Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:
New listings: 459 (425, 449, 444)
# Sales: 203 (214, 218, 202)
Ratio: 44% (50%, 49%, 45%)
# Price changes: 235 (266, 238, 275)
# Expired Listings: 121 (88, 351, 102)
# Withdrawn/terminated/etc. listings: 32 (33, 36, 31)
Net loss/gain in listings this week: 103 (90, -156, 109)
Active listings for single family homes: 2570 (2514, 2453, 2555)
Active listings for condos: 2022 (1968, 1930, 1987)
It's funny, sometimes it seems like you can feel the market picking up momentum, then you look at the weekly numbers and it's just an average week. Other times it seems painfully slow and the weekly numbers are above average. Perhaps it's just because it was another one of those weeks where a few clients missed out on properties they wanted because they waited to pen to paper.
The Realtors Association stats show that there have been 815 sales so far this month, if the pace continues there will be around 1300 sales for March. The overall average residential sale price sits at $312k, up from last week and last month. Single family homes are at $350k – also up from last week and last month, and condos are at $232k – up from $226k last month.
Happy Friday!
Could Edmonton resale prices hit bottom yet?
This is getting very interesting!
I bet that the next 3-4 months will confirm.
It sure seems that inventory has stabalized.
Could this be a more ” normal” amount of inventory for a city the size of metro Edmonton? How do we compare to other cities in North America on a per capita basis?
Bob Truman’s site doesn’t show Edmonton SFH median or average prices going up. Still dropping?
http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html
FACTS:
USA consumes 20% of everything produced in the world which amounts $13Trillion.
S&P500 best represent the Economy of the Country that consumes $13Trillion of the money in the world (USA).
Baltic Dry Index measures the global trade volume and price of shipments of Oil, Food and Construction Materials .
Both, the S&P and Baltic Dry Index have fallen close 60% since September 2007.
In February for the first time in 18 months the Baltic Dry Index rose more than 80% (in just one month).
PERSONAL OPINION:
In February, Baltic Dry Index has rebounded from what in mi opinion was the bottom of the global economy crash; since also the S&P500 had a great rally last week. This does not mean Markets in Main Economies will recover back to the same level they were in 2007, but Markets have refused to fall any lower, regardless what speculators have to say. An increase of global shipments shows that the Demand for Food, Energy and Materials has stopped falling and it is “slowly” starting to rise (this time at a more sustainable growth rate we must hope).
FACTS:
Increases in Food Demand are directly related to an increase on the Demand for Fertilizer and guess where the World’s Largest Fertilizer Producer is? The answer is: in Saskatchewan – Potash Corporation.
Increases in Energy Demand are directly related to an increase on the Demand for Oil and Gas, now, guess where the world’s largest Reserves of Heavy Oil are? The answer for that is: in Alberta (and Venezuela). Canada is the 7th largest Oil Producer Country with more than 3 Million barrel of Oil per day times $50 (which has been the Average Price of the Barrel of Oil for the last 5 years) that equals $150Million coming to the country (mostly to Alberta) every day in revenues (that’s over $50Billion in revenues for a whole year)
Increases in Construction Material Demand are directly related to an increase on the Demand Minerals; more than 30% of the Companies Listed in the Standard and Poor Toronto Stock Exchange are Mining companies from BC, Quebec and Ontario.
PERSONAL OPNION:
More efficient than a Government Bailout Package to save the Economy is the Consumer Confidence.
Consumer Confidence is returning to normal levels in some countries faster than in others, but it is returning.
The Global Demand for Food, Energy and Materials is picking up, the Demand for Canada’s best resources is picking up.
There are still lots of dark clouds in the near future (unemployment might go up a bit more) but if we (Canada…specially Alberta) stand strong, we will find the sunny days lying ahead for our Economy.
We (Canadians…specially Albertans) will be fine
The Realtors association includes additional areas. As you can see on Bob’s site it says in red right at the top: Note: These areas do not coincide with the criteria used by the Edmonton Real Estate Board
We’re still few years away from the bottom. TD bank released their quarterly provintial forecast this week. According to the report house prices in Alberta will fall 15.8% in 2009 and 7.3% in 2010.
Alberta House Prices
2006: $285,400
2007: $356,200
2008: $352,900
2009(forecast): $297,300
2010(forecast): $275,700
This is mainly due to the unemployment rate which is forecasted to more than double in 2010 from 2008 levels in Alberta.
http://www.td.com/economics/qef/prov0309.pdf
House prices were “stable” during these months last year (though $/sq.ft. was dropping). The inventory is a little lower this year than last, we’ll see if this is the bottom or not.
