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Real Estate in Edmonton
02-26-2007, 05:04 PM
Not sure if we can discuss this on this board, but,
What do you guys think of the growing prices of real estate in edmonton? Who can afford to buy a house anymore? Rents are going up as well. Is it ever going to stop. :eek
Dave

jrs
02-26-2007, 06:17 PM
Not just Edmonton. Average house everywhere is pretty much out of reach for first time/young buyers. Looking at $200 000 in small town Alberta for pre-1980 house with basic elements. $300 000 plus for anything decent. 10 years ago you could buy a house in the Crowsnest Pass for like 40-50 000 easy. Avg sale now sits in the high $200 000. I think it will hit a block someday, not anytime soon though. Someone in my family had a house for rent in Lethbridge about a month ago and they had 30-40 calls a day for about a week. Just nothing available either. I was looking for something in Innisfail Red Deer area and there was no way i'm spending $200 000 for half a dumpy duplex in a old neighborhood. Crazy!!! Sorry for a bit of a rant but its crazy.

gunner 83
02-26-2007, 06:45 PM
it is crazy, but like everything, the market is cyclic, so eventually it will come down, and all this rig guys who bought an extremelly expensive house are going to be screwed. imo

Jamie Hunt
02-26-2007, 08:11 PM
Dave in my oppinion, buy what you can. You could be looking at these prices for while. Even if they do drop by $50,000 over the next 3 years you still would have spent $40,000 on rent.
Watch out for small towns as they will be the first to drop. Buy what you can in Red deer.. Good investment.
Edmonton is still relativly affordable.
If you cant afford a house, by a duplex. You cant go wrong.

Jamie

winged1
02-26-2007, 09:08 PM
For sure, the one's that are smiling are those with thier names on title.

entrag
02-27-2007, 09:23 PM
I am living in Red Deer and currently own a house. I am at the akward point of needed a larger place (still owe on this one
), but am fearful of the large mortgage needed for a larger place.

I recently heard a story of a young couple (friend of a friend) that just purchased a 1/2 of a duplex in North Ed for $285000. They placed 0 down, over 35 years! The thought of this SCARES me!!! What if interest rate rise 2% before there term is up? I feel sorry for these people starting out; sure they can probably afford the payments now, but what happens when they decide they want childern in 2 years and are living with possibly 1 income?

Jamie, you mentioned Red Deer in your post; I understand from past posts that you are a realtor. Is the housing increases in Red Deer are to rise (percent wise) greater than other areas?

Thanks,
entrag

Jamie Hunt
02-27-2007, 10:58 PM
En.
I just think Red deer is under valued is all. I think you will find people think Cagary and Edmonton are to much $$$. So the next best place will be Red Deer.

That 0% down thing scares me a bit also. But to be honest even when you put 5% down it is mostly eaten up by CMHC fees. A person can not save fast enough to keep up with the market increases.
Get in while you can or look at relocating to Sask.

Jamie

jrs
02-27-2007, 11:05 PM
"Get in while you can or look at relocating to Sask."

:lol Come on, lets not be too harsh. No bighorn sheep over there.

Any tips on areas around Red Deer that are preferable Jamie?
I am going to be living up there in order to work out of Hinton/Edson and areas around Edmonton (good central location). Any ideas of the best surrounding areas? I haven't seen any deals yet but i will probably look for a real fixer upper when i have time to take care of my own place. Always looking for opinions.

Jamie Hunt
02-27-2007, 11:22 PM
JRS. I really don’t know that market up that way. Its best if you go get approved for a MRTG, go find the BEST realtor with loads of experience in the market you want to live in, tell him/her your serious and ready to buy and let him/her go at it. Your first choice should be a realtor with at least 7 years experience in that market (Realtors tend to hit a wall at 5 years, anyone around after 7 is dedicated and probably will make this their life’s work) Find the one who has all the listings in that town and throw yourself at his/her feet. Trust me they will take care of you. If they didn’t take care of people they wouldn’t be around that long. (At least that’s how we look at it)
We run with a couple of different theories
#1 Its never EVER about the $$$$. The minute it becomes about the $$$ your in it for the wrong reasons.
#2 Don’t sell them one house, sell them and their friends a 100 houses. The only way you can accomplish that is to adhere to rule #1 and take what happens to and for your clients personally. I celebrate with my clients when we get a good house together, I also get angry with my clients when things go wrong. (Note I said with, not at) But a good realtor will take a leadership role with his client and bring them back to a even keel when things aren’t working out so well. A positive attitude goes along ways.

Good luck with your decision let me know if I can help

Jamie

winged1
02-27-2007, 11:31 PM
and, the other thing a junior Realtor typically does is overprice. Don't be shy to knock on a few doors by yourself. Many a deal can be had before a Realtor gets wind of someone wanting to sell. One thing is for sure, Realtors have market pricing at thier fingertips, so you should have one in your back pocket.

getasheep
02-27-2007, 11:55 PM
Yes the real estate market in Edmonton is crazy. I bought my first house this year. We started last winter but took 5 months to commit. In Feb 06 we priced out a brand new home in St.Albert for $245,000. When I finally decided to jump in it was July and by then that exact same home was $365,000! So I bought an older home in a nice area for $235,000 and the realtor and everyone thought it was a steal (it was an estate sale). My neighbour just sold for $325,00 in a 4 days (and I think my home is better but thats just me).

