Calgary Real Estate predictions?

[Rhettzky]

Originally Posted by Claeren

With a condo purchase you get ALL of:
Smart Car
Mountain Bike
Home Entertainment System (?)
Interior Designer for a day
Maid Service for a year
Natural Gas BBQ
Murphy Bed
Ticketmaster & Hotel Arts Entertainment Package (?)
1 year Talisman Centre Membership

I love the small print.

Just so there's no confusion... The Green Machines, The Orange Overload, and The Purple Pleasures are all included with new condo purchases. Alternatively, a credit of equal value may be applied to your condo purchase.

Wow, so I can take all of that crap or maybe just pay the "discounted" price and do what I want with my money instead? What a novel idea!

[Cowboy89]

Originally Posted by Top Shelf

Hard to believe that he didn't mention sales are down 34.89% from Feb 2007.

Oh and he forgot to mention the 148.41% increase in inventory over last year too...

I've said it all along, it will be an interesting spring

Yeah, the devil's in the details. Just wait until a bunch of condo projects around town finsh construction in the next couple of years. Then you'll start to see weakness in the market. I wouldn't want to be someone getting into the condo market right now. How many of those going up were bought on spec by people looking to make money off of it as opposed to a place to live? Even if they are people who plan on moving in they're vacating a place that will end up for sale or for rent. The more rental units available the lower you can charge for rent and thus the lower it's worth to a potential buyer.

As for anecdotal evidence, the townhome complex I'm in right now in the burbs is half empty either with people currently selling their place or with people who bought recently and can't find tenants at the price they need to charge for rent to turn out positive cash flow. Either all potential buyers came by while I was sunning in a plastic children's mini-pool while eating a hot dog in the back yard, or the numbers don't add up.

[Claeren]

Originally Posted by Cowboy89

positive cash flow

This is a Calgarian-heavy forum, you might have to explain the concept of positive cash flow!

[Winsor_Pilates]

I think The Calgary condo marker will do great, and many "speculators" are in for big investments payouts.
If you bought in the last 2-3 years, you're sitting pretty IMO.

The freebee giveaways are funny. Maybe Battistella should try making a nice product instead. Everything about that developer seems like a gimick.

[MelBridgeman]

after 2010 get out! get out!

[flamey_mcflame]

An abundance of houses and a glut of condos coming our way. And people are paying over 300,000 for one bedroom condos. Of course, the real estate board tries to mask the fact that the last quarter saw a 11% drop in residential values. You need to be very picky about what you buy now. And it boils down to the adage of location. The amount of money people are spending in the farthest reaches of the four quadrants is not using brilliant foresight. Here's the scariest food for thought. In 20 years, when all the boomers hit their 70's and 80's, there is gonna be a fire sale on 2000-3000 sq feet houses. More exciting news from Bear-Stearns today. JP Morgan Chase just bought them out for $2 per stock. Down from only $175 last year.Addin 30 billion dollars from the fed in discounted loans to help the sale. This being the fifth largest investment bank in the US. The US fed is gonna drop rates another point. They are running out of interest points to give out. People's debt to asset ratio is gonna catch up to us soon too. Alberta does not live in a vacuum.

[Winsor_Pilates]

New article in the Herald today. No bubble burst according to this source, and I agree.

Calgary Herald Article

[MacDougalbry]

Inventory continues to grow, but prices seem to be holding steady (although the median price seems to have softened very recently.) I think what is going to put pressure on prices over the next few years is builder overcapacity. In the current market, a builder could probably shave $100K off of the price of a $450K home and still break even. I have no clue what prices are going to do over the next year, but 5 years out from now I'd venture that prices will pretty much be where they are today.

[Tron_fdc]

Talked to a buddy of mine that frames out in Copperfield, and he says he's getting busier. Mentioned that a lot of the spec homes in his area have been sold, and even though his builder isn't going to put up as many specs as they did last year, he's got enough work booked for the next 3 or 4 months. 3 months ago he wasn't sure if he would have a job.

I know it's not exactly scientific evidence, but I've used him as a gauge in the past and how busy he is usually indicates how busy the market is.

I also have a house for sale for 20% less than what it was listed for last year, and so far the only offer on it was 10% below my list, which I wouldn't move down on and they wouldn't move up. I can still rent it to cover my cost, so I'm not going to lose 20 grand because I'm such a nice guy.

It's definitely a buyers market and a renters market right now though. Of course, I'm hoping it switches but guys like me with more than one house have been riding the gravy train for so long it was bound to switch. Hard to say how long it will take though.

[AFireInside]

I'm on a mlx email list from my realtor which sends listings whenever it fits our criteria. The past couple weeks 70-90% have been price reductions. Just yesterday I had 15 properties e-mailed to me, 13 of those were price reductions. I've decided to hold off and get a nice down payment, because worst case scenario I think prices stabalize and you will see little increase each year so it makes more sense to save at least for me. Best case scenario for me at least is that prices come down which I think will be the case is much of Canada. Alberta will be affected less because it is better insulated with the oil industry but any decrease is good for me.

