Huh?
I guess it all depends who you ask… The Realtor's Assocation of Edmonton reported yesterday that home sales in Edmonton increased 20% over December and prices were up in all categories. The Edmonton Journal reported today that sales "took a 40% tumble" and that "every indicator faired worse" than last January. I guess it is all a matter of perspective!
Anyway, here are the numbers we couldn't report the other day (because they weren't out yet!):
Inventory is lower than last year, but higher than average:
With new listings much closer to normal levels this year than it has been for the past two years, and sales lower that average, it will be interested to see what happens with the inventory. We have noticed a lot of activity in lower priced homes, while there is not a huge supply of affordable single family homes. At the same time, we expect condo inventory to substantially increase as the year goes on and more new complexes are completed.
As you can see, supply (aka inventory) has a close relationship with the average sale price:
The new listings to sales ratio points to a continued buyer's market in Edmonton:
The average number of days on market is 68, the highest in at least 8 years (that's how far back my numbers go) and the absorption rate is at 9 (the highest I have as well). I expect the absorption rate to fall to a more normal range in February as the number of sales increases.
Lastly, I had a request for the price per square foot graph so here she is!
We're always open to new suggestions so if there is something you'd like to see let us know and we'll do our best to provide it (we can't post stats over time for each neighbourhood in the city but we can provide reports on specific neighbourhoods).
Home Sales Up 20% but Down 40%
Home sales are down 40% if you compare January 2008 to January 2009
Home sales are up 20% if you compare December 2008 to January 2009. Generally December is slowest month of the year in terms of sales due to holidays therefore comparing it to January is meaningless. Yet The Realtor’s Assocation of Edmonton uses this information to create false sense of reality. Go figure
Wow, sales are up over the worst month they’ve had in 15 years.
Grab the lawn chairs, it’s time to party!
Let me guess, according to the EREB it’s a “great time to buy” too?!?!
I’d be really interested to hear from them just when exactly isn’t a “great time to buy”…
For the first time I’m disappointed with this blog….there’s nothing puzzling about those figures. Sales are up over December 08 but down YOY from January 09. I’m disappointed because the ‘huh?’ seems like an attempt to spin, which is uncharacteristic of the writer.
There was no attempt to spin, I was just commenting on the extremely different ways you can report the same numbers. I apologize for setting the wrong tone. I suppose I should take that as a compliment though – that’s it’s only the first time I’ve disappointed! I think many people are disappointed with me way more often than that. Thanks for the comment wj.
What I find interesting is the hopefulness of a slightly rising average price despite falling price/sq.ft. figures. All we’re seeing there is as lower cost homes in the $200 to $400K range of the market sell, the percentage of higher priced homes REMAINING on the market could well be slowly increasing. This explains the “up tick” in average price that seems to defy the steadily decreasing $/sq.ft metric.
Price per square foot dropped at a rate of about -$8.33/sq.ft./month ($50 over 6 months) between May-07 and Oct-07 and steadily from Oct-07 at a rate of -$2.08/sq/ft/month ($25 over 12months) to present day, for a net fall of $75/Sq. foot from the peak of $315 to $240/sq/ft. at present.
According to THESE numbers, an “average” 1200 Sq. Foot E-town home cost you 1200 x $315 = $378K at the peak and 1200 x $240 = $288K, a drop of $90K or 31%.
“Average price” metrics will not show nearly as significant of a correction because of the constantly changing contents of the market.
Cheers,
E-town
I find it interesting, looking at the price/Sq foot chart that single family homes and condos lines come really close. I would guess that we are gonna see a sharp drop in condos next month. Either that or a sharp increase in SFH… but considering the trend I would choose the former.
Interesting observation… I agree!
Sent from my blackberry…sorry if I spelled something wrong!
Great post E-town. My wife and I have been looking at new SFH’s around 1200sq/f in Edmonton for the last few months and have seen prices drop from around 380k average when we moved here to the roughly 300k average that we see now. Seems to line up with your calculations.
Too bad average price doesn’t tell you anything about the quality of the home or where in the city it is or even what style of home it is. Statistics are open for interpretation at the best of times. Read into it what ever you want but time will tell what happens not statistics.
How hard would it be to include the standard deviation? Basic stats requires the mean and standard deviation to make meaningful interpretation of a large group of numbers. And it’ll help gauge whether a home will take towards the lower or upper end of the DOM to sell, or not at all.
How about a brief update on the high-end? With all the high-end homes going up in the new areas of Callahan Ravines, Ambleside, Windermere and Summerside, it would be interesting to see what the market is. Being a lifer in this City, homes above $700k were inconceivable just a few years ago but seems to be the “cheap” units in some neighborhoods.
“We have noticed a lot of activity in lower priced homes, while there is not a huge supply of affordable single family homes.”
