Where is Calgary Real Estate Headed Now?

[UTCVenturesLtd]

Soft rental market.
Migration to the east. My wife`s salon business has seen many clients moving east. (She now has 3 levels of pricing which has increased her business in spite of the downturn.)
Businesses folding or closing when the lease is up.
Many losing jobs and houses having taken on too much debt and their home values having declined. Crisis line volume jumps dramatically in the city.
Have a commercial realtor contact that normally would make around $200k a yr is not even at $20k this year!
Will the property prices keep gently sliding without crashing?
Recently told now the worst is yet to come in 2012 for Calgary real estate. We have yet to go through it.


On the flip side, yes, HELOC rates are awesome and with the decline in prices, properties look more attractive and if you find the right seller wanting out at almost any cost... hmmmm... tempting!
Traffic in the city is still just as crazy. Fuel prices have eased up as well taking some of the bite out of the personal budget as well.
We are gaining on the U.S. dollar as fuel prices are going down!? That is different!
Has the USA real estate hit the bottom of their slide yet? Just knowing that their prices are firming up should give Canadians some kind of confidence boost that things are okay out there.


The wise investor makes money in up or down markets. Are there any good strategies out there for the current conditions?

In the long term outlook, this really would be a super buying opportunity. When the next upcycle happens, you would want to have as many properties in your portfolio as you can muster. Strategy would be to snag renters to keep your properties happily rented out so that you can move forward rapidly.

 

[Thomas Beyer]

a 5-6 year peak to peak trough .. from 2007 to 2012/2013 .. we're bottomed out in Calgary .. but may scrape along the bottom for a year or so .. so time to buy with a sharp pencil is NOW !



Moving east ? to SK perhaps ! or to NL / NS ?



Calgary 50 Year house price view: http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-6621-50_Year_Calgary_House_Price_View.html





Equity Gain not the only way to make money in RE: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-10711-Equity_is_not_the_only_way_to_make_money_in_real_estate.html

 

[JimWhitelaw]

Some brief highlights from the last REIN meeting in Edmonton:

- AB net in-migration +7000 ppl in Q109.
- AB employment earnings highest in Canada
- At least one more wave of mtg defaults in USA in 2010/2011
- Continued devaluation of $USD likely due to US Fed inflationary policy

 

[RedlineBrett]

The ratio between supply and demand will determine price.

The higher the supply (listings) and the lower the demand (sales) the lower the price will be. The lowest price will occur at the greatest difference between the two. I have long believed that those that were buying during the dead of winter (December and January) were getting the best deals. This is supported by the sales statistics for the period (see below)

Total MLS December 2008 listings/sales = 10.99
Total Condo December 2008 listings/sales = 8.5:1
Total single family = 8.6:1

June 2009 = 3:1 or a balanced market. A balanced market is defined as any ratio between 2.5 and 4 to 1. The average sales price is a shade over $400,000.

Total Calgary Stats June 2009

Calgary Single Family Stats - June 2009

Calgary Condo Stats - June 2009

I am no Don Campbell so I will leave the macro economic theory to him however I do have a unique vantage point of being right in the trenches doing deals in this market. The "market has come down" line of thinking is very old news. Buyers and sellers know this and are acting accordingly. There are a lot of people that want to trade up or get into the market that have been looking for signs of stability as no one likes the thought of their asset depreciating right after they buy. But people have lives to live and can`t wait forever and hence we are now seeing some movement.

So what does this mean for a buyer going forward? Well no one has a crystal ball but I will give my thoughts.

1. We WILL NOT see another `boom` until the average price starts to flirt with the all -time high observed in July 2007 of 447,000. Most sellers are traditional homeowners and their house is their biggest investment and as such they need to exit at close to break even in order to do a deal. Once we are there I think we will see more sales and more development from builders and who knows where we will go at that point. Maybe then is when we will see this second drop people are talking about.

2. This notion of there being an endless amount of people looking to give away their property doesn`t exist anymore. I don`t think it really ever did in Calgary.

3. There are precious few motivated sellers of quality cash-flowing real estate at prices that make sense. REIN is the biggest real estate network in Canada. Don`t you think that if there were lots of sellers willing to give you their shirt we would have seen more adds in the classifieds? You can still get a great deal on a 2200 ft^2 house 25 mins from downtown but there are very very few (like I can count on one hand) nice places around the $350k mark that make sense for a REIN buyer.

So the window is closing... Soon we will be in a market where rates have come up and cash flow is too tight and properties are too few and too expensive but appreciation isn`t a lock short term... Definitely not something my business is looking forward to! Maybe rents will come up then to widen the spread but who knows!