Seriously many people who got 40 year mortgages with little to no down payment may get into some tight situations coming up. Subprimes hurt the U.S. and 40 year mortgages are much different from subprime mortgages in the U.S. People just getting houses that in reality were out of their range.

It will be interesting to see this is the time of year when prices increase so it should be an interesting summer.

[SeeGeeWhy]

Migration in and low unemployment (propped up by high oil and gas prices) will continue to protect the incrase in values.. the question is how long does it stay around?

The market is definitely stabilizing and it seems like a lot of the people that were turned into real estate investors in the last few years have stopped to take a breath.

[SeeGeeWhy]

New Housing Price Index
January 2008


The cost of new housing accelerated for the second month in a row in January, the result of a strengthening housing market in the Atlantic and Prairie provinces.

Nationally, contractors' selling prices rose 6.5% between January 2007 and January 2008, a faster pace than the year-over-year increase of 6.2% in December. These back-to-back increases followed 16 months in which the gains in new housing prices had been decelerating.

On a monthly basis, prices rose 0.6% between December and January, resulting in a New Housing Price Index of 157.6 (1997=100).

Regionally, prices again rose at the fastest pace in Saskatoon, which led the nation with an annual price increase of 51.7%. On a month-over-month basis, housing prices rose 4.5% between December and January. This increase was due to a number of factors, including increased costs for material and labour, as well as strong market conditions and increased demand for land.

In Regina, the year-over-year increase was 25.9%, unchanged from December. Prices were also unchanged in January from December 2007.

In Calgary, prices rose 5.6% between January 2007 and January 2008, slightly slower than the 6.0% year-over-year increase the month before. On a monthly basis, new housing prices in Calgary were up 0.3%. Some builders reported increased costs for material and labour, although these were moderated by other builders who reduced their prices to stimulate sales. Some developers increased their lot prices to be more in line with current market conditions.

In Edmonton, the year-over-year increase was 19.0%, while prices fell 0.5% from December 2007 due to slower market conditions.

In the Atlantic region, buyers in Halifax saw prices rise 11.4% from January 2007. This was due to higher costs for materials and labour, increased demand and higher lot prices.

Homebuyers in St. John's saw a 9.1% gain on a 12-month basis. The principal factors were higher material and labour costs.

On the West Coast, the 12-month increase for Vancouver was 6.5%, while in Victoria, the year-over-year increase in contractors' selling prices was 1.6%, unchanged from December.

Windsor recorded year-over-year deflation for the 16th month straight, with prices falling 0.9% from January 2007. Contractors' selling prices for January rose 0.2% from the previous month.

Elsewhere in Ontario, contractors' selling prices were 4.2% higher than in January 2007 in Toronto, and 2.0% higher in Ottawa-Gatineau.

In Montréal, the 12-month growth rate rose to 4.6%, while in Québec, prices increased 6.3%. Increases in both cities were due to a competitive market and higher material and labour costs.

Note: With the goal of continually improving the quality and accuracy of the New Housing Price Index, Statistics Canada has introduced new quality adjustment methods for the cities of Toronto and Vancouver beginning with the reference month of January 2008. These new methods will enhance the treatment of quality change of new houses by taking into account their characteristics and corresponding prices. Future applications of these methods will be extended to other cities where possible.

Available on CANSIM: table 327-0005.

Definitions, data sources and methods: survey number 2310.

The third quarter 2007 issue of Capital Expenditure Price Statistics (62-007-XWE, free) is now available from the Publications module of our website.

For more information, or to enquire about the concepts, methods or data quality of this release, contact our Client Services Section (613-951-9606; fax: 613-951-1539; prices-prix@statcan.ca), Prices Division.

[SeeGeeWhy]

nm - hard to post tables

[MacDougalbry]

Looks like the spring market is over; listings are surging and there is price pressure. YOY prices are down 1% vs. March 2007.

http://www.canada.com/calgaryherald/...b23e35&k=84687

[mmanzz]

Originally Posted by Red

Corrected your last sentence.

Vancouver is one of the most beautiful cities in the world. That's why people move there. Toronto is nice, has nice weather and has jobs, that's why people move there.
Cities like that attract more people, it has alway been like that. People in the long past chose these locations because of the water and weather. These big cities will always be attracting people. You may choose Calgary, but you represent the proverbial drop in the bucket.

Ok RED, give me a break! I'll give you Vancouver, but Toronto is one of the most polluted places in Canada, it has horrible climate(humid in the summer, cold and grey in the winter), the worst traffic jams in Canada and other then the film festival is a very uninteresting big city when compared to other cities of that population size! To call it a destination city is incredibly ignorant. You obviously have never lived there. While Calgary itself may not be a "destination city", Banff and the mountains are places that people come to from all over the world. Indeed, as a refuge who came to Calgary from Toronto in 1995 on a ski trip and decided to stay, there is simply no comparison on a quality of life scale.

