Why is the market going crazy?

[corporatejay]

Originally Posted by calgarygeologist

Of the folks that I was referring to most of them actually bought for the sole purpose of investing and renting it out. They were not carry over homes. But, as was mentioned above my group of friends and acquaintances probably isn`t very representative.

I know very few of my peers who own two properties and I assure you we all have what would be considered "above average" jobs.

[Badgers Nose]

Conditionally sold my house in less than 24 hours on the market. Wow

If the conditions clear, I'll wonder if I left money on the table. But that asset returned 2.5x what I paid for it so no point in getting greedy.

[ken0042]

Originally Posted by Badgers Nose

I'll wonder if I left money on the table.

Just don't look at other list prices for comparison. In my neighbourhood there are a lot of houses that are sitting there for months on end- way over priced. So just because somebody is asking $450K, doesn't mean they will get it.

And in fact it could be all those overpriced houses that helped yours sell. If you had yours priced correctly, the buyer may have seen that and jumped on it. Although there may be 20 houses in your area for sale, it could only be a few of them that are priced correctly.

[terminator]

Originally Posted by Badgers Nose

Conditionally sold my house in less than 24 hours on the market. Wow

If the conditions clear, I'll wonder if I left money on the table. But that asset returned 2.5x what I paid for it so no point in getting greedy.

If this was your primary residence then there is a point in getting greedy. It did not return 2.5x what you paid simply because your next house should have seen a relativley similar appreciation. In a market where prices are going up or down one does not generally make or lose money on their primary property.

[Flamenspiel]

^^not always though, if the property was significantly improved(sweat equity)beyond the land appreciation then that would allow profits above and beyond whatever price increase incurred in the step up property.

[terminator]

Originally Posted by Flamenspiel

^^not always though, if the property was significantly improved(sweat equity)beyond the land appreciation then that would allow profits above and beyond whatever price increase incurred in the step up property.

However, youd imagine that person would move to a property with equal or better finishings?

[darklord700]

Just sold my condo losing a few grand plus commission but I couldn’t be more ecstatic.

At the height of 2006, I bought a pre-sell condo sight unseen and learned the hard lesson - when you buy pre-sell you have few rights and are at the mercy of the builder. The square footage shrank 5% but the absolutely worse part was that my ground floor unit was a below grade unit. The bottoms of the windows were inches above grade but the floor was 2-3 feet below grade with a balcony, if you can call it that, facing out to a retaining wall. The unit was very dark and some buyers commented that it was like living in a jail cell.

4 adjacent units all bought by investors all suffered from the same deficiencies and we’d all tried to unload the units unsuccessfully from day 1 since 2008. One time these 4 adjacent ground floor units were on the MLS at the same time that even my agent thought it was hilarious. Some of us investors thought these units were unsellable at anything close to their market value.

I rented out the unit from 2008 (I was a great landlord despite my handle) as I couldn’t sell it by asking for even $25K below my costs. This year, I listed it again and after 3 months and 100 showings, I finally got an offer at $5K below costs and with commission, I am down by about $17K. But with the net positive rental cash flow for the last 6 years, I am actually up a few grand overall.

The scary part is that all these 4 unsellable adjacent units that had been listed for umpteenth times and failed to sell since 2008, all got sold within the last 6 months of this year. Some even got their 2006 pre-sell price back (minus commission) but most lost about $5K or so plus commission. If this is not proof that the market’s gone crazy I don’t know what is.

Thank God I finally got rid of this albatross of an investment without losing my shirt. Even with the cheque from my lawyer in hand, I still couldn’t believe I managed to sell my unit. No more pre-sell condos and no more chasing the market at the height for me anymore.

[ExiledFlamesFan]

Very interesting DL. I'll be in the market to buy when I move back to AB in 6 months or so. The other options would be to rent or move back in with my parents for a few months. I figure renting is out of the picture with the outrageous rental market in Calgary right now.

My best option is to probably move back in with the parents and be patient while I look around and wait for something I like and try to get somewhat of a "deal".

[darklord700]

Originally Posted by ExiledFlamesFan

I'll be in the market to buy when I move back to AB in 6 months or so.

Looks like you are aiming for a condo and from what I learned, you should definitely go for the downtown luxury concrete condos.

Back in 2006, I put down deposit on the Arriva and my suburb lowrise condo at the same time. But I went cheap and bought the suburb lowrise.

Looking back, I would have made out better even with Arriva's developer went bankrupt.

Concrete buildings are better constructed and builders can't cut too many corners on a highrise. Also, concrete buildings tend not to have moisture problems.

But the biggest reason I would go for downtown highrise is that the suburb lowrise buyers don't want to buy apartments. They only buy them because they can't afford a house.

The downtown highrise buyers actually don't want a house. Single houses are not in competition for downtown highrise buyers. So downtown highrise will be easier to sell and probably will appreciate more.

[ExiledFlamesFan]

Originally Posted by darklord700

Looks like you are aiming for a condo and from what I learned, you should definitely go for the downtown luxury concrete condos.

Back in 2006, I put down deposit on the Arriva and my suburb lowrise condo at the same time. But I went cheap and bought the suburb lowrise.
.

At this point I'd say I'm priced out of the downtown high rise luxury condo market. My budget is probably around $300 000, might get a couple thousand in gifts from family but 315 000 would be pushing it.

I definitely agree with you about the suburb condo market, I have no interest in living out there. Looks like my best bet is buying in an older building close to the core. We'll see if the market is still on fire in 6-8 mos

[skudr248]

Question from a guy buying his first house soon...