What price range are you talking when you say “lower priced homes”? And “affordable single family homes”? What is a typical price range for first-time buyers?
Also,
Just curious how people are able to afford entering this market – especially with children? Is it saving for a long time for a substantial down payment? Very long ammortization periods? Just curious as I’m a first time buyer, but with children, finding it hard to find something suitable for our family at a price we can afford….
Thanks!
Just curious Holly, is there ever a good time to buy?
Sure, when prices are in line with affordability (3x median income or so) and supply and demand is somewhat balanced buying is a great idea.
So, when isn’t a good time to buy Sheldon?
If you’re breaking into the market now, having at least 10-15% down and a family income well over 100k is the only way I would consider it. If you and your wife don’t pull in at least 60k each, rent for awhile.
When your debt isn’t in order, Your income is doubt, or you’re not certain that you’re going to be living there for a decent period of time. In my experience and I’ve dealt with a lot of homeowners not once has anyone ever said to me that 3x median income. It doesn’t make you wrong or right, but everyone has their particular reasons for doing things and the income one is yours.
thank you Nate for that detailed response. so because we don’t fit in that mould (my wife is a stay at home mom), how will we ever buy and provide our family stability? that’s the problem, we’re worried if we don’t break into the market now, we’ll never be able to afford it….
I’m not talking about from a personal standpoint, I’m talking about from a market conditions standpoint.
Under what market conditions would you consider it a bad time to buy?
“if we don’t break into the market now, we’ll never be able to afford it”
Average house price in Edmonton is already down $74,158 (17.4%) from peak of May 2007. House prices are going down rougly $4000/month and will keep going down for at least a year. I’m confused why you would say if we don’t buy into the market now, we’ll never be able to afford.
http://www.canadian-housing-price-charts.235.ca/
It’s tough to say whether or not it’s a good time to buy. On the one hand, interest rates are dropping and house prices have softened. So relative to where things were a couple of years ago, it’s a good time to buy
HOWEVER!!!!
My personal belief is that home prices will fall substantially over the next few years. The US is on the brink of the next great depression.
The optimal time to buy will be when you can get a median-priced single family home for 500-700 oz of silver or 40-60 oz of gold.
Everything goes in waves and cycles… there are waves when stocks and real estate outperform gold/silver, And then there are phases when Gold/Silver outperform real estate. Right now, we’ve reached the end of the stock/real estate cycle and we’re beginning to see the rise of the cycle in gold/silver.
Look at what happened to precious metals prices in the late 70′s-early 80′s. Park your cash in precious metals and wait for real estate to bottom out.
I guess we were just not convinced that prices will go down much further. We have heard many opinions that we are close to the bottom of the market and of course, when things pick up again, we’ll be in an even worst position. It feels risky to wait, when I’m paying 2000/month on rent….
I appreciate everyone’s input, please keep it coming…
thanks.
“Close to the bottom”, there is not a day that goes by now when layoffs are not being announced. “Close to the bottom”, I would argue the worst is yet to come. They layoffs have just begun in Alberta. The impact of this has barely touched the Alberta housing market, the price declies so far have just been some of the air out of the bubble. Now economic factors are going to hit and hit hard.
My thoughts anyways.
Depends on the buyer. I guess you are missing that point. If there was a specific point in time then everyone would buy at that time and then it would cease to be good time.
Is it it a good time to buy stocks? Depends on who you talk to and what you buy. Same as real estate. From a buyers perspective the current market has some pluses. Motivated sellers, strong negotiating position, low interest rates and plenty of selection. What about people who can buy now and have payments lower than rent?
In any case buying a home should not be based on a single factor but should be based on personal circumstances and market conditions.
Sent from my iPhone
2000 a month? That’s insane!
You can rent full SFH’s all over the city for around $1500 a month.
You’re really blowing some cash there.
I was aware after your first attempt that you’re quite apt at tapdancing around the question… you’re a commission salesman after all, I’d expect no less.
What I’d like to see is you give a straight answer.
Charlie Ponde and the REA seems to have no trouble telling the world the time to buy in Edmonton is now based purely on the market conditions and knowing nothing about individual finances… so I don’t see why it should be so tough to tell us when it would be a bad time to buy. Unless of course, you don’t want to.
Tell me about it. At the time we started renting, price was what you’d expect. Additionally, it wasn’t easy finding a place that would accept 3 young children.
Maybe time to look for a cheaper rental instead of a new home…
We run a fairly large business involved directly in oil and gas in Edmonton. We’ve ramped up big time in the past couple of weeks. I’m hiring.
When we pick up, others usually do to.
Anybody’s guess as to what tomorrow will bring but from what I’m seeing, this will get better soon.
Maybe not everyone wants an “average” home.
