Calgary Real Estate predictions?

[Winsor_Pilates]

Originally Posted by Claeren

In the medium+ term I really don't think you will gain anything on your condo, or loss anything on the house. I guess the safest option if you neeed to act now is.... sell the condo (which is more likely to go down/stay same than it is to go up) to buy the house (which is marginally more likely to go up than the condo). In leveraged dollars, any scenario is better than going down...

Claeren.

Disagree; the slowest parts of the market right now are the outskirt areas like New Brighton. Whether the market picks up of goes down further, I can't see property that far out; outperforming the property near the core.

[I-Hate-Hulse]

Originally Posted by fotze

I have never heard so much from headhunters. Talking to 5 separate companies. and I can certainly say its not because I am awesome. 'The market' does seem to be on overdrive.

I will second this - our company has plans to staff up (O&G services) as does the wife's (transportation). Put it this way, we're running out of floor space in the office.

Maybe I'm overly optimistic, but if oil stays at the $100 mark and gas doesn't drop further, causing increase migration into Calgary - I can see the marketing strengthening to about 30% of 2007. So not stupid crazy, but a healthy level of activity for reasonably priced, well located properties.

[Claeren]

Originally Posted by Winsor_Pilates

Disagree; the slowest parts of the market right now are the outskirt areas like New Brighton. Whether the market picks up of goes down further, I can't see property that far out; outperforming the property near the core.

Well I think the idea of upside in real estate in Canada is a bit of a joke regardless of where its located so I don't want to go defending many options...

Condos and far flung suburban homes together have had pretty rough rides. The way I read it though was that he needs a SFH to live in and he cannot live in the condo. If he is actually going to live in the home the risks are mitigated somewhat I would think??

[MickMcGeough]

Originally Posted by Claeren

Well I think the idea of upside in real estate in Canada is a bit of a joke regardless of where its located so I don't want to go defending many options...

Condos and far flung suburban homes together have had pretty rough rides. The way I read it though was that he needs a SFH to live in and he cannot live in the condo. If he is actually going to live in the home the risks are mitigated somewhat I would think??

No - I don't need a SFH, I can live in the condo for another year or so at most. After that there will be little mini-MickMcGeoughs running around so the condo isn't going to work anymore. I'm just getting impatient with paying hundreds in condo fees every month and worried about getting priced out of new SFH builds in New Brighton by waiting.

[chemgear]

http://www.theglobeandmail.com/repor...rticle1942385/

The CREA says wha?

[fundmark19]

Originally Posted by Winsor_Pilates

Disagree; the slowest parts of the market right now are the outskirt areas like New Brighton. Whether the market picks up of goes down further, I can't see property that far out; outperforming the property near the core.

Are you sure 3 houses on my street all just sold in NB All asking more then what we paid for 2 years ago

**I should add more then what I paid for but they are all the same duplex I assume people got in roughly same price***

[chemgear]

I was unfamiliar with where exactly New Brighton was located - google maps and holy cow that's a long way out there.

Speaking of paying more/less - that's a LOT of red on Mike F's spreadsheet summary for finalized sales yesterday. Nearly half of those people lost money even before moving/realtor fees.

[fundmark19]

It is right beside mckenzie towne there are a lot more communities way further out then new brighton

[OldDutch]

Originally Posted by Claeren

If commodity prices surge in the short-medium term (which seems very possible, whether by demand or by inflation of the USD it is priced in) then it is possible.

But what no one around here seems to want to acknowledge is that a surge now could mean a full stall of any 'recovery' and a likely multi-decade depression.

It all gets pretty complicated, but the world will not pay $200/barrel for long before they simply change their usage habits and demand new technologies which are cheaper relative $200 oil than $50 oil, etc etc).

In the medium+ term I really don't think you will gain anything on your condo, or loss anything on the house. I guess the safest option if you neeed to act now is.... sell the condo (which is more likely to go down/stay same than it is to go up) to buy the house (which is marginally more likely to go up than the condo). In leveraged dollars, any scenario is better than going down...




Claeren.

Totally agree. One thing I would add is that very few people look at the price of Natural Gas. That is a huge factor in this town, arguably more than Oil. NG has been in the dumps for 3 years now. I really feel that until NG is back up to near $10 you will not see any crazy times in Calgary. People need to remember that in 2005, NG was $15, it is around $3-$4 today.

With that said, all bets are that NG will be low for the next few years still. So with the insane real estate jumps in prices in late 2009 - early 2010, I think the market here has stalled. I really do not think anyone is about to take on more debt post-recession, with low NG prices.

Also, the deep suburbs are the most volatile to boom/bust in Calgary. Inner city is always going to cost more, but maintain value better. That is partly why we moved to Sunnyside.

[chemgear]

I think I may have linked an earlier version of the document but here is the 2010 summary:

http://www.energy.alberta.ca/Org/Pub...ons/AR2010.pdf

Note pages 10-12 of the pdf. The rise in oil doesn't make up for the brutal crap kicking taken by gas. We/the industry is still pretty heavy gas weighted (and won't suddenly shift.)

[Winsor_Pilates]

Originally Posted by Claeren

Well I think the idea of upside in real estate in Canada is a bit of a joke regardless of where its located so I don't want to go defending many options...

Tell that to the people who have made 20% in Richmond in the last 6 months.

Condos and far flung suburban homes together have had pretty rough rides. The way I read it though was that he needs a SFH to live in and he cannot live in the condo. If he is actually going to live in the home the risks are mitigated somewhat I would think??

If he needs a SFH, then yes priority goes to what he actually wants to live in. I wouldn't think of the primary residence in investment terms too much anyway.
Right now SFH's are killing condos in sales; but I think long term location always wins.

