Market post flood 2013 - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

K1LLswitch · 06-23-2013, 10:22 AM

What do people think is going to happen in the Calgary real estate market in the next few months post flood? Will prices go up as part of the city is now off the market as it is under water / flood damaged?

My sister and brother in law have been getting their place ready to sell in July (silver springs) and were going to move in with my parents while they build on some land they bought in springbank. With the flooding, it is doubtful that they will be able to build anytime soon as I imagine the trades will be super busy fixing flood damaged homes and there will be a major premium on their services and on drywall and other building materials.

Should they sell in July? Should they wait until September? Should they try to rent it out to people looking for temporary accommodations?

Edit: I realize that asking this will probably get me banned by the price gouging social media types

ranchlandsselling · 06-23-2013, 11:07 AM

Been wondering the same thing... Will people for the short term stay away from river coummunities? Will Inglewood and other areas affected be more scrutinized like the hurricane automobiles from the states?

We just sold a place in Inglewood in the fall that I'm sure as heck glad we sold off. Some people who don't have the money to repair might sell... Will they sell at a discount?

I have some stuff on kijiji and actually received an email last night from someone in Edmonton who asked "is any of this stuff water damaged?". So the thought is already on people's minds.

Will homebuyers wander into every inner city home and ask "was your basement flooded"?

I've got a condo at the top of a hill, will it suddenly be a bit more attractive...

Doubt it... But interesting discussion.

Buzzard · 06-25-2013, 08:58 PM

http://www.calgaryherald.com/busines...862/story.html

JD · 06-25-2013, 11:30 PM

If anything, Inglewood (most parts of it anyway) should be more appealing because of the success of the berm during this flood! I bought in Inglewood in 2005 just after the flooding, and one of the factors in my decision was that my place would most likely not be affected by flooding, if it was ever as bad as 2005. Well, here we are in 2013 with flooding much much worse than that, and, sure enough, unaffected. Unless you consider being out of your home for 5 days as "affected".

username · 06-26-2013, 09:56 AM

Short term I'd say that the areas that were hit hard are going to drop a bit. Conversely those areas that were not hit will go up by the same margin.

Long term, well people have short memories. I'd say prices will be back to normal within 2 years. The homes right on the river I don't think will be affected that much since the people buying those homes probably don't sweat needing to do a few hundred thousand dollar reno every 10 years.

bizaro86 · 06-26-2013, 11:26 AM

Quote:

Originally Posted by username

Short term I'd say that the areas that were hit hard are going to drop a bit. Conversely those areas that were not hit will go up by the same margin.

Long term, well people have short memories. I'd say prices will be back to normal within 2 years. The homes right on the river I don't think will be affected that much since the people buying those homes probably don't sweat needing to do a few hundred thousand dollar reno every 10 years.

Plus, I don't think the government has a cap on the value of a principal residence they'll pay for the recovery of under disaster relief. (IIRC, is that what happened in 2005?) So taxpayers may end up rebuilding/restoring damage to riverside mansions. I don't think there was any means testing in '05, but I'm not positive.

username · 06-26-2013, 03:02 PM

Quote:

Originally Posted by bizaro86

Plus, I don't think the government has a cap on the value of a principal residence they'll pay for the recovery of under disaster relief. (IIRC, is that what happened in 2005?) So taxpayers may end up rebuilding/restoring damage to riverside mansions. I don't think there was any means testing in '05, but I'm not positive.

No there is a cap actually. One guy I was helping out who recently did a 600K reno on his basement said that in 05 the replacement value was hardly that. He had a huge flat screen tv (back then they were big bucks) and he said they gave him a couple hundred bucks for it. Something like it would have bought a 32 inch crt tv.

It's not like this guy needed the money but the point is there's a cap on replacement for everything.

I-Hate-Hulse · 07-03-2013, 08:35 AM

Looks like there's been a bit of a surge in buying to house displaced people, but will this kind of buying last?

Calgary realtor Rachelle Starnes said the past week of flooding has changed the market dramatically.

“We have seen in the past week properties sell, sight unseen, for families that have lost their homes in the flooding,” said Starnes, who is with Royal LePage Foothills. “It is shifting into a sellers’ market where buyers must buy immediately when a property enters the market or risk losing it to competing offers if they wait. The rental market is becoming non-existent so the families must purchase an alternative.

