Real estate in Calgary - another bubble?

[OptimalTates]

Originally Posted by accord1999

I've been logging real estate listing prices for a few years and I don't think there's been much of a boom in actual transactions for the $1+M market. For example, 151 Hampstead Way Northwest was listed at $1.285M in May 2021 and eventually went down to $1.175M with no buyers. Relisted in February at $1.285M again but still no buyers and already down to $1.178M.

I have no reason to disagree (or agree) with you but I'm not sure what that example proves if the house was not sold. Taking it to an extreme for illustrative purposes, does the same thing not happen if the house was worth $500,000 in 2021 and $750,000 in 2022?

[tvp2003]

Originally Posted by Harry Lime

The issue isn't so much looking at fair value for homes respective to other jurisdictions, or even recent historical sales, it's that the availability of homes at under $350K is almost non-existent. The only opportunities to get into the market at this price point are apartment style condos, or properties with extenuating circumstances. Working class Canadians are being turned into a sub-class. This changes the basic structure of a kids upbringing significantly from what 'we' were used to growing up. There seems to be a level of segregation that we are building into our communities that wasn't there 20 years ago.

You can't even move out of the city to upgrade your home. Commuter towns outside of Calgary and Edmonton are pretty much priced the same way now. Smaller cities in BC are priced at Calgary prices, so Kamloops and Vernon are priced out for most people wanting a detached home with a backyard for the kids.

It feels as if a way of life is being exterminated.

I appreciate the sentiment and sympathize with the likely frustration if you're someone who is trying to buy in this current market. But I would push back on a few points for the sake of discussion:

- Townhomes are an option between SFH and condos -- you may not get your own "backyard" but it can help bridge the gap if you're wanting more space for family.

- Why $350k? Is that related to "working class" income in Calgary, or house prices? It looks like median prices have hovered around $460-475k since 2014; you have to go back to 2011 to be in the $400k range: https://creastats.crea.ca/mls/calg-median-price

- Also, in my experience, kids and families growing up today DO have a different upbringing regardless of what kind of house you live in. If your frame of reference is 20 years ago (i.e. circa 2002), then yeah house prices have increased substantially and those lucky enough to buy before the big jump in the first half of 2006 benefited greatly (I was not so lucky). I'm not sure what the solution is -- besides making more "missing middle" type housing -- but I would take our situation over Vancouver/GTA 7 days of the week...

[you&me]

Originally Posted by OptimalTates

I have no reason to disagree (or agree) with you but I'm not sure what that example proves if the house was not sold. Taking it to an extreme for illustrative purposes, does the same thing not happen if the house was worth $500,000 in 2021 and $750,000 in 2022?

Like accord, I've been pretty active in following the $1mm+ market and I generally agree with his sentiment that the market is not that robust.

Anecdotally, I see the same thing - lots of homes that have been previously for sale, languished (and presumably not sold) and now relisted at a similar price. Again presumably, sellers are hoping to take advantage of the "hot market", only to have their homes (again) sit on the market. I suppose there could be a lot of these homes being resold by the new owner a year or two later, but I get the feeling that isn't the case for the majority.

This is quite different than the run up to 2014, where this part of the market was very active. A lot of owners still haven't recovered to within 10-20% of where their values were back then, which I think partly explains some inelasticity (or stubbornness) in asking prices.

[Vinny01]

It has been 1 year since we moved into our house. I have kept an eye on the market and it definitely looks like we could have sold our previous duplex style infill for much closer to what we paid for it in 2014. I see most of the duplex homes in Glenbrook listed for north of $750k.

Looking at comparable homes to what we bought it is all relative. I have seen increases in pricing and very little inventory. The market appears to be a lot more frustrating than it was in late 2020/early 2021. It really feels like pricing has settled higher and the only homes that stay on the market are the ones that are clearly overpriced.

[Johnny199r]

Originally Posted by tvp2003

I appreciate the sentiment and sympathize with the likely frustration if you're someone who is trying to buy in this current market. But I would push back on a few points for the sake of discussion:

- Townhomes are an option between SFH and condos -- you may not get your own "backyard" but it can help bridge the gap if you're wanting more space for family.