The average price is so generic that it really doesn’t tell you anything.
Maybe most of the good properties that were for sale are sold at higher prices and all that is left is junk that would be priced lower, therefore average prices will drop.
If someone finds the “right” home and you can afford it, buy it.
If not, rent until you find what works for you. Common sense approach.
Wow Fred, I guess you should be storing up food and ammunition for the “new world” as you see it. Good luck with your B.S. prediction.
I guess we will recognize you on Whyte ave walking around with a ” the end is near” sign on you right?
Hi Ron: Hey, could you comment on what has changed in conventional O&G lately that has caused your biz to pick up? Everyone was all gloomy about low gas prices, and drilling companies heading to adjacent provinces to get gas there where well servicing costs were not quite 250% higher like here. Comments? Thoughts?
Cheers and congrats.
E-town
$2000/month on rent in Edmonton? I would suspect that it a fairly decent place at that price. I would look for a less expenisive rental so that you can save for a downpayment more quickly. Or… *gasp* owning may be an alternative if you are used to paying that much for rent. Just don’t rush it and low-ball. Consider ALL expenses that you are not used to paying when renting. If you are buying because you feel like you will be priced out, then forget it. Buy because you want to.
Advice is worth what you paid for it…
I guess what I have is the wisdom and experience that the real estate market is diverse. Its not surprising you’d try to diminsh my point of view by pointing out that “commission” aspect of my income. I only get paid when my clients have successfully achieved their desired results. I certainly don’t have entitlement syndrome.
You never answered me about the stock market. There is no blanket buy or sell? You can answer it from your perspective and yours only. From my perspective and my horizon its a buy for some stocks. Same goes for real estate for some people and for some properties.
However if you want a simple straight answer. It is a bad time to buy….when I’m getting advice from someone like you.
Firsttimehomebuyer – It sounds like you want to put a secure roof over your kids heads. When is a good time to buy? It is different for everyone but it sounds like the time is right for you – low interest rates, prices have fallen for the past year, you sound motivated AND you can afford $2k/month in rent! seems like a simple decision to me so long as you can keep your job. Forget about trying to time the market. No one does that by design, just luck. If they say otherwise discount everything else they say or have said. You are buying a home not an investmen?. It is nice to know the home you purchased is worth more than what you paid for it but it doesn’t have to appreciate over night.
Price per square foot and average price is all garbage. You have to look at individual areas of the city. How can you compare square footage or average price in neighorhoods like Norwood vs Glenora, or Beverly vs Sherwood Park or Millwoods vs St. Albert. The quality of living in all these areas is so diverse, they aren’t even comparable. Who wants a $250.000.00 house in a dangerous neighborhood…’cause that’s about the only place you’ll get one? It’s a joke…look at the neighborhood you’re moving into, that’s far more important than statistics on broad averages. Crime stats, and quality of life far outweigh any silly average house price. Move where you’ll feel safe and want to stay for a while. I can tell you in the neighborhood I live in the houses still sell quickly and they have lost little value. It’s all about location. Make a sound investment and purchase in an area that will maintain you house value…I have nothing more to say…it’s really a simple solution made complex by people trying to make numbers that will work across the board.
…and if you feel the sky is falling, buy a house with a bunker. Conversely, if you want to enjoy the sunny sky, regardless of all clouds people like to create, then buy a house with a sunroom and enjoy the recession over a nice glass of wine.
Well played Sheldon. Holly interest rates are very low, house prices have fallen for the past year. If you see something you like, you can afford it and you are motivated ie you want to own a home, why wouldn’t you buy. No one times the market by design, only luck. Take comfort in knowing you are not buying at the peak!
I am with you, Fred.
Despite low interest rates, why would we expect high consumer confidence as we are watching this recession unfold?
Especially single-income families should think hard before taking the risk to sink their savings into a house, right now. That money may come in handy in case of a job loss…..
Yes, it hurts to pay $2000 in rent, every month, but you can walk away from that place without a huge loss, if you suddenly have to survive on employment insurance. You wouldn’t want to lose your house and down payment when times get tough…
Common sense would indicate that buyers won’t pay higher prices in this climate of economic uncertainty. My bet is that there will be further drops.
If you are worried that we have hit rock bottom, do some homework. Select a few houses you might be interested in, and watch how fast they sell, and whether they reduce their price. That will give you some idea of what you are up against.
If you see them selling like hotcakes, then you are simply out of luck, if you don’t have your finances in order to make a move.
alot of owners are holding onto their properties in hoping for a second boom. They are right because there will be a second boom coming, it’s called the unemployment boom where people line up at the manpower office to collect their morgate payment.
Hi Sheldon/Sara,
Thre were a large number of townhouses in north edmonton area for <200k$ last month. Did these sell or become delisted?
Thanks!
