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Old 02-13-2008, 01:54 PM   #161
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Originally Posted by Wookie View Post
Actually my purchase was exactly what it was meant to be. A place that I could afford at the time, for what i thought was a reasonable price, close to everywhere I need to be, at a time when I needed somewhere to live. This week, this coming summer mean nothing to me. Probably's, could have's, should have's don't play into my decision making.

It would have been wise for you (or someone else, or everybody else) to sell their house in the spring last year and buy this coming summer! ???... Make sense? Yeah - doesn't work that way..
Haha, so true. I understand where you're coming from, you bought because you wanted and/or needed, but there were a lot of people that bought for the fear of being priced out, didn't do them any good...in fact, they probably contributed to the insanity more than high oil prices.
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Old 02-13-2008, 01:55 PM   #162
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Is it worse to throw money at the banks in interest charges and maintenance cost?
The one default on that calculator is something like 7.5% interest on the mortgage. I dropped it down to 6- although I'm only paying 5.2% now.

Also bump that rent up to $1500 from $1000. More realistic in today's market in Calgary.

Don't get me wrong- renting is right for many people; including myself not too long ago.
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Old 02-13-2008, 02:55 PM   #163
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Housing affordability is at the worst since previous bubbles.

I think this sentence sums up why you think its better to rent than buy. You think that the bubble will burst and you will run around and pick up homes for next to nothing I assume?

You can't surely believe that the lack of security in renting for the long-term is worthless, even if you believe that the costs of home ownership are too onerous? I agree with Cowperson...one day you will be forced out of your rental property due to a condo-conversion or huge rental increases, and no doubt complain along the way that we need rent controls or something similar to protect to poor average guy (who in this case simply lacks the foresight to make an adequate decision!).
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Old 02-13-2008, 03:07 PM   #164
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I think this sentence sums up why you think its better to rent than buy. You think that the bubble will burst and you will run around and pick up homes for next to nothing I assume?

You can't surely believe that the lack of security in renting for the long-term is worthless, even if you believe that the costs of home ownership are too onerous? I agree with Cowperson...one day you will be forced out of your rental property due to a condo-conversion or huge rental increases, and no doubt complain along the way that we need rent controls or something similar to protect to poor average guy (who in this case simply lacks the foresight to make an adequate decision!).
No, Radley77 will have invested the difference wisely and will be okay.

That is, as long as stock in SuperSecretAwesomeInvestmentInc perform as expected.
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Old 02-13-2008, 03:31 PM   #165
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I have no problem with people contributing to a thread with critical views, opposing views, or even negative views. But he just comes across as what Fotze describes as "People who can't afford to get into the market foresee double digit losses."

The post on the other forum saying it was their job to go to other calgary forums and enlighten them to the housing bubble (I posted it earlier). As well as being a petroleum engineer + wife who is "senior manager"...... Riiiiight, and with those types of positions they couldn't have bought a place a mere 24 months ago before the run-up and have been renting the whole time and prior because it's a better option.
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Old 02-13-2008, 04:00 PM   #166
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Here is some analysis I have done...

Just to make things clear, I am a capitalist... I'm not a fan of a rent controls.

However, I just don't believe house prices are sustainable...

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Old 02-13-2008, 04:15 PM   #167
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Originally Posted by Radley77 View Post
Try this rent vs. buy calculator:

http://www.ic.gc.ca/epic/site/oca-bc.../ca01821e.html


Also, here is a rental yield calculation for a two bedroom condo in Calgary:

December 2007 Calgary Condo Price = $304,719
Residential Tax Rate = 0.0054614
Annual Taxes = $1,664
2007 Calgary Two Bedroom Condo Rent =$1089/month
Condominium Fees = ~$150/month
Calgary Rental Yields = (1089*12-150*12-1664)/304719 = 3.15%

Please tell me where in Calgary you can rent a 2 bedroom condo for $1089 a month. I'd like to ditch my mortgage and rent too if that's the case. I just rented out three 1 bedrooms for $1300 each.
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Old 02-13-2008, 04:16 PM   #168
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Originally Posted by Radley77 View Post
Here is some analysis I have done...