I have been noticing a positive change in TSX for the past two weeks. Oil is also going a bit higher (around 50$). Are these some good signs? not sure because TDs report says something entirely different…
Alright…
Have we reached bottom or not?
How’s the economy?
How’s your jobs?
Have you guys’ spending habits changed?
I mean.. Are you going to make that big purchase? Buy that dream car? etc?
So?
What’s holding you back?
I, for one, want to spend a few $$$ ($2500) into performance parts for my truck.
My job is secure.
I can’t lose my job.
I will spend as per normal.
I will buy that new barbecue, that new patio set.
I won’t buy it on credit. Save a bit first.
Edmonton resale prices will fix themselves… 22% is enough
Save some money as you will need it. The only people who are spending are the clueless. Wait this downturn out it will get worse. I have staff that have no idea of the pain to come. If I tell them I get no production untill I lay them off. Hopefully things pick up but I have my doubts. Manufacturing is down 73% for oilfield inc natural gas drilling. AB is in for some trouble. Long term AB will be fine I hope as I have Milions at stake. If I am wrong I will have hundreds at stake
The stock market may have hit bottom but the economic situation as it affects Alberta has not. I am aware of several thousand pending lay offs in the resource sector as many people are still finishing up contracts initiated prior to the correction in commodity prices. Last month was the first month we really saw the impact of this (20,000 jobs lost)…so we are starting to see the impact of the crash last year now.
Now people say oil will go back up again and everything will go back to normal, if only it were that simple. Oil companies all forecaster that high oil prices were here to stay, indeed the lowest estimate I saw by a major was about 70.00 a barrel. Many of the major projects don’t make sense at less then $100.00 a barrel, particularly oil sands ones-as multi billion dollar capital projects have to be accompanied by a reasonable ROI…so I think once bitten, twice shy…even if prices went back to 140.00 tomorrow most companies wouldn’t resume the many canceled and deferred projects in the next 2-3 years as the majors are feeling a bit fallible.
Where we will see construction in the energy sector is Hydro Electric, some major capital projects on the books in Northern Manitoba and Quebec…some incentive being “green” energy infrastructure money and less risk then oil sands type development. Imagine Alberta workers going east for work
. I suppose the people from the east will go east.
Now as always, I am not forecasting doom for the Alberta economy – in fact we’ll still outperform most provinces and states, but to those who have grown accustomed to easy employment due to a competitive market, or double digit annual increases in wages or home equity… those days are gone for perhaps a decade.
Good job Kenucho – most people have never heard of the BDI, but it’s a leading indicator of economic conditions and is used by many economists as a red flag.
Dude, the Alberta economy was doing just fine before oil hit $100. Most of our revenue comes from conventional oil and gas anyways and natural gas is really cheap right now.
I’m going to set up a “doom & gloom” soup/rice kitchen. Line up early and get your rations before it’s too late. Please, only one 100 lb bag per (former) household.
When will people understand that they get what they plan for (positive or negative)? That said, think higher and receive better. The seeds for a recession have been intentionally planted, don’t nurture them.
Stop reading the newspaper and watching the news and the world becomes a much better, safer place in a short time. It’s not turning blinders on, it’s blocking out constant negative stimulus. Who needs to hear about every tragedy in every part of the world. These last several generations are the only (in world history) that have had to listen about every murder, and horrible event world-wide. If the news were positive, in any way, then it would have worth. As it is, it’s meant to freeze you in fear. It’s only other use is as a paid propaganda forum aimed at disrupting and disturbing your very existence.
Tell me, has all that fear-mongering done anything to enhance your life? Has it saved you from some peril? No, but you absorb it like it’s a daily dietary requirement. When, if fact, it’s simply something you would be better off without.
How many of their doom and gloom predictions have come true.
Lets see: Daily terror attacks after 911. Not quite as reported
Bird-flu…not as reported
West-nile…not as reported
World wide depression…not as reported
Dooms day rock…not to worry.
The point is, how many days were wasted worrying about what might be when the only thing that matters is what is?
Besides, what is the need to fear when all you need is faith. Fear is simply lack of faith.
It’s a joke! The list of potential doom is endless. Take a look out your front door. The birds still sing, the food still arrives on the table…the house is still heated.
I say, “take an actual look at the media’s daily dose of doom and see how much of it is real…and that which is real…is it really necessary to hear about every bit of murder and mayhem they can dredge up from around the globe?
Demand more from these irresponsible news outlets!
Amen!
Gotta love George Orwell’s 1984!
Cheers!
Anyone who starts a sentence with “dude” has no credibility.
You have nailed this one bang on Joy. Doomers never change no matter what the situation. They remind me of a SNL scetch called ” Debbie downer”. I’m sure it is on youtube. Your post is all true, good job.