Wow Jim, that was some impressive ad copy there sir. But you do need to take a stats course or just google the word “AVERAGE” because nobody is expecting ALL homes to be the average price. Crappy little stinky homes in gangland cost less than average, and larger nicer homes in good areas cost more than average. Everybody knows this, and nobody is saying otherwise. The thing is, when there is a housing bubble (like now) ALL homes are overvalued – just by different amounts. In fact, contrary to your claim, some of the more expensive homes in Edmonton stand to lose the largest PERCENTAGE of their value. This is party due to credit constriction lowering affordability – look at Sara’s graph real hard. Almost ALL of the 600 sales last month were in the $200 to $400K range. Guess you can’t get a $600K interest only zero-down HELOC working at McDonalds anymore! Jim – just NAME your area and I’ll tell you +/- 10K how much YOUR house has tanked in the last 20 months.
Jim’s Story (Alternate Ending):
…and enjoy the recession over a nice glass of wine… while you watch your downpayment dissolve into a puddle of negative equity when the REAL layoffs hit and the REAL price correction starts.
Hey, we’ve seen a 17% drop in avg price and a 31% drop in price/sq. foot in 20 months. Gee. If I was a realtor I’d be tying into the wine too!
Actually, Car27 you have it backwards. Eroded affordability has resulted in higher sales in the cheapest homes; Sara’s graph clearly shows that there has been an increasing concetration of sales in the $200-$400K range. It stands to reason this would result in an increasing percentage of $400K+ homes left on the market, thus, impacting average price… in a sort of counter-intuitive way!
I moved away from Edmonton two months ago as I was transferred by my employer to Ontario. Yes I have made good money with my Edmonton sale. I also knew that i was buying in the GTA where home prices are going down. In fact I lost $5000 so far… and I knew I would.
My point is that I did not want to rent and we all need a roof over our heads. Renting because you will shelter your wallet from a greater loss versus owning is somewhat complicated. In the end, you still have to move into that home, no?
For Holly: If you wanna rent, rent. Don’t be critical of folks who buy homes now. Maybe they can afford it, Holly. They can’t be bothered with when when not to buy.(:
What goes down must go back up…
“close to the bottom and prices won’t go down much further”
I don’t know where your getting that idea from, Alberta’s oil/gas industry has just started it’s swan dive and hasn’t even come close to finding bottom. There’s more layoffs and projects getting shelved daily. When this falling knife finally finds the floor, don’t expect it to bounce back like a super ball either. Real estate prices rocketed into outer space in a very short period of time and they have a lot more to fall before they get back in line with personal income again.
I agree that if you can afford a house, and find the right one, then buying is not a bad idea. I bought last June, knowing full well that prices would continue down. I was not a first time buyer though. I was basically transferring equity from one home to another. Being able to afford a house is not the same as being able to qualify for financing. Why stretch yourself if you are on the margins when it comes to financing. You will make life a lot easier on yourself by waiting and buying at a dramatic discount in the future. I predict a drop of another 100K off the average before we are at bottom. Don’t be afraid of missing the bottom. It will be with us for a while and you will have plenty of time to shop then.
Judging by the increased traffic on this blog, people are definitely more concerned with the current state of affairs regarding real estate and our economy. That goes for bulls and bears alike.
Hmmm….$100 000 k off the average? Isn’t that a tad optmistic? What timeframe are you talking?
As unbelievable as it seems, houses are still selling at high prices. I am currently looking for a home, and I can’t tell you how many I’ve been interested in that were sold by the time I’d had a chance to look at them. And I can’t tell you how many offers (weren’t even that lowball) that weren’t even countered.
I’m trying to make sense of all this, are people being naive/stupid expecting things to pick up or is it stupid to wait for things to go down as far as you are saying?
Cheers and congrats….that does have an edge to it though.
After the drilling we build the equipment that goes on the site. The drilling in the states is going up and we sell to the states. The pent up demand for equipment is going up in Alberta so the sales will come.
You seem to have a negative comment for everyone who has a positive one. I’ve been involved in enough project to recognize your kind. You’re one of those people who says “we can’t because…”.
Whatever. You say the sky’s falling, I don’t but I don’t think you have my perspective on what the industry is doing.
Josh:
You observations are correct, but they are based on CURRENT market and economic conditions. The price drops are based on OTHER predictions that economic conditions here will worsen and layoffs will happen. So, the drop is based on a rational predicted cause. If the “cause” happens, the “effect” they are predicting (further price declines) is quite logical. If someone believes the bottom is here or behind us, of COURSE they’re not going to believe that prices will drop!