Just to make things clear, I am a capitalist... I'm not a fan of a rent controls.

However, I just don't believe house prices are sustainable...
care to provide some analysis so us laymens can follow your very fancy chart. (looks good, just want to know what I am seeing)
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Old 02-13-2008, 04:36 PM   #169
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care to provide some analysis so us laymens can follow your very fancy chart. (looks good, just want to know what I am seeing)
from what i can tell the carrying costs are higher then they used to be but no where near where they were for the bust in the 80s,further more it looks like the costs have somewhat stabalized further reducing the chances of a decline.

I think the carry cost increase has more to do with Calgary as a city, becoming a major city and the increased costs that go along with that.
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Old 02-13-2008, 05:01 PM   #170
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That's one thing to consider as well, while affordability is definitely low, compare it to other cities, either in Canada or major cities in the rest of the world, and it's not all that bad.. possibly one reason why inmigration has slowed but immigration hasn't.
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Old 02-13-2008, 05:48 PM   #171
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I think there is some confusion from both sides.

Those of us saying it is not a good time to buy and it is a better time to rent are not saying it is ALWAYS better to rent.

What we are saying is that RIGHT NOW it is better to rent.

3 years ago it was better to buy. 6 months from now it might be better to buy. But looking at pricing versus long term scarcity it is currently better to rent.

In fact someone who bought a suburban condo or home 6 months ago is likely down $30,000-$60,000 IF they could even sell it right now. Not sure how negative equity is ever better then renting?



As for Calgary being cheaper then comparable markets, that is a joke. No comparable city Calgary's size has pricing from the core to the far perifery like we do. Toronto and Vancouver are both MUCH bigger cities, that are on the water (less developable land), and yet BOTH have cheaper pricing in the far flung suburbs. Most American cities with ~1M people have pricing a fraction of current Calgary pricing, usually at or below $250,000 (or even <$200,000) for a mid-size suburban home (v. $500,000).



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Old 02-13-2008, 05:56 PM   #172
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I think if you plan on living in the home for the next 25+ years there is no bad time to buy. There may be better times than others but no bad time.
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Old 02-13-2008, 06:00 PM   #173
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I just looked up Denver, Dallas and Minneapolis - all large diverse relatively wealthy American cities. All have metro areas many times the size of Calgary and therefore should have more self-sustaining population demands on housing prices and far more scarcity in prime product.

All have average housing prices BEFORE the current slump of between $225,000 and $260,000.

And all have very few districts in the entire metro-area's with average pricing above our city wide average. Or in other words, not even the wealthy are shelling out $500,000 for there wealthy-people homes - the same amount the middle class is expected to spend for the privilage of living in McKenzie Town or Royal Oak.




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Old 02-13-2008, 06:01 PM   #174
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Originally Posted by Claeren View Post
As for Calgary being cheaper then comparable markets, that is a joke. No comparable city Calgary's size has pricing from the core to the far perifery like we do. Toronto and Vancouver are both MUCH bigger cities, that are on the water (less developable land), and yet BOTH have cheaper pricing in the far flung suburbs. Most American cities with ~1M people have pricing a fraction of current Calgary pricing, usually at or below $250,000 (or even <$200,000) for a mid-size suburban home (v. $500,000).
If you're talking the far flung suburbs of Toronto then you should be comparing more to the bedroom communities like Cochrane. None of the suburbs in Calgary are anywhere near as far away as some of the Toronto suburbs.
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Old 02-13-2008, 07:22 PM   #175
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Originally Posted by Claeren View Post
I think there is some confusion from both sides.

Those of us saying it is not a good time to buy and it is a better time to rent are not saying it is ALWAYS better to rent.

What we are saying is that RIGHT NOW it is better to rent.

3 years ago it was better to buy. 6 months from now it might be better to buy. But looking at pricing versus long term scarcity it is currently better to rent.

In fact someone who bought a suburban condo or home 6 months ago is likely down $30,000-$60,000 IF they could even sell it right now. Not sure how negative equity is ever better then renting?



