Real estate in Calgary - another bubble?

[chedder]

Originally Posted by Mull

Could be buried in this thread already but BNN over the last few days had a top story about a potential Canadian housing bubble. Not sure how legit Rosenburg is, but they refer to that person for a lot of stories
https://www.bnnbloomberg.ca/housing-...berg-1.1579481

Roseburg, for what it's worth, is a perma bear about everything all the time.

[Regular_John]

Originally Posted by Table 5

Funnily enough, I may have a townhome/infill for sale coming up in the not too distant future in that general area. It's in Bridgeland (which is where the coolest of Renfrew buyers want to be anyway).

In all seriousness, send me the listing if/when it goes up. We’re not a position to be writing offers till our place sells, but I’m keeping an eye on that area of the city.

[Vinny01]

I am interested in what approach people take for moving from a home you own to purchasing a new home.

We just went through this and my wife was adamant about finding the house we want first and securing a deal then immediately listing our price to sell. Her biggest concern was us selling our house and being forced to buy something we didn’t love or moving into a short term rental while moving all of our possessions into storage. My fear was us not being able to sell our place and having to basically fire sale it leaving thousands on the table. We ended up going with her route and had our place ready to list the second they accepted our offer. It is important to note that we would not make the sale of our house a condition of buying.

Luckily our realtor had clients he showed the photos to before we listed and when our offer on our new house was accepted on a Saturday his clients were in our place Sunday and luckily loved it as much as the photos and purchased it for $12k less than asking.


Are others taking the other approach of selling your place first then getting out in the market to purchase?

[Erick Estrada]

Originally Posted by OldDutch

I wouldn't do windows in hopes you will get more on your selling price. I did mine 10 years ago and it cost me $25K and that was with a crazy deal through a person I knew. I can only imagine what they are now.

We bought the house 2 years earlier and didn't even check the windows. We just wanted the house. Then we move in and figure out the windows are 30 years old and failing. So we did the upgrade.

That said, my neighbor has the exact same house and is still rocking those 40+ year old windows.

I think windows are a net neutral thing at best. Better to do those things when they have to be done. Most people won't even look at it when buying.

I agree with this. When we were negotiating the purchase of our current house in the summer the seller kept coming back and saying they put in new windows and weren't going to come to our offer. We said we didn't care and held firm to which they eventually met our price and we agreed to move up the possession a month as a concession. The house we got out of badly needed new windows and we ended up selling that house in less than 48 hours for more than our asking price and multiple bidders never even mentioned the windows. Inf fact I put a new deck in months before selling because the old one was in bad shape and that was probably a waste of money as I don't think we got that money back in the sale.

[GoinAllTheWay]

Originally Posted by Vinny01

Are others taking the other approach of selling your place first then getting out in the market to purchase?

We are wrestling with exactly the same questions/concerns. Big difference for us is we are trying to sell a condo and buy detached house so yikes....

For me, the biggest concern was how did buying first affect how much mortgage we can get for new house.

We have submitted our paperwork to a mortgage broker who is going to look into this for us. We have an apt tomorrow at noon to discuss results.

Nervous/excited.....

[Sliver]

Originally Posted by Vinny01

I am interested in what approach people take for moving from a home you own to purchasing a new home.

We just went through this and my wife was adamant about finding the house we want first and securing a deal then immediately listing our price to sell. Her biggest concern was us selling our house and being forced to buy something we didn’t love or moving into a short term rental while moving all of our possessions into storage. My fear was us not being able to sell our place and having to basically fire sale it leaving thousands on the table. We ended up going with her route and had our place ready to list the second they accepted our offer. It is important to note that we would not make the sale of our house a condition of buying.

Luckily our realtor had clients he showed the photos to before we listed and when our offer on our new house was accepted on a Saturday his clients were in our place Sunday and luckily loved it as much as the photos and purchased it for $12k less than asking.

Are others taking the other approach of selling your place first then getting out in the market to purchase?

I couldn't do it the way your wife prefers. The stress of buying a house and then not being able to sell mine would be too much. I need to know how much money I have down to the penny before committing to the next big purchase. Plus the thought of not being able to sell my house if there was a sudden change in the market after purchasing the new house would be torture.

You can always rent a place if you can't find a new house. Unappealing for sure, but more palatable to me than the worse alternative.

[Erick Estrada]

Originally Posted by Vinny01

Are others taking the other approach of selling your place first then getting out in the market to purchase?

It really depends on the shape of your current house, the desirability of the neighborhood, your money situation, and if you find a property you really want. With two boys and a dog my old place got a little beat up and needed work that would be easier to do with us out of the house so we found a place we liked and after some negotiations and waiting the sellers out got it. Over the summer we purchased that house and to get the price we wanted took a 2 month possession date. I didn't even put the old house up for sale until we were living in the new one for 1.5 months as my brother and I in evenings and weekends repainted every room in the house and cleaned it up to look nice. We could afford to carry both mortgages (we had less than $100k owing on the old house) and were lucky our place sold really quickly as even though I did calculations of what it would cost to own both simultaneously it surprisingly cost more than my calculations so if the house sat for 6 months or more it would have been stressful.