As far as views go? I think “we have hit bottom and are on the road to recovery” IS naive. I think the 0% house price gains predicted by RE boards is generally way too optimistic. TD Banks financial analysts were predicting 10-15% drop in RE for 2009 and possible another similar drop in 2010. On the other end of the spectrum, you have doomsayers predicting an economic ice age. If I had to pick ANY group that I hope is WRONG it’s these guys! They don’t know what they’re cheering for! I think the optimists are wrong for now, but if I had a choice, I’d hope THEY were right!
Only one thing has been a certainty since the peak – some folks have said that every month was the bottom, and this is only a short term correction and then back onto the fastrack to unbridled growth. These folks, historically, have been wrong 20 times in the alst 20 months. The big question is, how many more times will they be wrong? Eventually, things WILL pick up, and they will be right! Like a stopped watch: it tells the correct time – twice daily!
Cheers,
E-town
RE: e-town
“…and enjoy the recession over a nice glass of wine… while you watch your downpayment dissolve into a puddle of negative equity when the REAL layoffs hit and the REAL price correction starts.
Hey, we’ve seen a 17% drop in avg price and a 31% drop in price/sq. foot in 20 months. Gee. If I was a realtor I’d be tying into the wine too!”
You answered one question…I guess you’ll be buying a house with a bunker. Try a more positive outlook and things will alway work out much better. I know you haven’t tried that, so, until you do…you can’t understand positive thinking.
As for the decline in housing prices…why does everyone want to compare today’s housing prices with that VERY SHORT window when the prices went through the roof? Compare house just prior to that and right now and you’ll actually find houses are worth more today than they were a few years ago. So what is all your panic about? If you bought at the top of the market, you have equity problems, if you bought prior to the giant jump in prices…all is good.
I am well aware of statistics and don’t need any lessons on them, thank-you. The point you’re missing was — the average price means zip, zero, nada! Can you grasp that? If the houses selling are all selling at the lower end then what does that do for your statistics? If a few million dollar houses sell in an area, what does that do for the statistics? It is far better to look at individual areas and compare housing prices in a more accurate way. Did you forget during that little bubble when housing prices shot up tremendously, there were dumps selling for over $350,000.00. What did that do for the average? The dumps have come back down to reality. You can now buy a decent house for 350,000.00…which, by the way, is waaaay ahead of Edmonton housing prices only 2 years ago when we were supposedly booming more than today.
Alberta will be fine. Once the Oil Moguls have lowered wages and brought their expenses back into perspective…the oil barrel will climb again. Don’t forget the super-rich control the price of oil…not the market. You live in a dictatorship and don’t even know it.
As for telling me what my house is worth, I’m well aware of that. It’s worth about 150,000.00 more than I paid.
Now I’ll allow you to close your bunker door and get back to safety. It’s a scary world out there if you let it be.
Live, Laugh and Learn. Sure beats the heck out of waiting for the doomsday rock.
Ah no E town, I have it bang on. What I am saying is what happened and now we have what you are saying. The majority of what is left is what people are buying. It stands to reason that people buy mostly what is mostly available. Sure prices have dropped but this is much less impact than the price range of what is actually available.
Statistics tell you where you were, not where you are. You will only know where you are when it is too late.
You still haven’t answered the question, you just keep trying to deflect and change the subject… which I guess I will just take as an answer in and of itself.
And the stock market really isn’t all that different then housing, if you feel something is greatly overvalued, it’s a bad time to buy it.
I disagree with you that the market is greatly overvalued. Having said that I don’t believe it’s done correcting either. I have answered your question numerous times and since you don’t hear the answer you are looking for you refuse to accept what I say. This suggests to me that you only see the real estate market from a narrow perspective. I think the real estate market has no or little value you to you therefore that must be the case for everyone. Btw I have never pretended to be a seer into the future, but I do know there are lots of people who agree with me and many who don’t, but if life was as simple as you think it is then I’d guess we’d all know the answer.
Jim, you are right, it’s not fair to compare current RE prices to the all time high, which lasted for 2 days in that sunny days of July 2007 supported with 40 something million dollar home
sales in that month.
You’re welcome to disagree with me, but I still haven’t seen a answer for my question. Maybe I just haven’t asked it in a clear enough matter, I don’t know.
I’ve never said real estate has no value to me, it’s actually done very well for me. A fair bit of luck was involved, but I’m also an analyst by trade and have went to great lengths to understand markets.
And the one truth in the housing market that I’ve seen is that over the long run, it always returns to reflect the incomes of the market.
I bought a condo after graduating from university in 2000 for 100K, and with some help from my folks even had it paid off in 5 years. Decided to rent that out and by a nice medium sized house for about 200K in 2005.
Was very lucky as the market hadn’t gone crazy just yet, and soon rents took off and that condo was nearly covering it’s own costs and my house mortgage.
