Housing Market

[Kor]

Re: Housing Market

If residential real estate in Calgary crashes, I will pretty much have to move to a non-extradition country.

[Canadian Turbo]

Re: Housing Market

Well the article is a good read it very much points out reasons why this will not be the same north of the border. Firstly banks/lenders in the US are not subject to controls as we are up here and thus they have 30 year mortgages, interest only payment mortgages and many many mortgages with no down payments given to people with less than great credit. Therefore you have a number of people with zero or negative equity in their homes with falling prices. From my mortgage experiences it is not easy to get a mortgage here and even harder to get one with no equity so I don't think even if prices were to fall that people here would be in those situations.

I think you also have to begin seperating markets by geography as factors are getting so complicated you cannot lump a whole country together as some cities may slump but not others. Calgary although booming is still behind many large cities when you have places like San Fran where average prices are over $700K that is when you will have a lot more trouble. Our city is still trying to catch up from our most recent boom and housing is still very tight so I am of the belief that things will cool and slow but not really decline, we shall return to a more normal market and pace of growth.

[Khyron]

Re: Housing Market

Economies are linked, so while we won't suffer the brunt, we may suffer some aftershocks. US interest rates going up will still affect ours, and we have a LOT of owners that would be pushed over the edge with a 2% hike, let alone rates hitting 9-10%. And while we don't have the retarded ARMs that the US allows, RBC is starting 30 year mortgages and we've already got people paying 3000/month+ for their mortgage payment.

The problem I personally see with our housing is that we have virtually unlimited growth direction, and every mile in diameter we expand out, we increase the available area to build on exponentially. Contrary to places like Van or SF that have limited growth direction due to water. A huge part of our increase has been labour/materials, but an economic slowdown will drop those prices like stones (ha, pun!). If you can build a new Jayman house for 175 again (material/labour prices 2 years ago) then just the land increase is the concern. Even keeping the value of the lot doubled from what it was 2 years ago would make the whole house still under 300K. And so a house exactly like mine, 1km farther away for 275 means mine can never sell for 525. The new house prices determine the old prices with adjustments for proximity to DT, crime, schools etc. But ultimately land in Calgary is dirt cheap, and housing must reflect that. And that doesn't even take into account what will happen when all the older investors who moved their mutual funds into real estate funds start pulling out because their no longer making 30% a year return, or they want capital.

Now this is just my novice opinion as opposed to something I read, and if someone can point out any reasoning flaws feel free.

Khyron

[Canadian Turbo]

Re: Housing Market

There are reports that using internet data home sales could actually be going back up for the US as buyers may have come out of the woodwork to pick up better deals now, I guess we will see

[Tuna]

Re: Housing Market

I just want my current house to keep going up until my new house is done, After that I don't care as i'm planning to stay there for a good long while. I've seen it slow down lately but that really could just be the summer. I wouldn't be surprised if it starts to pick up again in the fall. I don't think it will go crazy like the spring we just had but like Blair said, I think we are still behind a lot of cities with a lower per capita income than we have here in Calgary.