Edmonton Construction 13 (November 2015)

[SHOFEAR]

Originally Posted by mintzilla

^ I am shocked at how low the average price for condos is.
I wish some of the nice new condos were around that price... 350k for a 1 berm 55m^2 is outrageous!

I would love to have a unit in encore/ultima or it's peers but those prices are nuts

It's crazy what people pay for new buildings. screwed around a few nights ago looking at houses and looking for comparable units in the icons to see what our is worth. Getting caught up in the hype with a flashy new building and buying during "pre sales" was the biggest financial mistake I ever made. I've enjoyed living dt, but the financial hit I have taken on a property that has depreciated 10% or so compared to just buying a house that would have appreciated in value was stupid. It's realistically set me back over 100k. I guess it would have been money pissed away renting.

[McBoo]

On a completely different note, apparently, it's baaaaaack:

https://www.nytimes.com/2017/05/01/style...nyt-region&WT.nav=inside-nyt-region&_r=0

[rapid_business]

Originally Posted by SHOFEAR

It's crazy what people pay for new buildings. screwed around a few nights ago looking at houses and looking for comparable units in the icons to see what our is worth. Getting caught up in the hype with a flashy new building and buying during "pre sales" was the biggest financial mistake I ever made. I've enjoyed living dt, but the financial hit I have taken on a property that has depreciated 10% or so compared to just buying a house that would have appreciated in value was stupid. It's realistically set me back over 100k. I guess it would have been money pissed away renting.

Yeah, you bought at the peak of the condo market in Edmonton unfortunately. Prices have not really recovered since then for condos. There is a larger gap right now between new build and resale in some of the flashy new DT units and the existing stock. I imagine we see a slight move to parity in a couple years with existing stock prices moving up and new builds holding steady. At least the laws of supply and demand would say that should be the case.

[Mikemike]

^ The law of People are irrational and behave like magpies suggests that might not be the case. It's amazing to me the kind of premium that something like Legends can command.

[rapid_business]

Originally Posted by Mikemike

^ The law of People are irrational and behave like magpies suggests that might not be the case. It's amazing to me the kind of premium that something like Legends can command.

Indeed. Spoke to a couple we know in Hawaii last year who bought a unit there as a rental/investment unit. That is far from a cashflow positive property! They will be feeding it like no-tomorrow, and if they are expecting an appreciating asset based on the prices they paid, they better cross their fingers really hard.

[middeljohn]

Originally Posted by Coldrsx

Yup. Many home builders that I am speaking with are busy, no real spec, but lots of work. I think this might have to do with multiple players either focussing elsewhere or reducing supply which allows others to gain.

Would like to see them slow down on new builds for a while. It's hurting appreciation of existing stock.

[feepa]

Originally Posted by SHOFEAR

It's crazy what people pay for new buildings. screwed around a few nights ago looking at houses and looking for comparable units in the icons to see what our is worth. Getting caught up in the hype with a flashy new building and buying during "pre sales" was the biggest financial mistake I ever made. I've enjoyed living dt, but the financial hit I have taken on a property that has depreciated 10% or so compared to just buying a house that would have appreciated in value was stupid. It's realistically set me back over 100k. I guess it would have been money pissed away renting.

You haven't lost anything until you actually sell.

[kcantor]

Originally Posted by feepa

You haven't lost anything until you actually sell.

so how do feel about your bank loan to buy those bre-x shares you haven't sold yet?

[feepa]

unlike bre-x shares, the housing/condo market is more likely to recover. What I guess I'm trying to say is that unless you are planning on selling your property in the very short term, its a bit foolish to worry about a current dip in the market. Things will recover in time. FWIW, my house value has dipped by 5-10% since I bought it, but I'm not worried. I don't plan on selling it anytime shortly, and if I do, it will be 3-10 years or more, who knows what the market will be doing then?

[cyeg66]

Originally Posted by middeljohn

Would like to see them slow down on new builds for a while. It's hurting appreciation of existing stock.

Couldn't agree more. It's as though home builders are trying to squeeze each other out of the market, be the last man standing, etc. The number of home starts seems completely irrational. Slow the f+#k down!