[Monahammer]

Agreed with Silver. I have only sold a house i've owned to buy another once so far, but there was a lot of stress involved in ensuring financing was in place with the buyers of our former home in time for our financing for the new home. Our home was on the market for ~5 months. If we'd done the other way we would have paid through the nose for additional financing fees as we waited for our other house to close... and I would have lost all my hair waiting for the right buyers in that time.

The market was really cold then, but it was stressful enough trying to sell without having to think about 2 mortgages. Although moving twice is a pain, the shorterm rental option as you find your forever home would no doubt be preferable in my opinion.

[I-Hate-Hulse]

Originally Posted by Vinny01

I am interested in what approach people take for moving from a home you own to purchasing a new home.

Are others taking the other approach of selling your place first then getting out in the market to purchase?

It comes down to you doing some serious budgeting and forecasting taking into account some worst case scenarios.

Some years back we bought a new detached house 1st, and then needed to sell our townhouse. Plan A was of course to sell the townhouse, easy peasy. Plan B was if we were unable to sell the townhouse, what would that look like. I modelled out Plan B assuming we couldn't sell for 3, 6, 12, and 24 months. Or if I lost my job. Those type of situations.....

Thank god I did, because my my two other neighbors were dicks. To make a long story short - I was unable to sell and had to put Plan B into effect or else eat a 20% price reduction. Luckily my Plan B gave me enough time to find a trusted renter (in law) to live in that gave me 2 years for me to sell at the price I wanted. While stressful, knowing exactly where I stood financially gave enough comfort so as to not be in a puddle of anxiety....

Ultimately you need to look at the 'time' you have under Plan B vs taking a haircut on your property to move it and think about whether that's a risk you can live with.

[DigitalCarpenter]

Originally Posted by Vinny01

All this bubble talk really feels like a BC and Souther Ontario problem. Sure it is a little hot in Calgary but as I mentioned early in this thread that I sold my place 3.5 weeks ago for $83k less than we paid in 2014 (which I think was among the peak times ever in Calgary).

Looking at the available homes in my neighborhood you are getting a fully developed basement with the brand new infills for the same price we paid for our undeveloped basement and not a complete appliance package which we had to take to get this place 7 years ago.

The house we ended up purchasing for 400k less than the selling price in 2008

This article from a couple weeks ago discussed how Calgary is a lower risk market relative to the others in Canada.

https://dailyhive.com/calgary/calgar...arket-low-risk

We did exactly this. Bought our new home then sat on our old one for a couple of months to get it ready to sell which was way easier once it was empty.

We didn't get any offers anywhere close to what we wanted so we rented it out to cover the carrying costs. We found some amazing tenants that took better care of the place than we did. We were super fortunate to luck into good tenants but we earned probably 20% more selling the property later than if we were forced to fire sale the place. Our new place was only 10 minutes away from the old one so that helped with that decision. If you have to go across town to do minor repairs for your renters that would be a pain.

[edslunch]

Originally Posted by Rutuu

Interesting. Are build costs around $200 - $300 sqft? That puts land prices at ~$40 per sqft in that area ($430/sqm). I've got inner city just north of downtown and the river at $150 per sq ft for land (~$1615/sqm on the high side). An extra $100k in a place like Panorama moves land price up $20/sqft on a 50ft x 100ft lot, or moves your rebuild costs up $50/sqft. In the inner city its more weighted towards land to go that much higher.

A dangerous game to up weight construction costs.

I’m curious about land value vs house value. We have a renovated bungalow in Altadore, nicely renovated but still a 1600 sq ft bungalow on an R1 lot which is out of step with what is being built in the neighborhood.Seeing the continuous tear downs and builds going on in the neighborhood and the high price of some of these new single family homes, are we more likely to sell the house just for land value or do we get value for the house that’s on it?

[Vinny01]

We definitely needed to sell our place to secure the move to the new place. We did negotiate 90 day possession and had the bridge financing situation taken care of which we thought would give us enough time.

There was no interest from either myself or my wife to have to deal with showings and being in and out of the house for more than 2-3 weeks so we had a plan of reducing the list price fairly quickly if a deal didn’t get done ASAP. I feel extremely fortunate to have things go the way they did and we ended up getting more than we thought we would but still took it on the chin compared to the purchase in 2014. The new house is the forever home so if all goes as planned we live in this house for the life of the mortgage and beyond.

[timun]

Originally Posted by edslunch

I’m curious about land value vs house value. We have a renovated bungalow in Altadore, nicely renovated but still a 1600 sq ft bungalow on an R1 lot which is out of step with what is being built in the neighborhood.Seeing the continuous tear downs and builds going on in the neighborhood and the high price of some of these new single family homes, are we more likely to sell the house just for land value or do we get value for the house that’s on it?

In Altadore? In my experience your house is essentially worthless. It's all land value. You have to find someone who reeeeeally likes your house to pay any kind of a premium on it; otherwise most potential buyers in that area are developers who plan to tear your house down and replace it with something much larger in the $1.2-2.3M range. If anything it would be worth more as a bare lot.

