Is it time to sell in Calgary?

[loriintaiwan]

I have 2 houses in Calgary, and I want to get started on real estate investing. Both of my houses have about $200K to $250K in equity. I was planning to sell at least one of the houses so that I could take the money and then invest in other markets, possibly in the US. I don`t know much about the investing systems as I`m in Taiwan and don`t have access to seminars and things like that. I will do that before I buy again, but in the meantime, I`m moving back to Canada in May and was planning to rehab at least one of my houses and sell it.

Question: Should I sell one or both houses with the current market situation in Calgary?

Another Question: Also, are there other or better ways to get my hands on my equity without having to sell?

I think the Calgary rental market is such that I could charge enough for positive cash flow, so should I consider getting my equity out and just renting?

Also, please note that I`m not in Canada now and haven`t been for 5 years, so I have no verifiable income.


Any advice would be appreciated.

Lori

 

[Brianrpaul98]

Hi Lori,

Firstly, I would inquire about becoming a member and the possibility to listen to the monthly meetings via cd`s etc. I was an expat as well and regret not doing this in my time abroad. This would add immensely to your Real Estate education. (If you are not doing so already)

There are good Realtors out there who can assist you with purchasing great properties that cash flow even though you are abroad, but having knowledge of the market will give you the confidence to make decisions.

As to your situation currently, it is hard to advise without more details. Are the houses cash flowing? If so, will they still be positive if you refinance? Area? etc.

Best reg,

 

[loriintaiwan]

QUOTE (Brianrpaul98 @ Mar 20 2008, 11:00 AM) Hi Lori,

Firstly, I would inquire about becoming a member and the possibility to listen to the monthly meetings via cd`s etc. I was an expat as well and regret not doing this in my time abroad. This would add immensely to your Real Estate education. (If you are not doing so already)

There are good Realtors out there who can assist you with purchasing great properties that cash flow even though you are abroad, but having knowledge of the market will give you the confidence to make decisions.

As to your situation currently, it is hard to advise without more details. Are the houses cash flowing? If so, will they still be positive if you refinance? Area? etc.

Best reg,

Hi Brian,

Thanks for the advice. I`m definitely going to join soon so I can get the cd`s. Also, I`ll be back in Canada in May and am looking forward to meeting other investors and getting started with my new life!

Lori

 

[UTCVenturesLtd]

QUOTE (loriintaiwan @ Mar 19 2008, 10:46 PM) I have 2 houses in Calgary, and I want to get started on real estate investing. Both of my houses have about $200K to $250K in equity. I was planning to sell at least one of the houses so that I could take the money and then invest in other markets, possibly in the US. I don`t know much about the investing systems as I`m in Taiwan and don`t have access to seminars and things like that. I will do that before I buy again, but in the meantime, I`m moving back to Canada in May and was planning to rehab at least one of my houses and sell it.

Question: Should I sell one or both houses with the current market situation in Calgary?

Another Question: Also, are there other or better ways to get my hands on my equity without having to sell?

I think the Calgary rental market is such that I could charge enough for positive cash flow, so should I consider getting my equity out and just renting?

Also, please note that I`m not in Canada now and haven`t been for 5 years, so I have no verifiable income.


Any advice would be appreciated.

Lori

The Calgary real estate market has backed off it`s peak prices and buyers have more to choose from finally. Calgary has a lot of growth happening as you will see cranes everywhere here. The city is currently moving fast on adding a new LRT (rapid transit) leg to the west now as well. The growth will still continue here.

To get your hands on your equity, get a line of credit on your house. I can give you the name of a mortgage broker. Live in one and rent the other out. I am also looking at buying my next property in the U.S., either Las Vegas or Phoenix.

Dean
[email protected]

 

[GrahamWhite]

Lori,

Calgary property is only going in one direction and that is up. It`s one of the most solid cities to own in so I would second the opinion of getting a line of credit or refinancing rather than selling.

 

[MONEY]

QUOTE (GrahamWhite @ Mar 21 2008, 01:29 PM) Lori,

Calgary property is only going in one direction and that is up.

And you have a reliable crystal ball to know this for sure?

How do you explain the drop of $50,000 from the summer of 2007 to now? That is a different direction than UP!

 

[TerryF]

Money,

You should compare March 08 with March 07. You will see it is higher this year than last. Prices never go evenly upwards. There are up/down cycles within any year. Spring is usually on the upswing, summer it starts to slow down, and by the end of the year some reversal is not unusual. To do a fair comparison year to year, you should look at the same month year over year. CREB always reports this statistic in their monthly reports and it IS up from last year.

As for crystal balls, look at the market fundamentals and you will see that Graham is right. Prices will go up, not down.


