Originally Posted by burn_this_city

They've started to tank in bc.. Our cabin on shuswap lake went from $450k to 1 mill and back to around $750k in the last 2-3 years..

Going back to the comments about how the economy is so strong still, I don't completely buy that arguement, the drilling sector still severely depressed, construction is already taking a hit, and there is high volume of people emigrating from the province at the moment.. I for one am predicting a significant decline in prices this year.. If people are in the market to buy I suggest low balling the asking price by at least 10-15%.. People can only hold on to two properties for so long before they drown..

What are the causes for the emmigration?
They can't get a job?
They can't get a good enough job?
They can't afford housing?
They made their money and are cashing out?

I personally think a big chunk are cashing out and heading "home", and many of the speculators are deciding that rather than hold the property they will take their profits. The big, expensive houses that were pushing the boom now don't see as much demand because the people who wanted them and could afford them now have them. People coming in to the market can't afford that segment unless they are coming in from another hot area (Van, Edm or TO).

Personally, when I bought my home it was in an area of the city I could afford, and for the first year of the boom my property values were seeing anything like what was being reported. But in the last year it has sure surged.

It all comes down to the fact that there is no way the housing market could keep going at the rate it did. To expect anything close is expecting a lot. Some segments will will contract, others (middle to low end) will continue along at a more historically reasonable rate. The only thing that I could foresee causing a crash would be something that would trigger a depression, and nothing that I see right now is like that in the west.

Mike Oxlong · 01-11-2008, 03:09 PM

Quote:

Originally Posted by burn_this_city

Its tanking folks.. I think your nuts to bet on any increase this year.. I've been looking for 6 months and the average house under $400k has gone down about $20-30k already.. Too many speculation buyers during the boom are realizing now that real estate isnt actually a guaranteed investment. Drive around some of the newer neighbourhoods and check out all the vacant completions.. Theres a couple next door to my buddies place have been finished for 3 or 4 months, and no one has looked at them. New home starts are way down, theres 10,000+ properties on msl listings, and according to the news in december people are emigrating from the city to go elsewhere..

Actually there are about 5200 listings on MLS right now and yes some people are emigrating to go elsewhere but there were still 17,000 plus that moved to Calgary this year. That number is lower than last year but there are still far more people moving here than people that are moving away.

I say about 7% increase for the year. Most of it you are going to see in the next few months. Springtime is always the best time to sell a house.

One thing I have heard however is that a lot of people have been waiting to list their houses until spring waiting to take advantage of the normally good selling season. If this is the case it could flood the market with listings again and cause another price drop.

I still think prices are going up. Real Estate is a pretty safe investment. It does have its peaks and valleys but long term it always goes up.