There are doomers, and then there are realists. I consider myself a realist. Don’t confuse the two. I wouldn’t consider this a good time to shut out all news/information as Joy suggests. Joy you should learn to filter the news for yourself and not let it get the best of you. Maybe play some beautiful bird and/or whale sounds in the background while you read the paper. You can be informed and still be happy.
The Greater Fool blog is doing a post on Edmonton right now. I’m sure there will be some interesting discussion that we would all be interested in.
WARNING….possibly some doom ahead….double up on antidepressants and proceed with caution.
http://www.greaterfool.ca/
You are right, the oil sands is about 15% of the provinces GDP and 10% of Royalty revenue (though it’s royalties don’t really reflect production as they get a break on royalties).
However the growth we’ve seen in the province this decade is all attributable to the Oil Sands. So Alberta’s disproportionate growth in immigration, wages and prices are attributable to the sands.
Conventional Oil reserves are down to a quarter what they were in 1980, and production peaked in the early 70s. Gas reserves are about half what they were in 1980. So the oil sands are what fuels growth in AB.
Here’s some interesting reading on the Oil/Gas industry in AB:
http://www.energy.gov.ab.ca/Oil/pdfs/RISConvTechOverview.pdf
You know Spence, it’s not very smart to listen to Garth Turner’s predictions.
He’s been forecasting for 20 years that RE will be worthless as baby boomers sell their houses, so 2 million homes on the market all at once and no buyers!
So I have listened to him,
I’ve been waiting for 20 years to see RE prices going to near “0″
and finally I can buy a flat or something- and -what happened?
A $100,000 house cost $300,000,
20 years later.
So I wasted my money to pay expensive rents in cockroach infested apartments all these years.
And I’m planning to sue him:
Here I am with no house or condo in my possession, no ownership over anything, got no money in the bank as I spent it on rents and we now have horribly expensive house prices, all because I was waiting for the right time on his advise.
What should I do now?
Wait another 20 years?
I’m kind of old and poor now.
The least I can do is to not listen to this guy anymore.
Do you read what your write sometimes?
The same could be said for all the “its a great time to buy” or “Your going to be priced out forever” ads run over the past 3 years. So if your going to sue Garth over stating that baby boomers would sell on mass, and who btw wouldn’t get to that retirement age until right about now +5 years so I’m unsure what you where expecting 20 years ago, would someone then be able to do the same for the inviduals who sold those young families their $450K+ houses that are now worth $375K stating RE only goes up?
Of course not.
It’s not your fault your a bull, but with the stuff you write you’re more like a bull in a china shop then someone being a bull to help a cause and spur on excitement.
Sabb
Myth Busters did study on bull’s in a china shop. And guess what… the bull’s never knocked over a single piece of china. Who would have thought… So I guess we can’t use the negative analogy of a bull in china shop anymore. Oh well, sounded good though.
If anyone goes to the Garth Turner presentation it would be greatly appreciated by alot of the readers of this blog to hear what was talked about, for entertainment purposes.
Karl was just being sarcastic. Don’t take everything too literal on this site Sabb.
Birds, bees, trees, April showers, May flowers… whatever happy place you bulls need to go to hide from present day reality – whatever helps you sleep at night. The media is about sensationalism – and is as bad now during the recession as it was during the bull-run in 06/07. The difference is that THEN the bulls didn’t have ONE BAD THING to say about the media pumping their REINS and flips during their little speculator bull-run frenzy.
Here is a REALITY CHECK for you. Suncor merged with Petro-Canada and jobs deemed to over-lap are going to be axed – $300M in cutbacks. So, could you please tell me how the media is supposed to report on hundreds (if not thousands) of lost jobs without you feeling it was “negatively spun”?
If you want to counter-spin a recession Joy, I’d start with something a little more substantial than “spring is here and that makes people happy”. I predict spring is going to be reality check time for Edmonton sellers. There is speculator inventory not listed that is bleeding people dry and many spec condos nearing completion that might not get renters to pay the mortgage in light of falling rents elsewhere and rising vacancy rates. They will list eventually out of necessity, and the market will have its way with them.
Somehow I get the distinct impression that the bears battening down the hatches and saving money is directly impacting the thickness of your wallet… I think you’re a realtor. But I’ve been wrong before.
Cheers,
E-town
With this Suncor – PetroCan merger, projects that were put on hold can now go ahead sooner, which Alberta need right now. So thinks about this; a few lost jobs (because of the merger) or a gigantic amount of lost jobs (because of planned projects being put on hold until god knows when). Which do you think is the better out-come for Alberta and hence, Alberta real-estate.
I guess it’s all how you look at the glass.