QUOTE (MONEY @ Mar 22 2008, 11:23 PM) And you have a reliable crystal ball to know this for sure?

How do you explain the drop of $50,000 from the summer of 2007 to now? That is a different direction than UP!

 

[MONEY]

QUOTE (TerryF @ Mar 22 2008, 10:52 PM) Money,

You should compare March 08 with March 07. You will see it is higher this year than last. Prices never go evenly upwards. There are up/down cycles within any year. Spring is usually on the upswing, summer it starts to slow down, and by the end of the year some reversal is not unusual. To do a fair comparison year to year, you should look at the same month year over year. CREB always reports this statistic in their monthly reports and it IS up from last year.

As for crystal balls, look at the market fundamentals and you will see that Graham is right. Prices will go up, not down.

MARCH 2007 Average Sale Price 479,914
MARCH 2008 Avg Sale Price, Last 30 Days $479,758

 

[MONEY]

Want to buy a totally renovated Calgary home listed UNDER Assessed value? Assessed @ $371,500. Asking $368,000

 

[JohnS]

QUOTE (MONEY @ Mar 23 2008, 01:14 AM) MARCH 2007 Average Sale Price 479,914
MARCH 2008 Avg Sale Price, Last 30 Days $479,758


That`s interesting. From February to February (the last complete months we have stats for), there was an increase of 5.2%, I think it was. But from March to part-way through March, they`re pretty much equal. So, a year ago, in one month, there was a 5% jump.

All that being said, I totally agree with the other people in this thread who say that Calgary is probably a keeper. (Only probably because it could change depending on your 5-year plan, your exit strategy, etc.) Looking at past stats can tell you a little, but only a little, and only about the past. Looking at the economic fundamentals (the in-migration, the money being poured into Alberta, the lack of debt, the housing affordability index, and many others) can tell you about the future.

Learn how to read the fundamentals, and you`ll probably come to the same conclusion. Calgary should do well in upcoming years. It`s not going to be a perfectly straight line upwards from now until 2013, and there will be dips here and there, but that`s how the markets stay healthy.

But hey - if you do come to a different conclusion, I`m sure there are lots of people here that would help you out by taking that property off your hands.....


Have a good one!

JohnS

 

[loriintaiwan]

I`m glad this topic has gotten a few people talking about the market. I`m very green in all of this, so you have all given me some important information about where to find useful statistics and other information, and also some great advice.

I have decided to just sell one house or possibly just try to get a line of credit off of it. If I can, then I`ll keep both houses. Thanks everyone!

I just want to say that the people in REIN are amazingly helpful and also very well-informed and knowledgeable. I`ve never seen a forum where people spend so much time trying to help others. I`m very glad I found this and am looking forward to becoming a member soon. This is a great "community".

Cheers everyone!

Lori

 

[MONEY]

QUOTE (JohnS @ Mar 22 2008, 11:41 PM) I`m sure there are lots of people here that would help you out by taking that property off your hands.....Have a good one!

JohnS

Here you go grab it fast, before the price GOES UP!

MLS: C3315206
Address: 1824 76 AV SE, Calgary
Price: 368,000

 

[MONEY]

Calgary Real Estate Board president Ed Jensen, now says Calgary prices are DROPPING.
Source: CTVCalgary

 

[RedlineBrett]

Quick!!! Sell everything!
First off you are in a local market where your closest competitors have been shooting for the moon and selling for over 10% below list.

Ogden/Lynwood is not a $350k+ community unless you are overlooking southland park. The realtors representing the last people to sell in this area know it - they gave them their chance to list high and go for it and then you see the big discounts when the offers don`t come in.

This is just a microcosm of what has plagued this market for the last few months - sellers with big equity not under real pressure to sell going for a price that they "would let it go for if they could get it" and then sitting on the market for eons because they don`t have a lot to lose. Many people want to profit-take after the latest run in prices (most so that they can trade-up as few people are moving away from here).

Prices can`t keep going up at 38%/yr forever. Most people are short term focused on their real estate decisions. They aren`t investors in it for the long haul they just want the best living dynamic for their family. So they sit and watch prices go up and don`t sell because they don`t really have to.

Then when they think prices have hit the peak they get itchy to use the increased equity to enhance their quality of life. Totally expected when nearly everyone in town has 100k+ in their property and wants a new pad.

Thing is they can`t all get it at the same time.

So we see press about `listings soaring` which soon leads to `prices dropping`. What`s the difference in a monthly payment on a $500k place when you have 200k in equity vs 220k? Not a lot - which is why sellers don`t care about lowering their price. They know they`ve made good money already - more than they ever expected to in such a short time. But 20k/200k is 10%. PRICES DROP 10%!!!! I bet a newspaper with that headline would sell their fair share of copies

What you are seeing happening is the market correcting itself for the last stages of the boom in which demand was being driven largely from consecutive increases of prices and unsophisticated buyers getting nervous of being left behind after watching them increase so sharply.