- Why $350k? Is that related to "working class" income in Calgary, or house prices? It looks like median prices have hovered around $460-475k since 2014; you have to go back to 2011 to be in the $400k range: https://creastats.crea.ca/mls/calg-median-price

- Also, in my experience, kids and families growing up today DO have a different upbringing regardless of what kind of house you live in. If your frame of reference is 20 years ago (i.e. circa 2002), then yeah house prices have increased substantially and those lucky enough to buy before the big jump in the first half of 2006 benefited greatly (I was not so lucky). I'm not sure what the solution is -- besides making more "missing middle" type housing -- but I would take our situation over Vancouver/GTA 7 days of the week...

Do kids today have the same upbringing as the 90's? I don't remember ipads in the faces of 7 year olds all the time back then.

[Johnny199r]

Our apartment lease is up this year, and my spouse wants to buy a house and have her mom move in with us as she needs quite a bit of help and my spouse is paying for her mom's apartment now. So it makes sense financially to be paying for 1 mortgage rather than 2 apartments.

I'm really interested to see what effect these rate hikes are going to have (I'm not in Calgary). Are prices going to drop 10% by the end of the year? Are the simply going to level off and not increase?

It seems like demand is still sky high for SFH. Surely rate hikes will limit the borrowing power of some, but not all of those out looking.

I'm keeping my eye on Thursday's budget to see what other rumored measures the Trudeau gov't actually introduce to cool the housing market. I've read lots of things, but I don't believe he will do anything to mess with all the equity his potential voters have accrued.

[blankall]

Originally Posted by Johnny199r

Our apartment lease is up this year, and my spouse wants to buy a house and have her mom move in with us as she needs quite a bit of help and my spouse is paying for her mom's apartment now. So it makes sense financially to be paying for 1 mortgage rather than 2 apartments.

I'm really interested to see what effect these rate hikes are going to have (I'm not in Calgary). Are prices going to drop 10% by the end of the year? Are the simply going to level off and not increase?

It seems like demand is still sky high for SFH. Surely rate hikes will limit the borrowing power of some, but not all of those out looking.

I'm keeping my eye on Thursday's budget to see what other rumored measures the Trudeau gov't actually introduce to cool the housing market. I've read lots of things, but I don't believe he will do anything to mess with all the equity his potential voters have accrued.

I honestly don't think interest rates will make that big of a difference in any of the hot markets. All increases in interest rates do is price the bottom sector out, but the bottom sector is already priced out of the hotter markets in Canada.

There could be some effect on the fringe areas where bidding wars are taking place.

The lack of supply is just so extreme, that it will take something far more major than 1-2% increase in interest rates to have any significant effect on the market. I've ranted about the causes a few times, but you have the largest generation ever (millennials) entering the market and the second largest generation (baby boomers) don't seem to bet going anywhere. On top of that you have 300k new Canadians arriving every year. Every city in Canada has harsh zoning laws and is surrounded by valuable farm land that can in no way be replaced elsewhere, in one of the largest and emptiest countries in the world. There's no room for the market to let up. That would require actual physical space.

[The Yen Man]

Originally Posted by Johnny199r

Our apartment lease is up this year, and my spouse wants to buy a house and have her mom move in with us as she needs quite a bit of help and my spouse is paying for her mom's apartment now. So it makes sense financially to be paying for 1 mortgage rather than 2 apartments.

I'm really interested to see what effect these rate hikes are going to have (I'm not in Calgary). Are prices going to drop 10% by the end of the year? Are the simply going to level off and not increase?

It seems like demand is still sky high for SFH. Surely rate hikes will limit the borrowing power of some, but not all of those out looking.

I'm keeping my eye on Thursday's budget to see what other rumored measures the Trudeau gov't actually introduce to cool the housing market. I've read lots of things, but I don't believe he will do anything to mess with all the equity his potential voters have accrued.

Just my personal opinion, but if you're waiting for a 10% decrease from now, I don't think it will happen. At worst, I think it just levels off. But again, that's just my own personal feelings on it. Could totally swing your way and you get a good deal by waiting, but that'd be a gamble I'd be unwilling to take.