Cheer
I don’t think the merger will affect viability of shelved or scrapped projects as much as oil prices will. I also don’t think (long term) we’re going to sit at $50 oil either. I just hope we don’t have another oil price run, resulting in another engineering and construction frenzy only to be followed by another price plunge. Those buzzwords again? SUSTAINABLE GROWTH! Sometimes I think those of us who wish for sustainable growth are the real dreamers. It’s always knee-jerk reactions and boom/bust cycles. Big oil has survived because it builds for the long term. But when you have a government that can’t spread out infrastructure growth and gets caught up in the ‘melee’, it’s a bad scene.
Cheers,
E-town
For starters it’s not the price of Oil, it’s the lack of Credit (required capital investment) that these Oil Sand projects require. Even you wrote “I also don’t think (long term) we’re going to sit at $50 oil either.”. So if you understand that I sure the Oil Sands players also do. So that’s why I don’t think it has anything to do with the current price of Oil, but the lack of Credit (investment)
I also think that shutting down Suncor Firebag midstream is sign that they wanted to renegotiate contracts with contractors that were, well let’s just say, bending them over in the boom times. The Oil Sand players are just being prudent. If they can get it cheaper they will. They are no different than You or I. If we think we can get it cheaper we will try to wait it out. That’s also why we are in Recession, everyone thinking they will get it cheaper if they wait.
Also it’s not the Government’s fault either. It’s the need of this society for short returns via the stockmarket or other investment vehicles. So until people start looking at a little longer term horizon than the next quarter we are going to keep having these boom-bust cycles.
Overall these type of mergers are actually very good in the long term. They will make Alberta’s boom-bust cycles less boom-bust and more substainable. Less player equals greater control of costs and existing resources and these guys know that slower development keeps costs down.
Just think… If in the future we have more and more of these mergers we won’t have to worry about a bunch of smaller companies competing for the insuffienct number of workers and resources we have in this Province. This merger can only help create a more substainable future for Alberta and get some Albertan’s back to work sooner than they would have without it.
Cheers
“So until people start looking at a little longer term horizon than the next quarter we are going to keep having these boom-bust cycles.”
Exactly. Chasing dips and valleys instead of long term planning. It does not work for individuals, companies OR the government.
Cheers,
E-town
since when is two companies merging into one goo for anyone but the controling company? Less competition equals higher prices to end consumers or lower wages to employees.
73 % of Canadian GDP is driven by domestic spending. So basically consumer confidence is the #1 thing driving our economy.
The media is BY FAR the greatest influence on consumer confidence….so opinions from various doomers/gloomers/bankers/chancers mean very little to me…..unless it;s from the owner of CNN.
Obama seems to have latched onto this in the US (smart fella)….and is spending much of his time on the TV..balancing the negative news that the media (until just recently) were producing with relentless enthusiasm…..I’m sure their ratings are excellent, but that doesn;t really help the rest of us, does it??
Now we see the stock market rallying, retail spending above market expectations (see Best Buy this morning)……the timing of this, with Obama’s “media counter-attack” is not a co-incidence.
Canadian consumers look to US news and affect their spending accordingly. This is what drove us into recession and the reverse will be true.
I belive myself a realist….but I do see growth returning to Canada (particularly Alberta) in the 3rd/4th quarter.
Re: Home buying…I bought mine when prices were higher, and I have no regrets. I have spent my time improving the home, settling down and enjoying making “a place to call our own” for my family. I don’t see prices reducing much more, if at all in Edmonton this year…and with the choice available and reduced prices out there, I think that trying to “time the bottom”, at the expense of finding the perfect home is a fools game.
Re: investing….I also know that many guru investors out there are strongly recommending to buy in Edmonton right now (Don Campbell, Ozzy Jurock)…they have spent their whole life researching this stuff, so I think you have to give it at least some weight.
That’s just my opinion – good luck to you all…whichever way you decide to go.
73 % of Canadian GDP is driven by domestic spending. So basically consumer confidence is the #1 thing driving our economy.
The media is BY FAR the greatest influence on consumer confidence….so forecasts, reports & opinions from various gloomers/bankers/polly-annas/chancers mean very little to me…..unless it;s from the owner of CNN.
(I’d be very interested to see what TD Canada said was on it;s way 1 year ago…..)
Obama seems to have latched onto this in the US (smart fella)….and is spending much of his time on the TV..balancing the negative news that the media (until just recently) were producing with relentless enthusiasm…..I’m sure their ratings are excellent, but that doesn;t really help the rest of us, does it??
Now we see the stock market rallying, retail spending above market expectations (see Best Buy this morning)……the timing of this, with Obama’s “media counter-attack” is not a co-incidence.
