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Old 01-17-2008, 09:45 AM   #101
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Calgary house prices to inch toward $500,000

Real estate board predicts 5% gain in 'normal' market

http://www.canada.com/calgaryherald/...b-419390655464

In its 2008 forecast Wednesday, real estate board president Ed Jensen said the MLS average will increase by five per cent this year to $495,800 while condominium prices will rise by six per cent to an average of $335,300.

Total sales will dip by five per cent for both the condo and single-family markets, to 7,700 and 17,500 respectively, compared with 2007.

Lai Sing Louie, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said the organization's forecast for 2008 is similar to the real estate board's.

"We're looking at about 5.5 per cent moderation in MLS sales and our price growth is in the same ballpark. We're looking around the 3.5 to five per cent level, too," said Louie. "There is a lot of supply out there. Going into the last part of the year we saw demand ease off. Some of that was because of the higher prices, but also there is a lower level of net migration that we're seeing coming to Alberta."
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Old 01-17-2008, 09:47 AM   #102
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Originally Posted by troutman View Post
Calgary house prices to inch toward $500,000

Real estate board predicts 5% gain in 'normal' market

http://www.canada.com/calgaryherald/...b-419390655464

In its 2008 forecast Wednesday, real estate board president Ed Jensen said the MLS average will increase by five per cent this year to $495,800 while condominium prices will rise by six per cent to an average of $335,300.

Total sales will dip by five per cent for both the condo and single-family markets, to 7,700 and 17,500 respectively, compared with 2007.

They also forecasted a 30% price increase last year.. Didnt happen if I remember correctly..
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Old 01-17-2008, 11:02 AM   #103
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Wouldn't interest rates go down with the US economy going south? To keep our dollar down vs. theirs, and to make sure our economy doesn't cool too much? Inflation is an issue in Alberta, not not really nation wide so they won't raise rates just for Alberta.

Exactly.

If Calgary has too much inflation and gets too expensive people will just move away. Generally speaking, barriers to provincial immigration are low so labour can migrate. If wages support costs of living, and people are happy with the quality of life, they will continue to move here. If prices of housing here are too high they will go somewhere else.

In this forum we saw that with Shane. He moved here found a place after staying here a while decided it was too expensive and moved back to the east coast.

So while Calgary and Edmonton will bring the average inflation rate for the country up, as long as overall country wide the rate is within the Bank Of Canada's acceptable limits, they won't be required to increase the interest rates.

If anything, there is pressure right now to lower the rates to keep the Canadian dollar from getting too high vs the American dollar.
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Old 02-05-2008, 01:58 PM   #104
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http://www.canada.com/calgaryherald/...e07c08&k=18782

Average MLS sale price seen rising despite lower demand, job growth

The CMHC says average MLS sale prices for all residential properties are expected to increase to $429,000 this year from an estimated $414,066 in 2007. In 2009, it is forecast to hit $450,000.
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Old 02-05-2008, 02:18 PM   #105
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Originally Posted by troutman View Post
http://www.canada.com/calgaryherald/...e07c08&k=18782

Average MLS sale price seen rising despite lower demand, job growth

The CMHC says average MLS sale prices for all residential properties are expected to increase to $429,000 this year from an estimated $414,066 in 2007. In 2009, it is forecast to hit $450,000.

I don't completely buy that.. There was 12,000 properties listed in November according to the CREB website.. They suddenly vaporized in December and are now coming back on the market.. Me thinks the sudden glut of supply will make prices head down a bit.. I can't imagine they'll go up if theres no forces driving the price increase.. I see alot of wishful thinking coming from the real estate industry lately..
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Old 02-05-2008, 02:36 PM   #106
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They also forecasted a 30% price increase last year.. Didnt happen if I remember correctly..
Really Edmonton forecast 13% and by end of year that was about what it was. At one point in time it was up like 27%, but by end of year their numbers in the Edmonton region were pretty accurate. This year the EREB has forecast 1% growth. Which I guess is good for people trying to save up for a house. Bad for people like me who'd like to move to B.C. where the market should crash...but hasn't yet, and I don't know if it will.
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Old 02-05-2008, 02:43 PM   #107
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Originally Posted by troutman View Post
http://www.canada.com/calgaryherald/...e07c08&k=18782

Average MLS sale price seen rising despite lower demand, job growth

The CMHC says average MLS sale prices for all residential properties are expected to increase to $429,000 this year from an estimated $414,066 in 2007. In 2009, it is forecast to hit $450,000.