Is the market going to turn anytime soon?
What time of year is best to buy? I've been looking since start of summer and how fast inventory is moving is astonishing, I like a house and it's gone by the end of the day.
I am looking to purchase in SE burbs btw (auburn bay/cranston area/walden/legacy) with a budget of around ~375-400K but everything seems to be over 400 for a newer built home. (Don't want to go condo route, want a detached house)
I haven't realtor'd up yet either, so I may be missing out on some opportunties?

Housing in this city is frustrating, then again I have no experience as I have always rented since I moved to Calgary few years ago.

[ken0042]

I would suggest talking to a few realtors and finding one you would want to work with. I still stand by my recommendation of Travis. The single biggest advantage is a realtor can set you up to receive automatic email when a property is listed, so you have more time to act.

I would say things normally slow down over the winter, so that could end up working in your favour. Also keep in mind with the high prices- how long has a place been on the market? I've seen houses priced way over market, and they have stayed on market for months.

[Clever_Iggy]

Originally Posted by skudr248

Question from a guy buying his first house soon...

Is the market going to turn anytime soon?
What time of year is best to buy? I've been looking since start of summer and how fast inventory is moving is astonishing, I like a house and it's gone by the end of the day.
I am looking to purchase in SE burbs btw (auburn bay/cranston area/walden/legacy) with a budget of around ~375-400K but everything seems to be over 400 for a newer built home. (Don't want to go condo route, want a detached house)
I haven't realtor'd up yet either, so I may be missing out on some opportunties?

Housing in this city is frustrating, then again I have no experience as I have always rented since I moved to Calgary few years ago.

My wife and I tried working without a realtor for awhile. As a buyer the advantages are fewer. What we ended up doing is working with one, excluding Comfree and 2% listings. We then pursued both traditional listings with our realtor and Comfree/2% without.

[lorenavedon]

Originally Posted by ken0042

I would suggest talking to a few realtors and finding one you would want to work with. I still stand by my recommendation of Travis. The single biggest advantage is a realtor can set you up to receive automatic email when a property is listed, so you have more time to act.

I would say things normally slow down over the winter, so that could end up working in your favour. Also keep in mind with the high prices- how long has a place been on the market? I've seen houses priced way over market, and they have stayed on market for months.

seen the same stuff since last year. What's annoying is that people won't adjust their price. It's a stupid price and nobody will buy it at that price yet they keep it there for months on end, even years. I wonder what realtor would waste their time on listings like that.

[ken0042]

I would say a lot of people may be testing the market. Doesn't bother me so much because a lot of these testers put their houses up right when I did, so mine seemed reasonable by comparison. Also puts my wife's mind at ease seeing how easy of a time we had selling.

I just don't think I could handle having my house showing ready for that long.

[lorenavedon]

Originally Posted by ken0042

I would say a lot of people may be testing the market. Doesn't bother me so much because a lot of these testers put their houses up right when I did, so mine seemed reasonable by comparison. Also puts my wife's mind at ease seeing how easy of a time we had selling.

I just don't think I could handle having my house showing ready for that long.

I'm convinced some people are thinking to themselves, "well, I really DON'T want to sell, but if I get a stupid amount, I'd definitely think about it!"
Which wastes my time when I go look at those listings and actually like a house but am not stupid enough to pay "greater fool bubble pricing". Hey buddy the last 3 places sold just 1 month ago for $500k. why would I pay you $600k for yours which is the exact same?? "Well sir, that was 1 whole month ago!! It's different now, way hotter!!".

[darklord700]

Originally Posted by lorenavedon

I'm convinced some people are thinking to themselves, "well, I really DON'T want to sell, but if I get a stupid amount, I'd definitely think about it!"

There's that and people don't have to sell in real estate. If they make contingency offer on their new house based on their house getting sold, the dream sellers have nothing to lose.

If you pull the sales history, the seller who bougth recently won't likely to reduce their prices as they were locked in at the higher prices. If the seller had stayed in the same house for 20 years, they would be more likely to reasonably price their house or bargaine.

[mrkajz44]

Agreed that the overpricing is pretty bad right now. The place that we ended up buying a few weeks ago was initally listed for $500K in June, but our realtor figured it was worth about $465K.

Finally, they drop the list price to $470K, so we jump on it and make an offer. Apparently there were not willing to negotiate on price as they had already dropped the price $30K. WTF? So you greatly overpriced your home and now that it is back in reasonable territory you use that as a bargining tactic?

Needless to say, we were not impressed. Ended up getting it at market though, but the logic behind some of these deals is just not there.

[lorenavedon]

it makes me laugh driving around this city. So sparse, so many empty lots, so much room in the inner city even. It's ridiculous given all these factors. It's nothing like Vancouver, Manhattan, Hong Kong, London etc. where you just have no more room to build. Just inner city, close to downtown there is massive amount of empty land and space that could house like another million people. It's stupid. Artificial shortage based on slow construction is the only problem here. There is enough land in the current city limits, given enough time, to build 10 homes for every single person in this city

[bizaro86]

Originally Posted by lorenavedon

it makes me laugh driving around this city. So sparse, so many empty lots, so much room in the inner city even. It's ridiculous given all these factors. It's nothing like Vancouver, Manhattan, Hong Kong, London etc. where you just have no more room to build. Just inner city, close to downtown there is massive amount of empty land and space that could house like another million people. It's stupid. Artificial shortage based on slow construction is the only problem here. There is enough land in the current city limits, given enough time, to build 10 homes for every single person in this city

That's true. On the other hand, most people need somewhere to live now, not at some ill defined point in the future.