Canadian consumers look to US news and affect their spending accordingly. This is what drove us into recession and the reverse will be true.
I belive myself a realist….but I do see growth returning to Canada (particularly Alberta) in the 3rd/4th quarter (although this may be a slight contradiction from my initial comments!!!).
Re: Home buying…I bought mine when prices were higher, and I have no regrets. I have spent my time improving the home, settling down and enjoying making “a place to call our own” for my family. I don’t see prices reducing much more, if at all in Edmonton this year…and with the choice available and reduced prices out there, I think that trying to “time the bottom”, at the expense of finding the perfect home (or an income-generating investment, if that’s your thing) is a fools game.
That’s just my opinion – good luck to you all…whichever way you decide to go.
I totally agree with you James, Consumer Confidence will work better than any Stimulus Package from the government to boost the economy. Consumer Confidence is returning to more reasonable levels. Durable Goods Orders in the United States had a 3.9% February-March increase, the largest monthly increase since October 2007. Durable Goods Orders have been in a steady decline since July 2007.
http://www.nasdaq.com/asp/econodayframe.asp?page=http://anasdaq.econoday.com/byweek.asp?cust=nasdaq
Also, the Global Trade of Oil, Metals and Food surged in February more than 70% from its record low in more than a decade. I think we have seen the worst of this recession, this does not mean there will be an immediate full recovery of the economy, in fact we can expect more jobs loses in the next 6-10 months, but in the long run (12-18 months) global levels of productivity should be in better shape, not worse.
I totally agree with you James, Consumer Confidence will work better than any Stimulus Package from the government to boost the economy. Consumer Confidence is returning to more reasonable levels. Durable Goods Orders in the United States had a 3.9% February-March increase, the largest monthly increase since October 2007. Durable Goods Orders have been in a steady decline since July 2007.
http://mam.econoday.com/byshoweventfull.asp?fid=437975&cust=mam&year=2009
Also, the Global Trade of Oil, Metals and Food surged in February more than 70% from its record low in more than a decade. I think we have seen the worst of this recession, this does not mean there will be an immediate full recovery of the economy, in fact we can expect more jobs loses in the next 6-10 months, but in the long run (12-18 months) global levels of productivity should be in better shape, not worse.
Consumer confidence is all we need? Well, you’d better hurry and pump that ideology as quick as you can because last I heard, people who get LAID OFF tend not to be all that confident and spendy. So who’s going to be confident and dip into their savings and get some badly needed luxury items? Maybe a gas-guzzler complete with planned obsolesence from the ‘Big Three’? Maybe a nice Edmonton condo for a REIN or a quick flip? No? No takers? Do we need to draw straws here!? C’mon you bulls!! Where’s all that confidence gone?
Oh wait. You meant OTHER PEOPLE need to be more confident and spend THEIR money to revitalize the failing economy…
Okay, it’s all clear as a bell now…
Cheers,
E-town
Hi E-town, didn’t you read further than the 3rd line of my post? I know the economy is not good now and it will not be good for the next couple of years, all I’m saying is that we may have reached bottom. Markets can go down only so much. THERE WILL BE more lay-offs in the near future I just don’t see this labour crisis going any deeper in the long term. All your friends that lost their jobs will be back on the Labour Market in less than a year. Hundreds of small communities in Brazil, Russia, India and China, are growing and demanding Construction Materials, Energy and Food and Canada is one of the most reliable Nations in the World that provides in these three sectors. I’m with you on the hopes that the days of Condo Quick Flips are gone and I am also against people buying luxury cars they don’t really need and can’t even afford without sacrificing basic items in their lives. I really hope we all have learned the lesson. But look at the number man! Even with all the jobs lost in Alberta we are the second province in the country after Saskatchewan with the lowest unemployment rate with 4.4% (Canada’s=7.5%) and the first one with the highest Employment Participation Rate with 75% (Canada’s= 67%). We (Alberta) also have the highest weekly earning with $889. So if you take that number and compare it to what most Financial Institutions use to approve people for mortgage; that your mortgage monthly payment should not be more than 40% of your earnings, $889 x 0.4 = $356 x 52week-in-a-year = $18,512 in housing divide that by 12 months and you get $1,550 that Albertans can actually afford in housing every month, now let’s compare that with the overall average residential sale price $312k @ 4% for 30 years putting down 5% and you get $1,430. So we, Albertans, can actually afford the current Real Estate Market. If there is a bottom in this Real Estate Market we are really close to it. I am using Alberta Finance and Edmonton Realtor Association Stats. I really don’t see why people should not be confident in buying a place to live just because you and the media keeps saying people are getting “laid-off” over and over and over. Why doesn’t the media says the “still good stats” about the Alberta’s Labour Market??? Good news don’t sell as good as the Bad and Scary News, right?