As for Calgary being cheaper then comparable markets, that is a joke. No comparable city Calgary's size has pricing from the core to the far perifery like we do. Toronto and Vancouver are both MUCH bigger cities, that are on the water (less developable land), and yet BOTH have cheaper pricing in the far flung suburbs. Most American cities with ~1M people have pricing a fraction of current Calgary pricing, usually at or below $250,000 (or even <$200,000) for a mid-size suburban home (v. $500,000).



Claeren.
Bingo. I have always been pro buy, but there are times when you're better off waiting it out a bit. That time is now in Calgary. There is no reason why a house in a praire city with very little in ways of good climate, water etc should cost 500K. When the economy goes down you're stuck with a huge mortgage on a crappy house in a crappy place. Some will argue that the economy won't come down here, but they forget that it takes many a moon to pay off a 500K house. There are some tough times ahead, the only question is when and how tough.

And comparing Calgary to Vancouver and Toronto is fruitless, Calgary is a Praire Village compared to both.
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Old 02-13-2008, 07:28 PM   #176
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Bingo. I have always been pro buy, but there are times when you're better off waiting it out a bit. That time is now in Calgary. There is no reason why a house in a praire city with very little in ways of good climate, water etc should cost 500K. When the economy goes down you're stuck with a huge mortgage on a crappy house in a crappy place. Some will argue that the economy won't come down here, but they forget that it takes many a moon to pay off a 500K house. There are some tough times ahead, the only question is when and how tough.

And comparing Calgary to Vancouver and Toronto is fruitless, Calgary is a Praire Village compared to both.
so lets say i am leaning to agree that the market is going down right now. i have a house that i bought in 1997 and want to upgrade to a nicer house.

my own house is worth less, but if it is going down each quarter (as some are suggesting) why shouldnt I flip now?
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Old 02-13-2008, 07:30 PM   #177
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...but they forget that it takes many a moon to pay off a 500K house.
It takes just as many a moon to pay off any other mortgaged amount.
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Old 02-13-2008, 07:35 PM   #178
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There is no reason why a house in a praire city with very little in ways of good climate, water etc should cost 500K.

And comparing Calgary to Vancouver and Toronto is fruitless, Calgary is a Praire Village compared to both.
A prairie village? C'mon that's a bit harsh! Lethbridge is a prairie village! Vancouver has a longer spring and shorter winter, Toronto backs onto a filthy lake!

I don't know... I've got two story views of the mountains. It's in a nice green or brown or snowy (depending on season) parky kind of area. decent neighborhood, double car garage, 20 minutes from downtown.

People compare the prices to Toronto and Vancouver. I know someone selling a place in TO, attached row housing, that's 10 minutes from downtown, has no view, backs onto an alley, the detached garage is permanently graffiti'd, is about 100 years old, and can only legally park on one side of the road. This house is $500 - $600k.

You say that's in line with what people are paying in Calgary? Yeah it is. But in Calgary you can get a house that's twice the size, a back yard, double car garage (may or may not have view), large streets to park on, retail strips close by that you can drive to, park at, and drive home from. There is often a C-train within 10 minutes drive, no smog, less crime, less filth, and better all around services. (gym, ymca, pool, rink).

I think things may have gotten ahead of themselves pricing wise - but I don't think it's obscene.

There is a reason Calgary does so well in all these "Best places to live in the world" surveys.

Last edited by Wookie; 02-13-2008 at 07:41 PM.
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Old 02-13-2008, 07:36 PM   #179
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It takes just as many a moon to pay off any other mortgaged amount.
Not exactly true because a smaller mortgage allows you to shorten the term to pay it down. There's no rule that says that everyone has to have a 25 year mortgage.
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Old 02-13-2008, 07:41 PM   #180
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It takes just as many a moon to pay off any other mortgaged amount.
Depends on one's income. Some make enough that they can afford to pay that 500,000 house off in 25 years while others may need a 40 year or long mortagage. Add to the fact that the longer the mortgage the more interest one has to pay off.
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