[blankall]

The trend for real estate in Canada will always be to increase over time. There will, however, be somewhat frequent adjustments downwards, followed by an ever steady rise. IMO the last adjustment was during Covid (that was the time to buy), and we are now in a bit of an upswing phase. I'm not a professional in this area though. The truth is no one really knows what will happen.

[Matata]

It's hard for me to imagine a significant downswing at this point, I think most people are very confident that we're now post-pandemic and we're not going to see the market hurt by uncertainty again. I still think the market is exceptionally hot right now (spring season+post-covid optimism) so it may be worth sitting back, but it'd depend a lot on your personal situation on what the best move is.

[Hemi-Cuda]

Originally Posted by blankall

The trend for real estate in Canada will always be to increase over time. There will, however, be somewhat frequent adjustments downwards, followed by an ever steady rise. IMO the last adjustment was during Covid (that was the time to buy), and we are now in a bit of an upswing phase. I'm not a professional in this area though. The truth is no one really knows what will happen.

It really didn't feel like it at the time, buying in 2020 felt like a gamble with so many businesses closed and the possibility of a massive global recession on the horizon. I am very glad we took that gamble though, makes up somewhat for buying a condo right before the 2008 crash

[blankall]

Originally Posted by Hemi-Cuda

It really didn't feel like it at the time, buying in 2020 felt like a gamble with so many businesses closed and the possibility of a massive global recession on the horizon. I am very glad we took that gamble though, makes up somewhat for buying a condo right before the 2008 crash

The thing about downswings is that they generally don't feel like the time to buy, and that's why the downswing has occurred in the first place. We bought partway through the post-covid upswing, so still got about 50% of the benefit from it. I should have bought earlier. As you say, didn't feel like the right time to buy.

[Sliver]

Originally Posted by Hemi-Cuda

It really didn't feel like it at the time, buying in 2020 felt like a gamble with so many businesses closed and the possibility of a massive global recession on the horizon. I am very glad we took that gamble though, makes up somewhat for buying a condo right before the 2008 crash

Yeah, I bought a condo in Canmore in December 2020. It felt borderline insane at the time and I straight up would not have done it if not for my wife's insistence. Turns out I probably underbought and should have gone bigger at the time, but definitely glad we didn't wait to get into the market there. Real estate there has gone bananas (moreso than its usual bananas) since we bought.

[Skaloper]

I wonder if Alberta will look into implementing a similar tax to Nova Scotia.

I love the comment that someone made. If it's becoming more expensive for first time home buyers why shouldn't it be more expensive to have "Summer homes".

"What about Nova Scotians who own summer homes (and there are many) and only spend 2-3 months a year at their 2nd homes? Why should they be exempted from this tax? If seasonal owners are contributing to the housing crisis, and if this new tax is being levied to fix the housing crisis, shouldn't ALL seasonal owners be subjected to the same taxation policy. What about Nova Scotians who own homes and go to Florida for 6 months? Their house sit empty for that time and they are putting very little into our economy. Are they contributing to the housing crisis? My point is that it is never cut and dried, but that we are going down the wrong path to target one small group of people and sending a message that we don't want people here who have chosen to make an investment in our beautiful province. Too many Nova Scotians still believe they are entitled to something that the rest of us have worked our whole lives to achieve. I was born in Newfoundland and I am a full time resident and home owner in Nova Scotia. Let's try to find a real solution to this housing problem by working smarter not looking for a quick solution that will only pit neighbour against neighbour."

[kevman]

Originally Posted by Harry Lime

The issue isn't so much looking at fair value for homes respective to other jurisdictions, or even recent historical sales, it's that the availability of homes at under $350K is almost non-existent. The only opportunities to get into the market at this price point are apartment style condos, or properties with extenuating circumstances. Working class Canadians are being turned into a sub-class. This changes the basic structure of a kids upbringing significantly from what 'we' were used to growing up. There seems to be a level of segregation that we are building into our communities that wasn't there 20 years ago.

You can't even move out of the city to upgrade your home. Commuter towns outside of Calgary and Edmonton are pretty much priced the same way now. Smaller cities in BC are priced at Calgary prices, so Kamloops and Vernon are priced out for most people wanting a detached home with a backyard for the kids.