When I say Consumer Confidence I mean families buying a nice place to live not a property to quick flip that wouldn’t be Consumer Confidence that would be Consumer Craziness after all that have happened so far. By Consumer Confidence I mean families buying a nice economic and fuel-efficient car and not big trucks, or hummers, or BMW, or Mercedes or any other un-necessary luxury car, again that wouldn’t be Consumer Confidence that would be Consumer Craziness.
http://www.finance.gov.ab.ca/aboutalberta/economic_bulletins/current_economic_review.pdf
Hi E-town, didn’t you read further than the 3rd line of my post? I know the economy is not good now and it will not be good for the next couple of years, all I’m saying is that we may have reached bottom. Markets can go down only so much. THERE WILL BE more lay-offs in the near future I just don’t see this labour crisis going any deeper in the long term. All your friends that lost their jobs will be back on the Labour Market in less than a year. Hundreds of small communities in Brazil, Russia, India and China, are growing and demanding Construction Materials, Energy and Food and Canada is one of the most reliable Nations in the World that provides in these three sectors. I’m with you on the hopes that the days of Condo Quick Flips are gone and I am also against people buying luxury cars they don’t really need and can’t even afford without sacrificing basic items in their lives. I really hope we all have learned the lesson. But look at the number man! Even with all the jobs lost in Alberta we are the second province in the country after Saskatchewan with the lowest unemployment rate with 4.4% (Canada’s=7.5%) and the first one with the highest Employment Participation Rate with 75% (Canada’s= 67%). We (Alberta) also have the highest weekly earning with $889. So if you take that number and compare it to what most Financial Institutions use to approve people for mortgage; that your mortgage monthly payment should not be more than 40% of your earnings, $889 x 0.4 = $356 x 52week-in-a-year = $18,512 in housing divide that by 12 months and you get $1,550 that Albertans can actually afford in housing every month, now let’s compare that with the overall average residential sale price $312k @ 4% for 30 years putting down 5% and you get $1,430. So we, Albertans, can actually afford the current Real Estate Market. If there is a bottom in this Real Estate Market we are really close to it. I am using Alberta Finance and Edmonton Realtor Association Stats. I really don’t see why people should not be confident in buying a place to live just because you and the media keeps saying people are getting “laid-off” over and over and over. Why doesn’t the media says the “still good stats” about the Alberta’s Labour Market??? Good news don’t sell as good as the Bad and Scary News, right?
When I say Consumer Confidence I mean families buying a nice place to live not a property to quick flip that wouldn’t be Consumer Confidence that would be Consumer Craziness after all that have happened so far. By Consumer Confidence I mean families buying a nice economic and fuel-efficient car and not big trucks, or hummers, or BMW, or Mercedes or any other un-necessary luxury car, again that wouldn’t be Consumer Confidence that would be Consumer Craziness.
http://www.finance.gov.ab.ca/aboutalberta/economic_bulletins/current_economic_review.pdf
“I bought mine when prices were higher, and I have no regrets.”
If you can afford your home and you like it? Well, that’s a good thing. But not everyone who bought high is as happy as you are. Especially those who are looking at negative equity, can’t get a “negative equity loan” and are facing job loss or are already laid off.
“I don’t see prices reducing much more, if at all in Edmonton this year…”
Well, you didn’t see prices going down when you signed either did you? But they did. People have been calling the bottom (and getting it wrong) for over 12 months now. And layoffs are getting MORE prevalent – not less. Prices can still go down. You “can’t see” prices going down further because you don’t want them to. And this is understandable.
“…and with the choice available and reduced prices out there, I think that trying to “time the bottom”, at the expense of finding the perfect home is a fools game.”
Timing any market is a fools game, you are correct. But many investors know the danger of being too jumpy and catching a falling knife. Paying more for the “perfect house” that you could pick from 1000′s of homes might be worth $500/mo or $1000/mo more for the next 35 years to some. For others, an adequate or “just nice” home for less than a “perfect” home is more important. Myself, I would pass on bragging about paying more for the “perfect house” especially if an adequate house meant me paying less, doing more and saving more. Canadians have been sold the idea that every working stiff out there must have the perfect home, and that lavish living is excusable because it’s not a purchase – it’s an investment. Since my house is only going to break even with inflation, would I not want the most COST EFFECT house possible, rather than the most expensive one I can afford?
We’re going to see 20% or more come off prices in the next 18-24 months, sooner if layoffs continue at the current rate. I can “see it” quite easily.
