Did the fearmongers scare you?

The 30-day median price in Calgary at $430,000 is now higher than at any time since August 2007. I remember the doubt in many buyers’ minds in early 2009 after the sub-prime mess in the U.S.

For those who took the risk, if you bought an average home in Calgary in Jan 2009, the median price has risen $55,300, or 15%. Average price is up $86,993, or 21%.

Bubble bloggers, most of whom have gone by the wayside, were spreading gloom and doom, eagerly awaiting the market to crash, as they stocked up on bottled water, ammo, and canned goods.

How many buyers are now sorry for listening to the doomsday crowd? Was it worth waiting three years, only to pay an additional $55,300 for your home? What are you going to do with all the canned beans, ammunition and firewood? Do you feel like the Greater Fool?

The graveyard of bubble blogs is getting crowded

22 responses to “Did the fearmongers scare you?

  1. Geordie Guenther

    It’s funny how so many people, due to predictions and pride, put themselves in the position of wanting their doomsday scenarios to happen.

  2. It’s alright, the mainstream media has taken over where the blogs left off…

  3. Lol, I was spreading fear during 2007 until the big market crash of fall 2008-2009. Realizing that it finally happened, I bought a home in a prime Calgary inner-city hood April 2009! So many of my “fellow bears” said I was jumping in too early and that homes would crash further. I think I was smart in changing my mind when the situation changed.

    I stole it for a price last seen in 2006 before the big jump. It was a partially reno’d R2 lot bungalow that I’ve been getting offers on from inner-city builders for 30-40% more than I paid for it! The owners panicked and wanted to sell their rental property before things “got worse”.

    We love the hood, love the home, love the way people say it was a steal for me to get into this area of town for the price I paid. Excuse me now while I go walk my dog to the local coffee house :)

    Only issue is that construction seems to never end with this gargantuan new homes they are building around us. Where is all this money coming into Calgary from?

  4. There were 99 Single family homes sold yesterday. 15 went for list price or higher.

    Over the past week, 14% of sales were for list price or higher.

  5. I personally can’t afford a home at these prices even during the price Correction after the crash.It’s still nowhere near affordable to me, not sure whose buying the SFH but the market is heating up, it can’t be single income families late 20s or I’m doing something terribly wrong :s

  6. Hi sam,

    It would seem Calgary is no longer the small city with a big secret that nobody knew about. We’ve gained too much reputation as Canada’s energy centre and with that came money from overseas. We are no where near the levels of New York or London or Tokyo or Vancouver by any means, but these aforementioned cities at one point or another had their start too. Some cities just reach that “unattainable price” of ownership, and if world petro prices keep sky high, there’s little movement downward in real estate prices unfortunately.

    There has always been this feeling that we should be able to buy a stand-alone house on a nice big lot in a nice hood, otherwise things are “overpriced”. Well, look at many other cities where buying a condo is a starter home or renting is the norm. We as Canadians have been coddled to the point that home ownership means single-detached-two-car-garage and a picket fence. This is no longer the case in the big cities. Calgary is still very affordable, but you can’t be too picky.

  7. A graph of prices in Alberta looks more like a normal correction than a crash, which is expected in any market.

  8. Waterworks, have you ever checked out the Texas? Check out these houses in Houston.

    Here’s a 3 bedroom, 3 bathroom, 2244 sq ft house with garage listed for $134,900:
    http://www.trulia.com/property/33056928-14535-County-Cress-Dr-Houston-TX-77047

    This McMansion for $180k ain’t too shabby either:
    http://www.trulia.com/property/1053050151-16426-Mesa-Point-Dr-Houston-TX-77095

    The GDP of Texas is almost that of Canada. Texas is the Global Leader in Energy Sector and Houston is the ‘Energy Capital of the World’. They make a lot more money than Calgary or Alberta.

    Texas is also a major hub in the U.S. for development of computer components, systems and software (ever hear of Texas Instruments?). In 2011, 6 of the top 50 companies and 51 of the 500 companies listed on the Fortune 500 were from Texas. A large number of defense contractors creating a fair amount of employment also reside in the state (specifically Dallas and Houston). The state is also home to two of the Army’s largest facilities (geographic size). They have a very large and diverse economy compared to Alberta and Calgary.

    Houston is the largest city in the state of Texas and the fourth largest city in the USA. The population is just under 6 million. I also heard that they ain’t building more land in Texas! So please tell me again, why is property in Calgary 3 times more expensive than the Energy Capital of the World?

    I have some experience with a Houston resident who originally lived in Crescent Heights in Calgary. I helped him with his house sale in Calgary when he moved to Houston, and followed up with him on his home-buying in the U.S. To get a similar home in an inner-city location, he said the price difference between Calgary and Houston was very small. Looking at listings on the internet can be very misleading when you don’t know the context. -Bob

  9. Over the past three days, 13% of the SFH sales were for list price or higher. A home in Highwood was only on the market for 3 days when it received an offer of $435,000 which was $10,100 over the list price. It was purchased in 2001 for $179,000.

  10. B Frost, you may be able to buy a lot more house for the money in Houston, but you might not live very long to enjoy it. On a scale of 1 to 100, with 100 being the safest, Houston has a crime index of 3. As well, you have a 1 in 92 chance of becoming a victim of a violent crime and a 1 in 17 chance of becoming a victim of a property crime.