[topfiverecords]

Originally Posted by edslunch

I’m curious about land value vs house value. We have a renovated bungalow in Altadore, nicely renovated but still a 1600 sq ft bungalow on an R1 lot which is out of step with what is being built in the neighborhood.Seeing the continuous tear downs and builds going on in the neighborhood and the high price of some of these new single family homes, are we more likely to sell the house just for land value or do we get value for the house that’s on it?

Fifty foot lot? There's probably a difficult line straddling there. Anything fifty feet and bungalow without an exceptional house is probably getting subdivided and redeveloped as semi-detached. You'd probably find you'd get lots of offers for what developers are paying for land only type situations. At 1600 and well renovated, you're possibly able to find buyers that would pay a premium and live in the house but you'd have to look at comparables. If you listed today, you'd probably be sold by the weekend. Just went to a showing that had 4 back to back over an hour and offers already.

[Lubicon]

Originally Posted by Ferarri

Sorry if this has been asked already, but wasn't there a real estate forum here before? I was wanting to get people's opinions on the new University District community.

I think it was Bigtime who posted he was in the area recently so swung through this district and was surprised by the almost complete lack of cycle infrastructure that has been incorporated into the community. Given it's location that does seem like rather poor planning if true.

Originally Posted by InglewoodFan

Had no idea how hot the market was. Have a friend who listed Thursday, had basically a full price offer on the second showing on Friday. Conditions cleared last night. Done.

And they had to fight their realtor to set the price as high as they did.

The market sure has changed in 8 months. Our neighbors moved last summer and their house sat for months and months before it sold, after dropping the price several times. I can count the number of showings we saw on two hands.

[Fuzz]

Originally Posted by timun

In Altadore? In my experience your house is essentially worthless. It's all land value. You have to find someone who reeeeeally likes your house to pay any kind of a premium on it; otherwise most potential buyers in that area are developers who plan to tear your house down and replace it with something much larger in the $1.2-2.3M range. If anything it would be worth more as a bare lot.

Ya, there is a bare lot near me listed for about $35k more than a slightly smaller lot with a decent house just near it. I figure demo costs play into it. Still, seeing a perfectly livable house listed cheaper than an empty lot is weird. Of course, those are listing prices, not sale.

[Table 5]

Originally Posted by edslunch

I’m curious about land value vs house value. We have a renovated bungalow in Altadore, nicely renovated but still a 1600 sq ft bungalow on an R1 lot which is out of step with what is being built in the neighborhood.Seeing the continuous tear downs and builds going on in the neighborhood and the high price of some of these new single family homes, are we more likely to sell the house just for land value or do we get value for the house that’s on it?

I find that these types of places are caught in a bit of no-mans land. They are too nice to tear down, but too small for most new buyers to live in as-is.

I imagine your property would be looked at both as a teardown and as-is, depending on the buyer. Considering the neighborhood and that it has a lot of families incoming, I imagine that most would be looking at it for land value (and these people avoid paying for renovations they'll get rid of). But I'm sure for some it's perfect as is...but this group is probably smaller so you have to be ok with waiting for them to show up.

[timun]

Originally Posted by topfiverecords

Fifty foot lot? There's probably a difficult line straddling there. Anything fifty feet and bungalow without an exceptional house is probably getting subdivided and redeveloped as semi-detached.

Not if it's zoned R-C1 it ain't.

Most of Altadore is RC-2, but some—mostly 14A, 15th and 15A Street—are still R-C1.

Any RC-2 lot less than 50 ft wide is worth much less than a 50-footer, as the minimum parcel widths for semi-detached in R-C2 is 25 ft. My grandparents lived in Altadore and their old house was on a 49 ft lot, which meant the developer who eventually bought it had to buy the adjacent lot as well and split it into three lots @ ~33 ft instead of two semi-detached @ 25 ft apiece, hahahaha.

[timun]

Originally Posted by Fuzz

Ya, there is a bare lot near me listed for about $35k more than a slightly smaller lot with a decent house just near it. I figure demo costs play into it.

Yup!

[Fighting Banana Slug]

Originally Posted by edslunch

I’m curious about land value vs house value. We have a renovated bungalow in Altadore, nicely renovated but still a 1600 sq ft bungalow on an R1 lot which is out of step with what is being built in the neighborhood.Seeing the continuous tear downs and builds going on in the neighborhood and the high price of some of these new single family homes, are we more likely to sell the house just for land value or do we get value for the house that’s on it?

I am in a very similar situation with a smaller reno'd bungalow (1200sq ft) Edit: R-2. It is rented now, but the return isn't really that good for the amount of capital I am (hopefully) sitting on.

I was hoping that perhaps it would be the best of both worlds, where both developers and families would be interested, but I do fear the value of the house may be very little, even though it is very nice.

I was thinking of canvassing a few builders to see how they value it, but I expect to hear a response of they will pay "market value", which is meaningless. Similarly, I am afraid if I retain a realtor, they may end up overestimating in order to obtain my business.

My real hope is that fancy-pants Peter12 would have a look and see it as a steal compared to the crappy 2 bedroom condos in Vancouver...