Cheers,
E-town
Sorry, I was laughing so hard there I fell off my chair. $889/wk. x 4 = $3556 ***NET***
20% goes to Steady Eddy and Mr. Sweater vest leaving $2850 for the month. Now the subtractions begin. I’d buckle up for THIS budget. Let’s start with the basics.
Mortgage payment $1430
Hey – Utilities – $300
And – Prop. Tax – $200
And – Insurance – $50
Housing costs = mortgage payment for 1st time dumb dumbs in denial. Housing costs per month on a $1430 mortgage is about $550 for a total montly commitment of $1980.
We got $2850 – $1980 = $870 dollars for the month for EVERYTHING ELSE. Like:
Car insurance: $100
Gas for said car: $100
Groceries: $400
Phone/Cable/Net: $125
And, $75 for entertainment
And, $30 for a new snow shovel
And, $25 for socks and undies
And, $15 for a bad pizza
What is that? Uh oh. That $870 is all gone! You’re house poor and only get internet and ONE LOUSY PIZZA! What a crappy life! If you have any of the following you’re living on credit and going BROKE every month:
-Daycare
-Credit card debt
-Student loans
-Car payment
-Spend more than $75 on fun
-The desire to have a life
And all this at the lowest interest rates will EVER be! Care to explain your math? You made two FATAL math mistakes right there. 1) Housing costs = mortgage payment and 2) Net pay = Take home pay. If you’re not in debt it’s nothing short of a miracle.
$889 x 52 = $46228. Maybe back in 1998 you could get a $105K bungalow on that kind of income.
Look at net household income. Probably closer to $75K. But if you add the daycare, car payment, student loans or a few more pizzas that’s not enough either.
Cheers,
E-town
Even with all the massive media doom and gloom blitz, things just don’t look like your typical recession. There is still very low unemployment…lots of available jobs. People are shopping, eating out and driving two vehicles…an odd recession indeed. But, keep believing what you read and it will arrive. Not because it had to, but because they froze everyone in their tracks (spending wise). Do you have to wonder why there are layoffs when everyone is made afraid to spend their money? Gee, that store closed because consumers were told to plan for the worst. It’s really not that hard to control peoples actions with a daily bombardment of negativity.
You have a choice each day…choose positive. The biggest losses I’ve seen are 100% decrease in the bright side of things.
People obviously don’t know the power of thought, otherwise they wouldn’t abuse it and allow it to be abused.
The perfect example is this: The richest people, and most sucessful people in the world don’t believe anything can stop them from achieving their goals, they always look past set-backs and see them as small stepping stones to reaching their goal! Without that thinking they’d truly never get anywhere…just like the masses they control. So, that said…why do the richest people in the world (who own the mass media outlets) allow all this negativity to disproportionately fill their newspapers and television programs? Do you think they live by this philosophy? Obviously not, or they wouldn’t be in the positions they are today. But, they certainly want you to live in the povery mentality.
Until you try it you can’t understand that they use a power that you don’t. They visulize what they want to come to them…and it comes to them. No different than you visualizing poverty, and loss and finding it at your door.
As for being a “realist”…analyze that statement and you’ll see it’s just a precursor to making a negative statement and setting limitations on the limitless.
Also, please do not underestimate the power of the written or spoken word…especially when it’s done repeately over long periods of time. It is a subtle brainwashing technique…some would say not so subtle. That is why you must be careful what you read, it affects you whether you like it or not. The newspaper and the TV News are akin to the dropping of propaganda leaflets on enemy troops. Would they use this technique if it didn’t work? There you have your answer. Try a week or two without the newspaper and TV and see how much brighter the world gets.
The definition of earnings is income or revenues minus costs (in this case: income taxes), Earning= Income-Taxes, so $889 is actually what you are bringing home, you multiply that by 0.4 and you get $356 x 52 weeks = $ 18,512 that you can spend on housing. Remember this is an average, some people bring home more than $889 per week. Also remember that this is per capita this is not per household. Chances are that in Alberta there will be two incomes per home, that’s why we have the highest Employment Participation Rate in the whole country. So the second income in a household can pay for the Property taxes, Utilities, Daycare, Credit Cards, Student Loan and Car Payment. If you think our numbers are that ugly then how can people in other provinces survive when they have even uglier stats? All I’m trying to say is that overall housing prices can’t go lower than $300k (on average of course). Do you really think price will go back to 2005 levels? $200k? All economists agree that back in 2005 Edmonton Real Estate was undervalued between 30-40% compared to the rest of the country.