I also recognized the boom when it came, cause 40% year over year are just not sustainable for long. So I studied up on the prior booms and bust in Calgary and Toronto, as well as what was happening in the states and recognized that in almost all cases the signal for the end was inventory taking off. Wouldn’t you know it, that’s just what happened here too. Sure I missed the peak by a few months, but I still ended up with a tidy profit selling that condo for 350,000.
So now I have a paid off house, and have a couple hundred thou in my back pocket.
Trouble is for everyone like me, there is some poor guy who bought it, has now kissed away his down payment and is up to his neck in negative equity and it’s only getting deeper.
Even in the declining market my house now is still worth probably 300-350 today. But I don’t think it’s going to be worth that in two years, no where close.
When the market has came back down to earth I’m willing to be it’ll only go for 225-250, which is more then I paid for it and right in line with historical values figuring modest gains.
Like I eluded to in my earlier posts, even if you hadn’t heard of the measure, affordability is often measured as the median house price being somewhere in the range of three times the median household income of a market. Historically it’s been true for Edmonton too.
Right now we’re still sitting at over four. IMO somethings got to give eventually. Especially now they’ve reigned in the lending.
That’s why I think buying now is dangerous. Real Estate is the biggest purchases of peoples lives, and we’re often dealing with peoples life savings and long term financial well being.
Over paying for a house by even only 50-100K, can cripple a family. They’d be paying a lot more money then they should for 25 years or longer, and can find themselves in a nasty negative equity situation.
Caveat emptor I guess. I don’t claim to be able to time the market, or that people should try. Merely that they should try to ensure they don’t overpay. IMO, I’d wait until median price got back in line with income, and then you’re fairly safe in knowing that over the long run your house will be an asset, not a albatross.
Okay Car27: Gotcha. Fair enough. You were talking about drop since the peak, and I was talking about the recent UPTICK in average price. Yes, stats are historical data only – sometimes useful for short-term extrapolation, but in this market? Fuhgedaboudit. I was talking about an explanation for the recent uptick in average price despite falling price/sq. foot numbers. Makes sense if sales drop off sharply at the $400K range leaving some big dollar properties in the inventory – this obviously would offset a falling average price. Or so this would seem anways. Just trying to make sense of seemingly contradicting and counter-intuitive stats.
Cheers,
E-town
Sounds like you know everything you need to know so why ask a commission sales person like myself when you are soooo smart.
I wanted to see if you would give a straight answer. Sadly, you won’t.
Oh well. Keep pumping.
Ha ha Jim. Love your writing style. Good sport too.
- “Try a more positive outlook”
I don’t work in commission sales and I’m good at what I do. I can afford to be cynical.
- ” the average price means zip”
Yeah, uh we agree there.
- “The dumps have come back down to reality.”
- Agreed. All homes shot up but not all homes warranted the SAME %increase. The lower the VALUE, the bigger the post boom correction was needed.
-”Alberta will be fine.”
Fine in two months? Or two years?
-”the super-rich control the price of oil…”
You mean… OPEC is a… a CARTEL?! Oh goodness, this is headline stuff! Stop the presses!
- “It’s worth about 150,000.00 more than I paid.”
And my parents house is worth $450,000 more than what they paid back when Jesus was a fisherman. This boom was an anomaly. Some people GAINED in the short term and some LOST. But buying a home will ALWAYS beat renting in the LONG term. It just might take a few extra years for that “math” for some folks now. Nobody said live in a bunker or “never buy” Jim. That’s a knee jerk panick reaction that you get when you corner the fiesty and elusive “Alberta Realtor” with their bright golden coat. (ha ha golden coat.)
“Live, Laugh and Learn”
No, you’re thiking of “Play, Laugh, Grow” Jim, and that’s for toddlers. For adults it’s “Get in, Make a buck, Get the hell out”
I don’t need a bunker Jim. I don’t need to be fearful. I have objective data at my fingertips, and can see RIGHT through the “positive” spins salesguys put on things to keep bread on their tables. I actually don’t have a hate on for realtors like SOME people do these days.
Anyways, I’ve got two more cases of canned soup to put into my bunker here… Gotta run!
Cheers,
E-town
Thanks, Karl — you’re bang on! It’s the same as comparing oil at the current 40+ dollars to 140.00 (which was for how long?). Alberta did very well with a $40 – $50.00 barrel (granted expenses and wages have greatly increased). But, if you look at the history of oil prices — $40.00 is not a low price. Oil is, of course priced in American Dollars.
http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp
The anomaly is the 140 dollar barrel.
People like to focus on the unrealistic number as if it were some “norm”. The fact is, people in the oil industry got greedy (shocker) and now the adjustments are taking place. It will all be good in a short time. The last time I looked I didn’t see any electric cars in my neighborhood. Nor did I see any place to plug them in for a fee.
