Been looking around MLS recently as I'm probably a year or so away from buying another place. From an exchange on the Realtor forum we discussed a house that sold for 161k in 1983, 344k in 2004 and is listed for 670k in 2011 (now). Does that not seem insane?
I bought a townhouse for $350k in 2008 a few months after we had come down from the high. That seemed okay. In 2009 it seemed crappy, 2010 so,so, 2011 a bit better. I knew it had appreciated substantially in the recent years and was okay with that.
Now looking to upgrade and to finding a nice house that I could have bought in 04 for less than my townhouse that I'm now thinking holy crap I paid too much.
The price of a loaf of bread is double what it was in 2004. The FAO food price index is double what it was in 2004. The price of oil is double what it was in 2004. The Bank of Canada Commodity Price Index is almost double what it was at the beginning of 2004. The price of gold is four times what it was in 2004. Money just isn't worth what it used to be.
The price of a loaf of bread is double what it was in 2004. The FAO food price index is double what it was in 2004. The price of oil is double what it was in 2004. The Bank of Canada Commodity Price Index is almost double what it was at the beginning of 2004. The price of gold is four times what it was in 2004. Money just isn't worth what it used to be.
Yes I'm perfectly aware of inflation. I'm also perfectly aware of the value and cost of money. It's also likely a lot of the inflation adjusted items you just commented on are reflective of what's going on in another continent. While there will be some adjustments here too based on labour, materials, etc. I wonder if the ratio to Calgary housing prices is equally reflective of that. Is food in Canada cheaper than it was 20 years ago, or 50 years ago based on real wage growth? How does housing compare?
Alberta average weekly wage:
January 2011 $1,014.00
June 2006 $787.00
Can't find 2004
median income for families in and around Calgary was:
2010 - $122,459
2006 - $82,363
2004 - $77,800
2001 - $76,952
Is 2011 going to be $155,600?
The average apartment rent for Calgary was:
$716 in 2003
$721 in 2004
$970 in 2010
$951 in 2011
Not $1,440.00 in 2011?
Yes, I'm aware interest rates also play a significant roll in the cost/value of housing. All I was saying was $350k for a townhouse in 2008 when the same amount could have bought a really nice SFH in a great community in 2004 is a defeating thought. It's even more defeating when the $350k townhouse is worth maybe $310 - $330 now (yes maybe that SFH could have sold for $800k in 2008). It's also kind of scary that despite my comments about it being defeating, I don't even think $670k seems that expensive. Anyway, I think a lot of people were assuming interest rates would play a roll in real estate prices coming down over the next few years as well a lot of people thinking job growth and oil and gas prices would play a roll in prices going up. It looks like the interest rates aren't going to change much - so it will be interesting to see what transpires over the next 10 years. Interest rates sure are interesting.
Edited to include I did a lot of random searching for these numbers. You might be able to find slightly different ones by finding other publications, reprints, news stories, etc. I just pasted what I had time to find.
Last edited by ranchlandsselling; 08-12-2011 at 10:55 AM.
Most banks have now pushed back their forecasts for interest rate hikes - possibly into 2012. Perhaps a good thing for sales numbers in the short term. Early August numbers show pending sales numbers continue to slide closer to the 2010 numbers. We're now down to 260 - graph below hasn't been updated yet and it should bounce back a bit with the weekly trends:
Year to date, 2011 is sitting 7% higher than last year and Mike F's stats show this is tracking to be about the 2nd worst in a decade. Hardly the end of the world though (and the stock market is way more interesting right now too!) It will be interesting to see how interest rate hikes will affect things down the road though.
Been a little busy with work lately (and watching Europe run around in circles has been more interesting) but somebody mentioned that there wasn't a summary tossed in here in a while. Mike F. continues to be a great source of sales data and his blog is great - very balanced I would suggest actually:
To be honest, it looks like nothing has really changed in a last while. Sales are a little better than last year but overall are still 2nd worst in the decade even with the growth in the city over the last 10 years and the sweet, sweet oil price bonuses we've been getting in town:
Canadian household debt keeps climbing like crazy (but perhaps some indications/hopes that it is slowing very slightly.) The Bank of Canada still points out that it is a big concern and called it the "greatest risk to the domestic economy". Most of the major banks have also been pointing out their concerns as well for a while now on debt and housing:
But if you had $5MM, you could have bought this baby in Elbow Park a few days ago!
But really, none of this is particularly new or "omgwtfpewpew doomsday worthy". It's just a continuation of the trend for the last while. But I do find it interesting how a lot of the economic numbers/news is about to dealing (or not being able to deal) with debt in some form or another. Though the wrangling in the US and the Euro is more interesting to watch than any kind of housing.
Interesting methodology for the graph labelled "Chart 26" above. They took Teranet data from 1999 onwards, and estimated before that. Interestingly, looks like the graph went from pretty flat to a 45 degree incline just after 1999.
Correlation != causation, but I'm always suspicious when the data and the methodology change at the same time.
^ Hmm that's a good point. The transition from before 1999 and after appears to be on trend so perhaps it is okay; but it is still very good to point out.
Well all I keep hearing is that there is a major labour shortfall happening in Alberta. If we start importing labour like we were in 2002 and beyond, I would expect that house prices should at some point go up. I know that my house has gone up in value from around $550k (2009) to $600k (2011). I live in an attached infill, and my neighbours place (which is a mirror of mine), has been sold 3 times since 2005. My neighbours stats stats only for anyone interested:
Purchase price 2004 $450 000
Sale price 2006 $680 000
Appraisal price 2009 (was about to sell) $550 000
Sale Price 2011 $600 000
I live on 26 ave SW, so it's a bit of an uppity neighbourhood.
The Following User Says Thank You to Tron_fdc For This Useful Post:
Mike F's website used to show what recent listings had sold for as well as their historical sales price in the past back to 1990's(?)
I recall doing some sample tests over a few weeks during the spring/summer this year - the stats were showing that roughly half of all the sellers were actually negative after paying the standard realtor fees. That of course would not include interest payments, moving costs, sunk costs for renos (though it would obviously account for higher sales prices due to the reno.)
Much of that would be due to people who bought during the boom and then had/wanted to sell thereafter. I can't seem to find that link on his site anymore. Did he move it, anybody else see it now?
EDIT: Ahhh here we go (sorry if it seems kinda dbagish to quote myself):
Quote:
Originally Posted by chemgear
You piqued my interest about this component and I had a more detailed look. On Mike F's website you can see the recent sales and what they were originally purchased for in the last seven years.
The most recent sample of ~100 SFH sales (in the last few days) show that almost exactly half of them lost money when they sold, net after standard realtor fees. That does not even include any kind of mortgage interest, property taxes, moving costs, repairs, etc. over time. Heck, that doesn't even include properties that had sunk costs for renovations over the last 7 years for a potential uptick in value.
Average loss was more than $50,000 - a bit painful for just a few years.
^ His spreadsheet didn't indicate that information. All it had was the properties in the far left column listed down and the previous sales prices across year by year marching into the past going left to right.
Oh yeah, if we had that knowledge we'd all be doing something else. Well maybe we'd all still be posting in this forums whilst sitting on our own personal islands.
It's also likely a lot of the inflation adjusted items you just commented on are reflective of what's going on in another continent. While there will be some adjustments here too based on labour, materials, etc. I wonder if the ratio to Calgary housing prices is equally reflective of that. Is food in Canada cheaper than it was 20 years ago, or 50 years ago based on real wage growth? How does housing compare?
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