[kcantor]

Originally Posted by feepa

unlike bre-x shares, the housing/condo market is more likely to recover. What I guess I'm trying to say is that unless you are planning on selling your property in the very short term, its a bit foolish to worry about a current dip in the market. Things will recover in time. FWIW, my house value has dipped by 5-10% since I bought it, but I'm not worried. I don't plan on selling it anytime shortly, and if I do, it will be 3-10 years or more, who knows what the market will be doing then?

the problem with housing is that while "things will recover in time", as much as it's perceived otherwise, housing is not the most liquid investment.

on top of that however, and possibly more important, not only is housing not as liquid as most people perceive it to be, it is a fixed and immobile asset. unlike the bre-x shares whose ownership is independent of location, if your employer moves you from here to toronto, you can't take the asset with you. if your circumstances change and the housing is no longer suitable (due to anything from kids at one end of the scale to strokes and dementia at the other), you won't have time for purchasers or for tenants to recover in their expectations or abilities to pay before you're forced to crystalize your loss.

from an investment perspective, housing is interesting and those that invest in housing (even as a place to own and live in rather than a place to rent) do so under circumstances that are quite unique. virtually every other investment tops out at 50% leverage and the capital gains on them are taxed. housing allows 90% leverage to those investing in them and the capital gains are tax free.

[kcantor]

Originally Posted by cyeg66

Couldn't agree more. It's as though home builders are trying to squeeze each other out of the market, be the last man standing, etc. The number of home starts seems completely irrational. Slow the f+#k down!

why? those builders are making their decisions based on the best of the options available to them. reduce margins and lower prices? adjust spec's to maintain deal flow? when the alternative is reducing your incoming cash flow to zero while still having to meet your fixed overhead including rent and equipment and keeping good office and field staff instead of having to lay them off, why would you think they're behaving irrationally?

and at the same time, if maintaining what you perceive as too many starts results in increased inventory (which is long-term, not short term) in the market and that increased inventory keeps housing at a more affordable level for both purchasers and tenants, from an overall market and economic perspective, why would you consider that a bad thing?

[rapid_business]

Originally Posted by kcantor

why? those builders are making their decisions based on the best of the options available to them. reduce margins and lower prices? adjust spec's to maintain deal flow? when the alternative is reducing your incoming cash flow to zero while still having to meet your fixed overhead including rent and equipment and keeping good office and field staff instead of having to lay them off, why would you think they're behaving irrationally?

and at the same time, if maintaining what you perceive as too many starts results in increased inventory (which is long-term, not short term) in the market and that increased inventory keeps housing at a more affordable level for both purchasers and tenants, from an overall market and economic perspective, why would you consider that a bad thing?

"because my home isn't appreciating as fast as it did x years ago"..../s

[Coldrsx]

Stantec and bike lanes.


https://twitter.com/IanOyeg

[Urban recluse]

The facade of the former Bay store would look much better with large windows rather than those small glass blocks.

[Kevin_foster]

Originally Posted by Urban recluse

The facade of the former Bay store would look much better with large windows rather than those small glass blocks.

It would also look better torn up and redone to bring any activity to that cavern.

[Landlocked]

Originally Posted by Urban recluse

The facade of the former Bay store would look much better with large windows rather than those small glass blocks.

As long as they don't touch the coat of arms and historic description under it, at the corner.

[cyeg66]

Originally Posted by rapid_business

"because my home isn't appreciating as fast as it did x years ago"..../s

On the contrary. Our house never appreciated, and circumstances were such that we *had to buy when the market had already realized its only true gains in '04-06. It would probably fetch 100k less than what we bought it (and put into it) for. Thank you for your concern, though. I'm not asking for appreciation, as though I jumped into the housing market to make money. It was to, how shall we say, house my family. To have bought when homes were at their most expensive, and interest rates (compared to subsequent years) were less than favorable, to find your house not worth 1c more 10 years later is unusual for a large city. Such has supply exceeded demand since the squeeze of the early 2000's. I'll stick with irrational, thx.

[s13]

^ would it really make a difference though if it did jump $200K in value. If it's to house your family, presumably if you did sell, anything you bought would also be up 200K in value if it were a comparable size. Yes more equity, but it's not exactly liquid value...

[cyeg66]

Originally Posted by s13

^ would it really make a difference though if it did jump $200K in value. If it's to house your family, presumably if you did sell, anything you bought would also be up 200K in value if it were a comparable size. Yes more equity, but it's not exactly liquid value...

I won't say you're wrong, but you're not exactly right, either. There's extenuating circumstances specific to my situation that I'm displeased about and I can go on but I'll just leave it there. The housing market wasn't kind to me like so many of my peers. No biggie. I'll live.