As for E-town, we’re not too far apart on our opinions. I also like the way you write, e-town. It’s the differing of opinions that make things interesting. What will happen will certainly be interesting…but fear will definitely make it worse. People, who can, have to keep spending…and people who can’t have to get their debt under control. Take care of your own back-yard and we’ll have a beautiful neighborhood. Stop spending and then don’t scratch your head wondering why all the businesses are closed. With lower gas prices and interest rates, if you’re still employed, you should have a shopping bonanza as everyone fights for your business.
Some facts from the Government of Alberta Finance Department:
The Alberta economy gained 3,300 jobs in
January.
Albertan average hourly wages grew as well, increasing by 1.6% on a month-over-month basis and 6.2% year-over-year.
The Edmonton Real Estate market fell 40.9% from January 2008. However, MLS sales in both Edmonton and Calgary did increase slightly from December levels, providing a rare bit of good news.
Here is the link:
http://www.finance.gov.ab.ca/aboutalberta/economic_bulletins/current_economic_review.pdf
Have a good weekend everyone!
Ron:
Edge? I’m a sarcastic guy. Your hesitation with me is not unfounded. But I meant the congrats. I have friends in O&G sector, service industry, downhole tools, etc. Do you think I want to see my friends lose their jobs? I’m just a market bear – not a social Pariah!
Thanks for answering my question. Raises more though, like this one: if the increase in biz for you guys was because of increased O&G activity in the states, how is that (on its own) an indicator of a recovering O&G sector HERE? And: How many Alberta based companies (like yours) will also benefit from this increase? I know Alberta O&G and refining technology is sought the world over. These are honest questions – not just more sarcastic wit.
As for “my kind” being the “we can’t because” type? I’m an engineering manager Ron. We don’t know the word “can’t”! So let’s not start with the “my kind” and “your kind” stuff or we’re just going to end up in a Oilberta style “My dad can beat up your dad” p**sing contest and truthfully, I’ve lived here almost 40 years and I’ve had enough of those for two lifetimes already! My dad is pretty tough though… You should see him chop wood. Oh yeah… Mean old bugger…
Cheers,
E-town
Now, Jim now you just stop it with the common sense there alright? ha ha ha
Hey check out this graph of historical oil prices:
http://www.wtrg.com/oil_graphs/oilprice1947.gif
Now, are we ONE HUNDRED dollars per barrel down? Or OVER DOUBLE the price of oil ten years ago! $40/barrel is a darned good price for oil looking at this graph. No?
Okay, now housing prices.
http://www.canadian-housing-price-charts.235.ca/canadian_housing_price_chart.htm
Are we 75 GRAND down from the peak? Or DOUBLE what prices were ten years ago?
So you’re right Jim. Let’s erase the madness of the last few speculation bubble years off the charts when talking about what “good prices” are. Right now, everyone is so wrapped up in market psychology (oil lost $100, houses lost $75K) that there is no longer any PERSPECTIVE.
Prices still gonna tank though. I’m stil a bear. Bear! bear! bear! I need some honey.
I’m just a little black rain cloud! Hovering under the honey tree! And peeing all over the bears having the picnic down below! Weeeee!
Wups. Lost it. Good weekend all!
Cheers,
E-town
Great posts by “e-town” and “Kenucho”
Now if you want another “oil” comparison that shouldn’t be done…Today’s Edmonton Oilers vs the Dynasty Oilers. That would be another one of those ugly minus-percentages we wouldn’t want to see. But, like all cycles…things go up…things go down. If we panicked about our current hockey and football teams we’d have to discuss changing our “city of champions” sign to “city of former champions.” Except we all know Mr. Katz is going to build us a new arena and a championship team in the not too distant future. Hey, don’t laugh, it could happen. Then again my house may appreciate this year too.
Holly:
Now, I’m as bearish as the next bear here but what exactly are you trying to prove? Right now is an EXCELLENT time for someone that is considering moving up to a bigger place or a better neighborhood to buy. The price difference, boom or bust, has largely been a wash (cancels out) for people in the market looking to move up. Friends who bought at the peak did well – they also SOLD at the peak. For first time buyers there are other considerations:
a) Employment security
b) Household income / affordability
c) Cost of renting vs. buying
d) Risks associated with buying now
e) Risks associated with waiting now
If you take all the people thinking of buying right now and look at their INDIVIDUAL situations and needs, you might find some should buy, some should wait, some should take a harder look at their spending habits or career choices.