Also, if Albertans are really struggling to make their Mortgage Payments, plus utilities and any other housing expenses, food, credit cards, daycare, and entertainment, then why is it that when you go to the West Edmonton Mall any day of the week is packed with people buying stuff, the South Gate Mall is expanding, by South Edmonton Common they keep building commercial spaces? I don’t think these spaces are meant to open Employment Insurance Offices. If things are really that ugly in Edmonton please go to the West Edmonton Mall and hand out flyers with all your lay-off stats and all the recession information you have, consumers can use your piece of advice; it would be greatly appreciated.
Also, E-town, if Albertans are really struggling to make their Mortgage Payments, plus utilities and any other housing expenses, food, credit cards, daycare, and entertainment, then why is it that when you go to the West Edmonton Mall any day of the week is packed with people buying stuff, the South Gate Mall is expanding, by South Edmonton Common they keep building commercial spaces? I don’t think these spaces are meant to open Employment Insurance Offices. If things are really that ugly in Edmonton please go to the West Edmonton Mall and hand out flyers with all your lay-off stats and all the recession information you have, consumers can use your piece of advice; it would be greatly appreciated.
I am still fascinated as to why contributors of the more negative disposition – such as E-town – tend to lace their points with such sarcasm and confrontation all the time?….It does make me chuckle….but it;s also kind of sad that we can;t just discuss.
Anyhow – to answer E-towns eloquent response….I am indeed “practising what I preach”..and items that I have been considering purchasing for a while (TV, appliances etc) I am buying. I am lucky enough to still be in a job, and I plan to spend more/save less until this is all over.
If people like me were to act upon the negativity of the likes of E-town….I would likely put off purchasing these big ticket items, in fear of losing my job later this year..instead I would save for that rainy day.
What does that mean????…MORE jobs lost down the road.
I am all for free speach….but if you really care about our economy..and the poor souls being out of work everyday…you need to think twice before speading your biased negativity
far and wide
So, you’re saying that the 889 was not gross. It was net. That translates to the median household income of about $75K which makes more sense. [Mortgage brokers and banks calculate a debt service ratio based on GROSS, NOT NET which is 40% of gross. I find this to be a very misleading thing to do to people - this works if you live a 50's lifestyle with a 27" tv and a radio and no fancy granite countertops - just a humble 1050Sq. ft. bungalow with an unfinished cellar with a canning room in the corner.]
So $75K gives the “Jonses” 800 more on my crude budget there. 1 kid in daycare takes care of that with a swipe of the pen.
In any case, with math like yours (75K annual income = 312K house) it’s no wonder people are in over their heads considering the number of people trying to live the HGTV lifestyle.
Then you change your argument and say that, well, there are likely two incomes. So what number are we using now? How much is “she” making? You weakened your argument there. Are we talking about $75K or not? Net or gross? My understanding is 75K GROSS is the median income, and debt service ratios (the 40%) are also calculated on gross.
All I am saying is that calling a 312K house affordable on even $75K net is not really realistic if you consider the average Canadian lifestyle. Then people say “You need to make sacrifices to be a homeowner.” And they respond “Yes, we’ll make sacrifices” and they make a budget (like the one I did) that NOBODY can live by unless they are Hamish.
Cheers,
E-town
“I am lucky enough to still be in a job, and I plan to spend more/save less until this is all over.”
So we’re to believe that you are a steadfast altruist who is going to personally do your part in fixing an economy ruined by corporate corruption, greed and deplorable lending practices by blowing your own cash? Or is it just what Canadians love the most – yet another convenient excuse to spend more? I’ll let the other readers decide that one for themselves.
“you need to think twice before speading your biased negativity
far and wide”
Right. Telling people to add up their monthly expenses and challenge nonsense claims of affordability makes me a terrible person. If putting the truth in front of people’s noses is a terrible experience for them, maybe they should ask why and not blame the messenger. The simple fact is that calculating housing affordability and debt service ratio on gross income and “fantasy” personal budgets is the reason why Canadian households are carrying MORE debt than ever before – now even more than their American counterparts:
http://tinyurl.com/ccharw
Canadians are also saving less than ever too:
http://tinyurl.com/c7vsww
The simple fact that this stuff is negative in nature does not make ME negative for simply reporting it. I’m just not the typical head-in-the-sand Canadian who confuses optimism and positively with stark denial.
Rationalization and denial has now become as Canadian as ice hockey and Tim Horton’s coffee. And you just can’t spin that into something positive, unless you subscribe to the “ignorance is bliss” philosophy of course.
Cheers,
E-town
Well, you obviously believe that consumer confidence is going to wedge us out of the recession. Trouble is, consumer OVERconfidence is what got us into this mess in the first place. Lenders dangled the carrot and Canadians bought in hook line and sinker.
You’re saying ‘poison is the cure’ – very interesting theory.
Cheers,
E-town