    Thanks, but I’ll stay here in MUCH safer Calgary ;)

  11. Median household incomes in Houston and Texas are significantly lower than Calgary and Alberta as well.

  12. 2010 Average Calgary income $55,860
    2010 Average Houston income $46,290

    According to Neighborhood Scout (where you got your crime information), most cities score low on the Crime Index:
    Spokane 2
    Phoenix 10
    Washington DC 6
    San Francisco 10
    New Orleans 11
    Missoula 12
    Miami 3
    Minneapolis 5

    I agree that Houston is definitely not the safest city in America, but the retirement town of Phoenix scored a measly 10 and so did San Francisco. Houston tied Miami at 3 and even beat Spokane’s 2. Unfortunately the website does not provide comparative data for Canadian Cities. I derive from this data, that cities in general are a dangerous place to live.

  13. B Frost, you are comparing average individual incomes in Calgary to Average HOUSEHOLD incomes in Houston. Let’s compare apples with apples here. Calgary’s household is closer to $90,000.

  14. Geordie Guenther

    I had heard that Houston was relatively cheap because the city just kept expanding outward and onward. There was no municipal effort to stop the urban sprawl, so prices stay down.

  15. That’s EXACTLY what I’m comparing. Houston’s AVERAGE SALARY was $46,290 in 2010. Multiple sources cited:

    http://www.bizjournals.com/houston/news/2012/01/23/houstons-average-salary-is-46290.html
    http://news92fm.com/117262/business-watch-january-24-2012/
    http://payment-rent.com/property-management/houston%E2%80%99s-average-salary-is-46290
    http://www.paidemployment.com/States/TX/MetroAreas/Houston-Sugar_Land-Baytown/Default.aspx

    “In Houston, the average hourly pay per worker is $22.26.” In Calgary it’s currently approx. $25.

    You seem to prefer using Household Income, so we can use that statistic as well. The average household income for Houston was $79,812 in 2010. In Calgary the average household income was $88,410 in 2009 (close to the $90,000 you state). Sources cited:

    http://www.clrsearch.com/Houston_Demographics/TX/Household-Income
    http://www.statcan.gc.ca/daily-quotidien/110628/dq110628b-eng.htm

    Now let’s factor in lower taxes, lower cost on consumer goods, less expensive housing and tax deductible mortgages. The standard of living is quite high and very affordable.

    Here’s another article:
    http://www.chron.com/business/article/Study-Low-cost-of-living-makes-Houston-attractive-1363577.php

    Houston finished among the top 10 cities for intellectual capital and innovation as well as health, ‘SAFETY’ and security. Yes, they said safety.

    There are many affordable cities in the USA. I chose Houston, because it’s the Energy Capital of the World. Dallas and Austin are also right up there. Housing prices are much less in these large Texas cities, even though their economy is also very dependent on the energy sector.

  16. Yeah, B-Frost…. I’ve been to Dallas and Houston many times and I am sorry to say this but Calgary is a much better city overall. I will gladly pay for the safer city, the more TOLERANT (racially, sexual orientation-wise, socio-economic status wise) city, and the more dynamic city. Calgary finally has leadership that wants to prevent urban sprawl.

    Not to mention that I’d much rather stay a Canadian citizen. Perhaps we should be comparing Calgary to other cities in Canada. You can always find a “grass is greener in the other country” example. I’m sure that there are very nice hidden gems every where around the world depending on which metrics each individual has regarding “quality of life”. I am told there are some beautiful places in Thailand that are super safe, green, clean, etc etc that can be had for half the price. Maybe we should all move there?

  17. You’re all in for a big suprise folks, you’re too short sighted and are basing your predictions on wishful thinking. I’ll remind you when I’m buying your house at a discounted rate. Keep using your HELOC’S to fund your renovations so I can purchase a turn key house.Thanks in advance!

    I notice that you’re in Toronto, so you may be correct for that city. It’s different here. :) -Bob

  18. I believe that Toronto will be 2nd to Vancouver as far as who will be hit the hardest, I don’t believe that its different in Calgary due to all the turmoil in the global financial markets. The damage may not be as bad, but I do think that its not different in Calgary.

  19. Have lived my entire life in Edmonton, cost of homes has been dropping since 2007, and wil drop again and again and again.

    They;ve built too many houses, too many condos (which arent selling BTW) even the Century Park development is nowing turning to a rental.

    5 years from now your house will 50% of what it used to be.

    Because its NOT different here!

    Check this out for a different opinion http://edmontonrealestateblog.com/2012/06/single-family-home-sales-soar-in-edmonton-in-may.html -Bob

  20. In Edmonton homes can sit on mls for decades without one offer. If the house is priced right it’s quote priced too high. The price is lowered and lowered again still no offers. The price is lowered to the point where all the potential buyers believe something is seriously wrong with the said house and again no offers. This cycle repeats over and over again resulting in falling prices and zero sales.

    Tony, I noticed that you clicked over from Garth’s blog. Your exceptional and unique analytical skills would be more appreciated there. -Bob

  21. If you purchased a home 2007 or later in Edmonton or Calgary chances are great that your home is now underwater or is now less than what you paid for it. Thats 5 years of dropping values how many years will they drop more?

    That’s very misleading. SFH prices hit their bottom in Jan 2009 with an average price of $413,049. The price now is around $500,000, about the same as in June 2007. -Bob

    • Because they no longer include Edmonton area homes only Edmonton. Home prices useds to be Edmonton and Edmonton area. Now just Edmonton, so all those falling homes prices around Edmonton no longer drag prices down. Correct???

      My comment refers to Calgary, but the criteria which I use for Edmonton stats has remained consistent for over five years. http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html -Bob

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s