Originally Posted by fundmark19

Are you sure 3 houses on my street all just sold in NB All asking more then what we paid for 2 years ago

**I should add more then what I paid for but they are all the same duplex I assume people got in roughly same price***

SFH homes in general are selling very well right now. I've been looking at condo sales mostly lately; so I was thinking more in terms of those.
I should have worded myself better, as you are correct; home sales in that area seem to be pretty good right now.

Long term I still like putting my money on location; but maybe that's just me.

[chemgear]

Mike F has his usual update on his blog with stats for the first half of the month. Only 3 days left!!

http://calgaryrealestatereview.com/2...market-update/




This is somewhat disconcerting as there was an expected rush to get in before the end of 35-yr amortizations. Either:
a) too much hype about the end of 35-yr amorts and prospective buyers aren’t very concerned with it decreasing
b) this is the rush

[chemgear]

Well March 18 has come and gone. Mike F with another great summary:

http://calgaryrealestatereview.com/2...acting-market/

Comments also have good additional information. Median and average prices for SFH and condos are look like they'll be lower than previous month (which was up a bit.) The big dip in both SFH and Condo sales at the same time is interesting. Going forward it should be neat to see - was demand really pulled forward? If it was, what will sales look like if they barely tracked a pretty poor year. (Interest rate hikes probable later in the year as well.)

[chemgear]

Prices are going up! up! up! (in February - March not so much.)

http://www.calgaryherald.com/busines...316/story.html

[chemgear]

Good article on Macleans about the CMHC:

http://www2.macleans.ca/2011/03/23/a-mortgage-monster/

The CMHC: Canada’s mortgage monster

[chemgear]

March numbers are almost in and the sales have certainly slowed since the March 18th deadline. Pending sales since then have certainly not keep up to the pace of even the 2010 crappy year. (Could this already be the peak sales for the 2011 year?)

Mike F has another great blog post about people <gasp> losing money on real estate in Calgary (heck, this doesn't even include interest, opportunity, realtor and moving costs.)

http://calgaryrealestatereview.com/2...odays-sellers/


The following repeat sales history is taken from homes that sold between February 18, 2011 – March 27, 2011.
There were 744 homes with a previous sale on MLS® from 2000 onwards.

Of those 744 homes:

• 538 had a higher sale price than its previous sale (72.3%)
• 196 had a lower sale price than its previous sale (26.3%)
• 10 had the same sale price as its previous sale (1.3%)

There were 313 condos that sold on MLS® between Feb 18- March 27, 2011 that had a previous sale since January 2000.

Of those 313 condos:

• 180 had a higher sale price than its previous sale (57.5%)
• 132 had a lower sale price than its previous sale (42.2%)
• 1 had the same sale price as its previous sale (0.3%)

[bomber317]

Originally Posted by chemgear

Of those 313 condos:

• 180 had a higher sale price than its previous sale (57.5%)
• 132 had a lower sale price than its previous sale (42.2%)
• 1 had the same sale price as its previous sale (0.3%)

I'm glad I was able to sell my condo close to asking before the March 18th deadline.

Sold for higher than what I got it for, and not too much lower than the peak price of the condo.

[Cowboy89]

Originally Posted by chemgear

Good article on Macleans about the CMHC:

http://www2.macleans.ca/2011/03/23/a-mortgage-monster/

The CMHC: Canada’s mortgage monster

This is the issue that will pop the bubble. The retort from CMHC in the article that Canada did not and do not have subprime rates is false. The definition of a sub prime loan is one where the borrower made payments at teaser rates before they were jacked 3-5 years later. We do not have subprime rates in intentional strcutures, but people who barely qualified for a 0 down 40 amort, or a 5 down 35 amort, at record low rates of the past couple of years are effectively subprime borrowers as they are now paying much lower rates than they will have to refi for in 3-5 years time while not really paying down much principal because they're down payments were so low or non-existant. These are people who should not own their homes, and their high risk for default when rates inevitably normalize has been offloaded to CMHC in much the same fashion as Fannie mae and Freddy Mac in the US 5 years ago.

[hmmhmmcamo]

Originally Posted by Cowboy89

We do not have subprime rates in intentional strcutures

I'm pretty sure I've seen some condo developments in Vancouver that had ads for teaser rates/sup prime style mortgages. I was working for a developer at a project in Port Moody and remember seeing signs at the site next door advertising them. You're starting to see developers waiving strata fees etc for the first few years which is basically the same thing.

I agree about the CMHC being the main problem with the market in Canada and will ultimately be the reason for any "correction" that will occur.

Its main function is to provide mortgage insurance for prospective homeowners who put less than 20 per cent down on their houses, protecting the banks in the event of defaults. The CMHC also helps to spread risk by finding investors to buy CMHC-insured mortgages that have been pooled together into so-called mortgage-backed securities. All of this is guaranteed by the government.

Isn't this awfully similar to what happened in the US?

home prices are likely overvalued by as much as 20 per cent in some Canadian markets thanks to CMHC policies that encouraged banks to lend far too much money to people to whom they shouldn’t have.

again, same thing in the US.

I'm really not convinced our banks are any better regulated than those in the US.

[chemgear]

Numbers are in for March (from Mike F as usual.)

http://calgaryrealestatereview.com/2...te-statistics/

Prices down/stable from last month (condos took a hit.) Sales numbers lower than even the "worst in a decade" numbers in 2010. VERY interesting to see the sales numbers go down after the March 18th deadline:





Temporary or the sales peak already for 2011? Only time will tell. As a neat side effect as well, it looks the first time home buyers rushed to get in before March 18 so average prices might actually go up a bit as the population distribution over the price bands shifts away from them.