“There is limited overall supply and therefore pure Keynesian economics say prices must increase with low inventory ... We have seen zero showings on luxury homes for months at a time and then all of a sudden in the past few weeks, we get three offers in one week on homes that have had no activity. It is very volatile at the moment.”

http://www.calgaryherald.com/busines...#ixzz2XzdMsRgT

I agree with the comment about not being able to find good trades for 2 years - that should keep the flippers out.

nik- · 07-03-2013, 10:49 AM

lol, did she have to drop the "therefore pure Keynesian economics" part?

bizaro86 · 07-03-2013, 12:58 PM

Quote:

Originally Posted by nik-

lol, did she have to drop the "therefore pure Keynesian economics" part?

She should drop that part.

ranchlandsselling · 07-10-2013, 10:04 PM

Interesting that Realtor1 hasn't commented on this thread?
Any thoughts?

What's going on out there?

AMG_G · 07-11-2013, 04:24 PM

Maybe he's too busy?

Travis Munroe · 07-11-2013, 06:04 PM

Hey,

Been super busy....as I am sure most of you have already heard:
- Many luxury properties are being bought without even viewing them
- Record MLS sale @ 11.1 million for the Shaw house immediately following the flood
- Last 30 days set a record with 5 4 million dollar homes selling
- Rental rates are very unrealistic and only climbing. Typically I see 1 or 2 messages a week within my office for people looking for a rental property. Seems 1 or 2 a day are coming up right now.

That said, I personally am seeing most of this within the inner city and SW (aspen) area. The rest of the city seems normal.

Itll be interesting to see what happens once the dust has settled and the luxury homes ruined by the flood have been fixed up. Are the owners who have went off and bought something else to live in going to create a huge supply of luxury rentals or will we see a bunch of luxury homes hit the market all around the same time...

ranchlandsselling · 07-14-2013, 09:27 AM

Quote:

Originally Posted by Realtor 1

Hey,

Been super busy....as I am sure most of you have already heard:
- Many luxury properties are being bought without even viewing them
- Record MLS sale @ 11.1 million for the Shaw house immediately following the flood
- Last 30 days set a record with 5 4 million dollar homes selling
- Rental rates are very unrealistic and only climbing. Typically I see 1 or 2 messages a week within my office for people looking for a rental property. Seems 1 or 2 a day are coming up right now.

That said, I personally am seeing most of this within the inner city and SW (aspen) area. The rest of the city seems normal.

Itll be interesting to see what happens once the dust has settled and the luxury homes ruined by the flood have been fixed up. Are the owners who have went off and bought something else to live in going to create a huge supply of luxury rentals or will we see a bunch of luxury homes hit the market all around the same time...

Thanks - assumed you were busy but wanted to ask the question/bump thread to see some commentary.

Interesting regarding the rental property requests. If you're still getting requests I'd consider selling my place privately and staying for 10-11 months. Or a sale with posession in 11 months lol.

Bownesian · 07-28-2013, 07:11 PM

I have a related but more specific question.

What would your guess be as to the depreciation on an individual house in the flood fringe that was not brought up to the provincial flood prevention code? Would it be different for a $700,000 property as for a $1,000,000 one? Any guess on whether there will be immediate depreciation on a house in the fringe even if it was brought up to the code?

Unless we can collectively get the road (Bow Crescent) built up into a dyke or something I'd need to burm/raise my foundation about 3 feet to be able to meet the standards to be covered again by the government. Burming would almost certainly require re-engineering the foundation as the foundation isn't rated for that much hydrostatic height and 15% of the repair cost ain't gonna come close to that cost.

Travis Munroe · 07-28-2013, 10:02 PM

Its tough to say until the first group of properties start dictating the prices. Ive been trying my best to keep a close eye on the governments details. When I get some time I want to go through it all in detail.
Imagine buying a property that was not brought up to the government standards and your SOL. Im sure thats something you would expect your real estate agent to have found out for you! Correct me if I am wrong however these properties are going to have something registered on their title and not until the required steps have been taken and approved will it be taken off the title.

Bownesian · 07-29-2013, 10:56 AM

Thanks for your reply.

That's my understanding - there will be a note of non-compliance on the title.

We're planning on staying put for decades and are thinking of developing up over the garage and flood-hardening the basement with building materials and sumps and leaving it relatively undeveloped (which to my understanding will leave us short of compliance, but should drastically reduce the clean-up cost next time).

My curiosity is driven by a desire to do a complete cost-benefit analysis of all my options as if my property value drops by some big amount, that should generate savings on property taxes which I could then use to self-insure against the next large flooding event in the future.