But price growth is being driven by LAST YEARS (price inflated) new home sales. Last years prices do not show-up in the average price until posession is taken this year.


There is going to be a LOT of data supporting higher prices in the next 6 months. It is a VERY specific and dedicated plan being put forth by the home builders association and various related interests to clear their inventories. In other words it is propaganda - virtually all of the data available you will quote is directly issued or indirectly issued (submitted data being easily manipulated) by people in the industry.

I don't know of any legitimate third-party oversight?


After that they won't care that prices fall, and will simply wait it out as the little guy takes the big fall before they re-enter the deflated markets with much more room to (re-)grow again.



Furthermore, EVERY person i know who would want to sell a house or justify the price of their house (including the people in the industry) is counting on prices growing in the spring. The funny part is (1) why would people sit around all winter with prices falling $30,000+ in many segments and just wait to pay more months later and (2) NOT ONE person i know who wants a house is waiting until spring. They either bought over the winter or are waiting until next winter because they know after this big push prices will start dropping. Something has to give.


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Old 02-05-2008, 03:06 PM   #108
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Originally Posted by Claeren View Post
I don't know of any legitimate third-party oversight?


Claeren.
City Tax Assessments? Though, they usually seem to be below market value.

You're right - people should buy before the Spring. Most don't, probably due to the school year, and not wanting to move children in the middle of the year.
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Old 02-05-2008, 03:15 PM   #109
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City Tax Assessments? Though, they usually seem to be below market value.
That is one way to look at it....

Of course inflated market values may just be above the more realistic true property values that the city has more interest in realistically valuing over the long term then speculators over the short term?

In fact i would suggest most city valuations are also high. But that they take a middle ground between inflated market value and true value - finding a good balance between the two more represntative of long term trends. So if your market value is $400,000 and the city says $380,000 i am guessing long term value is $360,000. Just my opinion though.




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Old 02-05-2008, 03:44 PM   #110
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Quote:
Originally Posted by Claeren View Post
There is going to be a LOT of data supporting higher prices in the next 6 months. It is a VERY specific and dedicated plan being put forth by the home builders association and various related interests to clear their inventories. In other words it is propaganda - virtually all of the data available you will quote is directly issued or indirectly issued (submitted data being easily manipulated) by people in the industry.
Claeren.
First off I have to agree with you completely on this, why would real estate companies say prices are going to fall? Does not seem like a good idea to me.

I know prices are strongly associated with supply and demand (and yes I am an economics major) but lets think of some of the contributing factors to supply and demand.

Warning: Obviously this is speculation and I am far to lazy to look for print to back up all my comments, its more for a discussion purpose.

1) Falling price of lumber - Softwood lumber has gotten crushed lately and due to the real estate market in the USA (less new home starts) I doubt its going to recover anytime soon. Lumber prices have fallen across the board meaning it costs bulders less to build a house now.

2) Labor - Not sure how many people know someone that does cribbing, framing, etc. Let me tell you, their rates have been dropped significantly. The labor costs will come back down to earth (like not paying $40/hr to some drug addict to frame your house who's only experience in building was with legos when he was 5)

3) New home starts - They have almost stopped (spec builds). Most major builders are not building on spec anymore as sales have slowed.

4) Immigration - Will Calgary get another 25,000 people this year? Who can actually afford our houses? With the oil patch starting to slow down (ask any well tester who recieved the fantastic 'your job is not guarenteed this year' letters) continue to affect jobs?

5) Emmigration - Are prices just too high and people will continue to flock back to Sask. (Saskatoon went up 50% last year)

5) Land - We are not like Vancouver where they have limited land and have to build up. I believe we have hit the peak (or close to) on prices.

6) Flippers - How many people have more then 1 house/condo right now and are "renovating it" to be flipped. I know plenty. When the housing market gets flooded with these it often skews the results of supply and demand. How many houses are flippers selling to flippers?

There is a lot to take into consideration and like always nothing is a guarentee. I would say that I can see house prices going lower in the near future then higher. Also with the recent activity of the stock market people may be a lot more sceptical when they are looking at dropping 500k+ on a new house when they lost 10%+ this month.