Now there are tonnes of listings and the shoe is on the other foot. Buyers that missed the last boom are watching prices fall and waiting for them to hit `rock bottom` before jumping in. Then a bunch will (because job creation is high and salaries are increasing) and prices will start to climb again and all the buyers on the sidelines will want to `get in before it goes up again`. Then we`ll have another run. And the ebb and flow of real estate continues.

QUOTE (MONEY @ Mar 28 2008, 11:50 PM) Calgary Real Estate Board president Ed Jensen, now says Calgary prices are DROPPING.
Source: CTVCalgary

 

[JerryCharlton]

Fun with numbers

On Tuesday Mar 25:

8667 active Calgary Residential MLS listings
2065 are vacant
868 are Tenant Occupied Listings
4922 Year to Date Sales


Yesterday Rentfaster had 1524 total rental ads and the Herald had 350

 

[joeiannuzzi]

QUOTE (RedlineBrett @ Mar 29 2008, 02:16 AM)
Quick!!! Sell everything!



First off you are in a local market where your closest competitors have been shooting for the moon and selling for over 10% below list.



Ogden/Lynwood is not a $350k+ community unless you are overlooking southland park. The realtors representing the last people to sell in this area know it - they gave them their chance to list high and go for it and then you see the big discounts when the offers don't come in.



This is just a microcosm of what has plagued this market for the last few months - sellers with big equity not under real pressure to sell going for a price that they "would let it go for if they could get it" and then sitting on the market for eons because they don't have a lot to lose. Many people want to profit-take after the latest run in prices (most so that they can trade-up as few people are moving away from here).



Prices can't keep going up at 38%/yr forever. Most people are short term focused on their real estate decisions. They aren't investors in it for the long haul they just want the best living dynamic for their family. So they sit and watch prices go up and don't sell because they don't really have to.



Then when they think prices have hit the peak they get itchy to use the increased equity to enhance their quality of life. Totally expected when nearly everyone in town has 100k+ in their property and wants a new pad.



Thing is they can't all get it at the same time.



So we see press about 'listings soaring' which soon leads to 'prices dropping'. What's the difference in a monthly payment on a $500k place when you have 200k in equity vs 220k? Not a lot - which is why sellers don't care about lowering their price. They know they've made good money already - more than they ever expected to in such a short time. But 20k/200k is 10%. PRICES DROP 10%!!!! I bet a newspaper with that headline would sell their fair share of copies

What you are seeing happening is the market correcting itself for the last stages of the boom in which demand was being driven largely from consecutive increases of prices and unsophisticated buyers getting nervous of being left behind after watching them increase so sharply.



Now there are tonnes of listings and the shoe is on the other foot. Buyers that missed the last boom are watching prices fall and waiting for them to hit 'rock bottom' before jumping in. Then a bunch will (because job creation is high and salaries are increasing) and prices will start to climb again and all the buyers on the sidelines will want to 'get in before it goes up again'. Then we'll have another run. And the ebb and flow of real estate continues.




Brett, I totally agree with every word you said!!

 

[TomB]

With MLS numbers like we are seeing and the headlines in the media, it`s tempting to think the party`s over and let`s get everybody out of the pool. But headlines aren`t long term fundamentals and that is what smart investors look at - fundamentals, not headlines. You hear it again and again - the boom is finished and the run is over, get out now. While uneducated, uninformed investors are listening to this doomsday scenario and tossing in the towel, the other investors (smart ones) are buying up their discards. Why? Because the fundamentals are great in Alberta and will continue to be great for a long time. If you doubt that, then do a little bit of digging and due diligence and see for yourself. You will then be able to ignore the headlines and the dips in the real estate cycles (like now) that scare the heck out of you, and make smart decisions. Just my two cents worth, folks.

 

[ChrisDavies]

If anyone still thinks the Calgary market is going to crater and wants to sell in a hurry, give me a call!

 

[MikeMcCrae]

Real estate is a long term game. In the long run there is only up.




QUOTE (MONEY @ Mar 22 2008, 11:23 PM)
And you have a reliable crystal ball to know this for sure?

How do you explain the drop of $50,000 from the summer of 2007 to now? That is a different direction than UP!

 

[MONEY]

QUOTE (MikeMcCrae @ Mar 30 2008, 07:42 PM)
Real estate is a long term game. In the long run there is only up.




Consider this: Euphoric Vancouverites, who invested near the height of the 1981 bubble, did not recover their original inflation-adjusted principal until 2006! Again, that`s inflation-adjusted; a dollar can buy a lot more Big Macs in 1981.



25 years is one hell of a "long run".