And on top of that, as an original Montrealer who is now a big Flames Fan, The Toronto Maple Leafs suck!!!

[Claeren]

With the current numbers and the current units under construction, especially multi-family, Calgary could have a multi-year supply of empty condos on the market within 12 months with a similar picture for single family homes (where construction can be slowed more easily than multi-family).

Crazy.


I have heard Edmonton is in even worse shape though, with thousands of conversion projects expected to hit the market.

There is ALWAYS a cycle in real estate. ALWAYS.

Good run-down of the numbers here: http://crebb.wordpress.com/
Although if you inputed these updated Herald numbers his stats for this year trend even worse then they show now on his site.



Claeren.

[Claeren]

Originally Posted by fotze

Looking at all these numbers I sure wish I was one of those guys who didn't own a house right now, they are set.

Pretty funny, and i know what you are getting at, but in all seriousness there are a LOT of people who have purchased in the last year that will/could be severely upside down in their home mortgages within the next year and i am pretty sure they wish they had rented for just another 12 months.

And i am sure your comment would have seemed pretty funny when directed towards an American naysayer a few short months ago, and now there are hundreds of thousands who wish they had never purchased their homes.

Within a year, with many of my 'smart friends' having purchased homes in the last year at the height of the boom, virtually every severely (well any unsupported debt is severe IMO) indebted person i know will be a home owner, and be so indebted relative to assets due solely to that home.


It is pretty easy to overlook the bad situation the generation just behind you endured during this boom (screwed if you do buy, screwed if you don't - was still a kid pre-boom) when you were lucky enough to have been born a few years early and thus able to purchase a home just before the boom. Obviously you are better off no matter what the market does.





Claeren.

[Burninator]

Claeren I know you had mentioned earlier that you were hoping to snag a downtown condo from an owner who was desperate to sell. And from the sounds of things such a situation could arise. Even developers could start cutting their prices (instead of offering these lame incentives and loans). What sort of time line are you expecting? I ask because I am also hoping to buy a condo (preferable inner city) near the end of this year or early 2009 (or whenever the market is prime to do so). Also where do you guys follow all of this? I get most of my news here.

[moon]

Originally Posted by Claeren

Pretty funny, and i know what you are getting at, but in all seriousness there are a LOT of people who have purchased in the last year that will/could be severely upside down in their home mortgages within the next year and i am pretty sure they wish they had rented for just another 12 months.

And i am sure your comment would have seemed pretty funny when directed towards an American naysayer a few short months ago, and now there are hundreds of thousands who wish they had never purchased their homes.

Within a year, with many of my 'smart friends' having purchased homes in the last year at the height of the boom, virtually every severely (well any unsupported debt is severe IMO) indebted person i know will be a home owner, and be so indebted relative to assets due solely to that home.

It is pretty easy to overlook the bad situation the generation just behind you endured during this boom (screwed if you do buy, screwed if you don't - was still a kid pre-boom) when you were lucky enough to have been born a few years early and thus able to purchase a home just before the boom. Obviously you are better off no matter what the market does.

Claeren.

I am confused. Your "smart" friends bought homes they couldn't afford long term and now may be in "severe debt", which is a very menacing sounding term I hope I never face severe debt, and you are blaming this on the housing market? And saying they should have rented for another 12 months?

Maybe I have been given different financial advise than others but from the successful people that I know, owning is always preferable to renting in the long term and buying a house that you can't afford long term isn't a good idea anytime whether in a boom, bust or in between.

[Claeren]

Originally Posted by moon

I am confused. Your "smart" friends bought homes they couldn't afford long term and now may be in "severe debt", which is a very menacing sounding term I hope I never face severe debt, and you are blaming this on the housing market? And saying they should have rented for another 12 months?

Maybe I have been given different financial advise than others but from the successful people that I know, owning is always preferable to renting in the long term and buying a house that you can't afford long term isn't a good idea anytime whether in a boom, bust or in between.

"Long term" is not a very specific term, but if this market tops out the way it is looking to be topping it out and you were one of those buying at the top of the market last summer, then the 'long term' necessary to have been better buying than renting is VERY long term.

Outside of purchasing at the top of the bubble, i do agree though, it is generally better to buy then rent. The problem of course is that we have just gone through a major bubble in pricing so...


As for "affording" what they purchased. Yes, by stretching young professional-type power-couple friends were able to buy their suburban dream homes. Of course they were willing to stretch because they hoped or were told that the price appreciation would take the long term pressure off and make it all worth while - and that inversely, if they didn't stretch now they would be priced out of the market 'FOREVER'. When that $440,000 starter home or $310,000 560sq-ft condo drops even a few precent in value, all the sudden they are stretching for nothing. Even this coming year, where prices should stay flat, that means a ~4%+ drop relative to inflation.

If you purchased in Calgary at the height of the 1980 bubble how long until you broke even on your 'home investment'? 15 years? more?



Claeren.