Anyways, A great realtor is a big help. Ours was on our side through the whole time (lost out on 4 homes before we got ours) and was on the ball with every listing around. She also sympathized with us being young first time buyers and the stress that goes with getting into this tight market.

I would agree with Jamie that it is not too late to buy a home. Yes its scary how expensive things are, but there is some room to go and rents aren't any cheaper.

I was also offered the 35 year mortgage but insisted on the 25 (I had to put down 10% which drained every cent I had).

Dan
02-28-2007, 12:16 AM
I would say to buy a house as well, as long as you will be happy with it and the area.
If you look at monster.ca, you will see 90% of the jobs are in Alberta. People are coming here from all over Canada. There is just no more vacancy. Its basic supply and demand.
The 35 year mortgage is a good thing because it will bring down your monthly payment. You will be paying a lot more interest but at least you can buy a house. You will lock into a interest rate for about 3 years and then after that you can get a 20 year mortgage if the rates go down.
People are going to start flooding here again after school is out and then prices will surge again so its a good time to buy.

Northern Hunting Mom
02-28-2007, 04:59 AM
Buy when you can no matter what. At least the mortgage payments are giong to stay the same for the length of your term. Any money you pay for living becomes yours, even if it jusy equity to help build to a better place or location.

From what I've heard, if you have a job, you can get a mortgage in Alberta. Don't let the fear of poor credit or lack of a down payment hold you back. Talk to someone now and find out really what options are there. I believe that a higher interest rate is still better than giving someone else your money in rent that you will never see again. The interest rates may jump up and down some but the housing market for a long time will be hot in Alberta. Do some math and see if it would be better to move further out of the hot spots in comparison to longer commutes and time away from home.

Buy when you can, if your credit is poor and you have little or no down payment then make your term shorter and work hard to get your credit rating up. Also, if your income is a feast or famine thing, see about a no penalty lump sum payment. And, a big thing is to set up your mortgage payments to be bi-weekly instead of monthly. Your home can be paid off 3 years faster that way.

I plan to try to buy as soon as I find where I would prefer to settle down. A mortgage payment won't go up by $400/month because of a greedy landlord.

Dan
02-28-2007, 10:33 AM
And, a big thing is to set up your mortgage payments to be bi-weekly instead of monthly. Your home can be paid off 3 years faster that way.

I checked that out about bi-weekly payment and to me its a bit of a trick.
If you have a 25 year mortgage and pay biweekly (you pay an extra payment every month) then you pay off the mortgage in 22 years.
But if you take out a 22 year mortgage and pay monthly, you will be paying the exact same amount.(maybe even less)

Not sure why banks do that, but you can also negotiate a lower interest rate with a small term.

Theres a reason big banks are pulling in huge profits.

Okotokian
02-28-2007, 05:42 PM
IF you want a house now, get a house now. The market might go up, it might go down. You can never tell. But if you can handle the payments, get it. You are buying the lifestyle. The investment is incidental. Once I buy things, I NEVER check on the price later. It's only theoretical that you made or lost money. My house is paid for and supposedly worth over triple what I paid for it 16 years ago, but so what? That's only relevant if I'm going to sell it and move to a different market, which I'm not.

Jamie Hunt
02-28-2007, 06:33 PM
Actually OKO. Your increase in value can be put to good use if you find the proper investment.

Jamie

Grizzly Adams
02-28-2007, 09:42 PM
I remember the last time the oil boom went bust and the interest rates went to 25 %. You could buy a house for a dollar.:rollin Nothing to say it can't happen again, especially if Dion gets to be PM.
Grizz

Jamie Hunt
02-28-2007, 11:13 PM
Grizz, that’s the thing. Interest rates are not at 25% they are down in the low 5% range. That’s one big difference between now and then. One problem mentioned was that people wont be able to afford payments if rates rise when their term is over. Perhaps people need to look at longer terms. The reason the banks give better deals on lower rates is because they think rates will rise. But then the other argument is that a floating rate has always (in the average) saved people money... Lots of choices

Jamie

winged1
03-01-2007, 12:59 AM
weeky payments are a real saver, and an open floating rate over the last ten years has been the best rates. That may not hold true going forward, but with another drop in the inflation rate, I'll close mine with floating.

Edmonton is seeing some excellent value growth. If your not catching this upswing, you may not have another chance at one of the best investments going.

grandzillaa
03-01-2007, 02:57 AM
jrs a real fixer upper will cost you a crap load of money. My nephew is looking for a home in Hinton as he is a cement truck driver (big cement truck) and is being relocated to hinton. The houses he is looking at are near $400,000.00, of coarse they are not fixer upper but realistate is hard to fine that is within price range. But hey a 10 minute drive and he can start to hunt crown land. Now that he hauls cement to new oil/gas sites all over Drayton valley, Edson etc, and now Hinton he has found many, many places to hunt some real nice big game.