Food for thought. Flame away
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Old 02-05-2008, 03:50 PM   #111
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Your points on lumber and labor are nice thoughts, but unfortunately if the market will pay the old prices, they will charge them. Since the market has been paying the old prices for 2 solid years now, it would be foolish for them to lower prices based on material costs being lower.
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Old 02-05-2008, 04:07 PM   #112
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Some random stats

- SFH and Condo average and median prices for January were up from December.
- Inventory at end of month January was double what it was in January 07
- Sales are down, although they did pick up towards the end of the month

The thing that interests me, is if everyone "tradtionally" waits until spring to list there place, what is that going to do the already high inventory levels? I've also heard that there are several large condo projects that will be completed and coming on the market soon, so there is more inventory there.

IMO, there is way more room for house prices to go down then there is for them to go up. I've been watching the market closely for a month, and I think the next few months are going to be interesting. I have no idea what things are going to look like come spring, but I suspect a year from now, prices will look very different.

Just my thoughts...
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Old 02-05-2008, 04:17 PM   #113
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http://www.canada.com/calgaryherald/...e07c08&k=18782

Net migration in Alberta was a record in 2006 at 81,000 people. The numbers are not yet in for 2007, but the CMHC is estimating net migration to be 47,000 and that is forecast to decline to 42,000 in 2008.

For the province, the report said the yearly price growth for resale homes in 2008 will be about four per cent, the weakest gain in 12 years.
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Old 02-05-2008, 04:23 PM   #114
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City Tax Assessments? Though, they usually seem to be below market value.

You're right - people should buy before the Spring. Most don't, probably due to the school year, and not wanting to move children in the middle of the year.
Tax assessments arent the best indicator of market value.. Alot of people got their assessments this year, and they are above market value in some cases, my family got one that my parents are having re-assessed.. I think this is another way for the city to gouge people for more taxes without actually increases taxes.. Historically in this city they have been 5-10% below market value, now the are close to or above.. Bronco strikes again..
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Old 02-05-2008, 09:44 PM   #115
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First off I have to agree with you completely on this, why would real estate companies say prices are going to fall? Does not seem like a good idea to me.
Real estate companies are saying the same thing to themselves, their families, friends and anyone else.
I understand your hesitation to belief them, but they have a lot of money on the line, and actually do belief the numbers they are giving.

If they truely thought the market was gonna decline, they would pack up and find a better market.
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Old 02-06-2008, 09:19 AM   #116
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If they truely thought the market was gonna decline, they would pack up and find a better market.
Which is what? The USA has tanked, the east coast isn't doing much better, Sask? Look at the stats there, people have already moved there. If the USA goes into a recession house prices in Canada will fall. The US is Canada's largest importer and exporter and we are directly related to them. Like the old saying goes, when the US sneezes the whole world catches a cold.

Just remember, right now we live in our own little bubble in Alberta and like any bubble it will burst. (or slowly deflate to a normally pressured bubble )
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Old 02-06-2008, 10:13 AM   #117
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Originally Posted by burn_this_city View Post
Tax assessments arent the best indicator of market value.. Alot of people got their assessments this year, and they are above market value in some cases, my family got one that my parents are having re-assessed.. I think this is another way for the city to gouge people for more taxes without actually increases taxes.. Historically in this city they have been 5-10% below market value, now the are close to or above.. Bronco strikes again..

I think you may have a slight misunderstanding of how the tax system works.
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Old 02-06-2008, 11:44 AM   #118
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I think you may have a slight misunderstanding of how the tax system works.
He's not alone, look at the lineup complaining about their assessment on the 10th floor at city hall every year...
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Old 02-06-2008, 12:05 PM   #119
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He's not alone, look at the lineup complaining about their assessment on the 10th floor at city hall every year...
Yeah, I think it's kind of interesting.
My tax bill this year went up something like $40 from last year, and this was after the assessed value went up almost $150k.
I thought the assesed value was probably ~$30k too high, but why the hell would I take the time to fight that so I can save less than ten bucks?
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Old 02-06-2008, 01:33 PM   #120
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^^ My apologies.. I was working off the assumption its factored based on the assessed value of your house..
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