I also find it ironic that’s ok for you to be a “residential landlord” yourself and have some sucker pay your mortgage (and using government backed mortgages for the loans to do it) while bashing Sheldon. I mean, I am sure you residential real estate investor / flipper people believe you are doing a PUBLIC SERVICE by allowing people to rent your flips while personally contributing to rampant price inflation. But I just think this prevents working class people from being able to buy homes. If speculators, flippers, and REINers got the hell out of residential real estate we would not have had a housing crisis in the first place. I personally believe that all investments in residential real estate should require 25% down minimum, NO high ratios allowed, with higher capital gains tax. Flippers just cause bubbles. They don’t contribute to an economy with new technology or “widgets” so why should their self-serving behavior be encouraged? And why should I, as a taxpayer, have to support government-backed loans on other people’s housing investments? Sounds reasonable to me…
By the way, asking Sheldon to say, IN GENERAL, whether or not its a good time to buy is as sensible as asking a priest if it’s a good time to believe in God and then complaining the answer you got was not definitive enough.
Cheers,
E-town
My opinion is that the market will have bottomed when we stop asking the question, Has the market bottomed? At that point no one will care and then it will have bottomed. Unfortunately that’s a ways away.
To be completely honest, as a potential buyer in this market, watching all the bickering back and forth, the gross lack of professionalism displayed by the realtors on here truly makes me not want to deal with a realtor at all. I understand you may be egged on by others, but you are publicly representing yourself on this forum to be someone who succumbs to the assinine comments of others. My realtor will be one who can take adverse and jabbing comments and respond to them politely, tactfully and without losing their cool.
Lol, this is too funny.
The entire planet is mired in the midst of a deflationary depression worse than even the 1930s, yet Sheldon thinks the decision to buy real estate “should be based on personal circumstances and market conditions.”
The obvious reality is that it does not matter how good (or bad) your personal financial situation is. Buying property in Edmonton (or virtually anywhere else in the world) is a terrible investment decision during such exceptionally poor economic times.
But, we should not slam Sheldon too much. (Although, yes Holly, it is fun. And hard to resist).
After all, if I were a salesman (oops, I mean “real estate professional”), I too would do and say whatever it takes to close sales and put food on the table.
After all, it’s not Sheldon’s fault real estate in Edmonton and all over the world is a horrible investment right now and will remain so for several years. But, as a salesman, it is simply his reality to cope with. And at least he’s giving it the ol’ college try. I mean, crowds at West Ed Mall an indicator of increased consumer confidence? Any creative writing professor would be proud.
But with that said, he is responsible for his own words, and I simply cannot resist hanging him out to dry with this gem:
“I disagree with you that the market is greatly overvalued.”
-Sheldon Johnston, Feb. 6/09
Care to wager on where prices will be Feb. 6/2010, Shelly?
Tell you what, if they’re higher, I’ll buy a house from you.
If they’re lower, you have to sell my used car for me.
Deal?
Bubbles,
Good luck with the construction of your bomb shelter. Some people thought nuclear holocaust was imminent too. I am curious though. When will be the recovery ? Can you predict that? What happens if oil goes up again to let say $50 -$70, does that change your opinion? So is it only a good time to buy or sell when you say it is? What about people who are in the market already? Should they hold off? and how long should they put their lives on hold?
If you Remove me from the market my total number of sales are not significant and still people are going to buy and sell, no matter what you say. So should I just fold up my tent and call it quits ? So if People are going to buy for various reasons, it seem a little arrogant to assume that because you are scared and you have no confidence in anything you’ve created or built up that the world should stop until you say it should go on.
people are continuing to buy real estate all over the world and yes demand is down, hence prices have come down. As for where prices will be next Feb they will most likely be down but that is not a certainty. The lack of and lowering price of higher end sales will have alot to say on the average price in the year to come .
So in the next year or so its hard to predict with certainty what will happen as things are still unfolding.
Currently though regardless of what your opinion is there is reasonable strong activity and sales and unless there is an “event” to curb that demand in the market things look like they balancing out in terms of supply and demand in certain price ranges and areas.
btw only my really good friends call me Shelly… I guess that means we’re friends now
I’ll pass on the fools bet.
No where’s the fun in that. However judging an industry by what I say or do would suggest you don’t truly understand what you’re getting into and you could end up making some mistakes you’ll regret. I mean why wouldn’t you at the very least interview some professional REALTORS and do some research before you make a critical decision like that.
Here are a “few good men” and “women” that you may want to consider talking to but that’s entirely upto you. http://edmontonrealestateblog.com/2008/12/did-you-know-that-the-public-can-now-after-twenty-years-in-real-estate-ive-seen-alot-of-things-that-have-impressed-me-and.html
Lol, well it looks like my first comment was deleted, so allow me to re-post a summary version:
“I disagree with you that the market is greatly overvalued.”
-Sheldon Johnston, Feb. 6/09
Would Sheldon (or anyone else) care to wager on where prices will be Feb. 6/2010?
Tell you what, if they’re higher, I’ll buy a house from you.
If they’re lower, you have to sell my used car for me.
Deal?