I wish you the best in your search for a dwelling place.

Dave some small towns near Edmonton, lets say up to an hour + away you may find a house for $225,000.00. Look towards Thorsby or Warburg. The above price is/was the cost for a new listed home in Thorsby about 2 weeks ago. 20mins from Pigeon Lake, 20+ mins from two AFGA lands, and about 30mins from two other AFGA lands....I said that in case you hunt, or have a boat.

Okotokian
03-01-2007, 11:02 AM
Nothing to say it can't happen again, especially if Dion gets to be PM.

Wow, I knew the Flames were gonna have to pony up a lot of cash when his next contract is due, but I didn't think they were going to have to go THAT far to keep him. :lol

Grizzly Adams
03-01-2007, 08:32 PM
Okay, so you drag out the term. In the beginning of the amortization you are paying almost all interest, so all you are really doing is paying more interest, while decreasing the amount of Principal paid.
by the time you get that sucker paid for, you'll be too old to enjoy the rest of your life.:rollin
No chance of high interestrates returning? I guess that's what todays home buyers are betting.
Grizz

Jamie Hunt
03-01-2007, 11:33 PM
Grizz, sure there is a chnace of high intrest rates returning. However in the hieght of the real estate market in the early 80"s intrest rates were above 15% and heading up. Right now they look fairly stable.

Jamie

Grizzly Adams
03-02-2007, 01:57 AM
Interest rates are in the hands of the Bankof Canada and indications are we may expect some rise in the rates, but I don't honestly believe they will go that high again. The real danger we face, as Albertans, is that twit Dion will slither into power and lay the equivalent of another National energy Policy on us in the name of Kyoto.
As someone who has done a little Real estate speculation in the past, I can say that the best way the average Joe can get ahead of the curve is to buy a property and improve it's value in excess of the Market appreciation rate. Love those Handyman Specials.
Grizz

Gunslinger257
10-26-2010, 09:24 PM
Although some sound advice is given here it poses the question would you do it the same if you could go back in time?:thinking-006:

Jamie
10-26-2010, 10:54 PM
Although some sound advice is given here it poses the question would you do it the same if you could go back in time?:thinking-006:

No change at all.
Buy what you can afford, stretch when you are young.

I spoke with a client yesterday who had bought near the top of the market. His value obviously dropped, and it came back. Presently he is sitting in a position of breaking even. Plenty of folks out there cant say the same thing.
Good advice (and listening to it) is priceless.

Even in a over heated market, there are smart buys out there. Today.. Even more.

Jamie

Grizzly Adams
10-27-2010, 08:05 AM
Although some sound advice is given here it poses the question would you do it the same if you could go back in time?:thinking-006:

Buy Something, somehow.:lol: It's what we did and once you have a stake in the market, you can't lose, in the long run. Ah, the good old days. Not likely to find this anymore, but when I worked for Jamie' s grandpa, the company gave it's employees a very real break, buying a home. We were able to buy a lot better house, in a better neighborhood, than we would otherwise have been able to and the increase in investment was significantly more, when we did sell.

Grizz

rugatika
10-27-2010, 09:22 AM
How much does a typical developer or contractor make on a spec home? Take an average 2000 sq ft twostory house in a new neighbourhood. Say 150 for the lot. How much does it cost the contractor to build the house, and how much profit does he take away?? Just curious.

Jamie
10-27-2010, 10:06 AM
Rug.

Now remember these numbers are for a custom home.

Mid to high end finish, Granite, finished on site Hardwood, covered deck, solid wood cabinets, 2 fireplaces, real stone, steam room, heated floors in the master, ECT ECT
2500 Sqft + a developed basement

It works out to $200 a foot.

As for your lot price, that is really dependant on your location.

Watch out for "Fake" SQFT. when these builders build out over the garage and advertise a 2000 SQFT home, all you end up with is a 1600 sqft home that has a large room over the garage. You will find the footprint of the home to be a more reliable measuring stick.
1600 sqft 2 story is considered a smallish home. That only gives you 800 Sqft on the main. Your rooms will be very small.

Jamie

The Elkster
10-27-2010, 01:00 PM
Extending bank terms doesn't serve the average home buyer any good whatsoever specially over the long term. Loosening terms to make housing affordable is a rediculous notion. It increases the payout time, increases the interest paid and all for what...so everyone can now pay more for the same house. That is exactly what happened in the US. Banks lent more dollars without valid justification and people took that extra money and drove up house prices then complained about how stupid prices were getting...well duhhhh. Also look at house prices in Europe if you want to see what generational mortgages do to market pricing. Yup you can afford that $500k house on 35 yr mortgage...dohhh but maybe not when the house price now quickly rises to $750K. Everyone has access to the same banking terms so relatively speaking a buyer doesn't gain anything when banks allow more debt for everyone. Sellers gain (higher asking price), banks gain (bigger interest) and realtors gain (bigger fees). Buyers lose (higher prices+more interest)! Sure you get in that house you've always wanted...and all may be well as long as the assumption of stagnant interest rates and stable employment keep going. If not then pushing the finances to get that house may blow up in your face.