It feels as if a way of life is being exterminated.

That's just wrong. There are 140 homes for sale on realtor.ca in Calgary right now under $400,000.

Literally the first one I looked at is a completely respectable home to raise a family in:
https://www.realtor.ca/real-estate/2...gary-shawnessy

Here's another closer to downtown if you'd rather trade a bedroom for location:
https://www.realtor.ca/real-estate/2...escent-heights

There are still affordable homes available but people's expectations have changed.

We wanted a single family home and wanted to be able to walk downtown so our price point put us in a small 2 bedroom bungalow. We're raising a family here just fine. One day I was doing some work on the house and found some old photos from the 60s. Guess what? The photos were a family with kids and they raised a family here too.

The argument of not being able to buy a home at $350k and raise a family is flawed when the very same homes that many calgarians grew up in are available at that price point.

[#-3]

Looking at that Shawnessy house, I don't know this for a fact, but a newly renovated house listing $50K - $60K below market comps would have me asking my realtor to check if it was a grow op.

[Slava]

Originally Posted by #-3

Looking at that Shawnessy house, I don't know this for a fact, but a newly renovated house listing $50K - $60K below market comps would have me asking my realtor to check if it was a grow op.

Maybe some realtors are taking that approach to incite a bidding war?

[GGG]

Originally Posted by Skaloper

I wonder if Alberta will look into implementing a similar tax to Nova Scotia.

I love the comment that someone made. If it's becoming more expensive for first time home buyers why shouldn't it be more expensive to have "Summer homes".

"What about Nova Scotians who own summer homes (and there are many) and only spend 2-3 months a year at their 2nd homes? Why should they be exempted from this tax? If seasonal owners are contributing to the housing crisis, and if this new tax is being levied to fix the housing crisis, shouldn't ALL seasonal owners be subjected to the same taxation policy. What about Nova Scotians who own homes and go to Florida for 6 months? Their house sit empty for that time and they are putting very little into our economy. Are they contributing to the housing crisis? My point is that it is never cut and dried, but that we are going down the wrong path to target one small group of people and sending a message that we don't want people here who have chosen to make an investment in our beautiful province. Too many Nova Scotians still believe they are entitled to something that the rest of us have worked our whole lives to achieve. I was born in Newfoundland and I am a full time resident and home owner in Nova Scotia. Let's try to find a real solution to this housing problem by working smarter not looking for a quick solution that will only pit neighbour against neighbour."

The person we are supposed to feel sorry for had her taxes triple to 27k per year.

This means she owns a 900k second home. Taxing non productive assets like this seems reasonable. At a minimum it will make people rent out when empty to offset costs.

[CliffFletcher]

The housing boom is largely demographic. Millennials are in their their prime family-starting years. The next two years will see the historic peak in the U.S. (probably Canada too) in the number of people hitting the age of 32, which is the average age of buying a first detached home today.

[jayswin]

Originally Posted by Mazrim

Today marks month number 9 for my house search. The positive right now is after a period of pretty intense inflation and everything going way over asking, the price range I'm in (which I'll admit has climbed an uncomfortable amount since the start of the search) is sort of stabilizing for the moment. Houses are still going quickly, but there's less going with no conditions and a lot more going right around asking price. Maybe that's more about the quality of these places then the market, but I'll mark it a positive for now.

The negative is that I'm getting the impression that investors are making this way harder than it has to be for everyone in Calgary. Great news for people looking to get some more value on their properties, but good luck finding a house after selling. My wife and I have been pretty patient so far but the grind is starting to wear us down. The search area we had set has slowly grown every month, and we're giving up on more and more things we wanted in the hopes of getting some hits.

As someone not in "the game" right now, I've heard many suggest that if you have sold recently it's likely a much better play to rent for bit and hope for the insanity to pass over to the point where you can actually go and look at places and buy normally instead of bidding and giving up a bunch of wants in your new home just for the sake of getting something.

That's not meant to sound condescending or anything, just personally I wouldn't be willing to do what it takes to close a sale right now for a place that will be my home for years. To drop $400-$600k on a sale, I need waaaay more control and boxes ticked than buyers are giving into right now. It's absolutely insane.