Bob Truman, First Place Realty

CM, comparing to that listing, Bob's listing should be priced about $435,000. Very close to my previous estimate of $443,000.

No view             +21,000
No green space +21,000
Basement unfin +15,000
Garage              -20,000
Sq ft                  -20,750
Net adjustment  +15,250
$419,900 + 15,250 = $435,150

It should sell within the average time that homes are on the market, if not sooner.

Garth Turner has made an absolute fool of himself when he published his "2020: New rule for the new age" back in 1999.

He actually predicted that the TSX would climb to 50,000pts. That's only one of his many flaws that were printed. That book now reads as a joke book.

Garth Turner merely reports on the real estate market woes, then puts his spin on it (to promote his current book sales of course) and feeds it to his blind legion of paranoid kool aid drinkers.

$ times I asked him to come out straight and at least acknowledge his shortcomings in his "2020" book. He never did. He also never published my posts on his blog....

Garth Turner objective? Apparently not.

The fact is that Garth does not know much...

Now, why do Calgary homes command so much money?

Hi Bob,

Yes, that's me.  I've always found Garth's blog to be interesting to read, mainly because of the comment section.

He's definitely changed his tune in the last couple of weeks.

I've also e-mailed you a couple of times, once regarding absorption rate by price range, a stat that I find very handy (and haven't seen anywhere else), and just the other day regarding that home builder in Calgary taking advantage of MLS as a marketing gimmick.

I think you also mentioned my personal site once, which contains links to the best calgary/alberta real estate blogs and sites.  A site that's down at the moment while I switch servers!

Can you send me that link again about the builder? Somehow I missed it. -Bob

The property will sell within 40 days between $415,000-$420,000.

Why?

1)Market is picking up but not "hot" just yet.

2)Do not expect to get 100% of asking price on this   market.

Hi Bob,

The link is: http://www.realtor.ca/PropertyDetails.aspx?PropertyID=8069341

I was just wondering what you thought about builders exploiting the MLS system like that.

Kind of degrades the integrity of it, if you ask me.

I know there's definitely been one complaint about it to the auditing department, but it's still there.

This reminds me of selling "tear-down" houses through MLS. It's not so common today, but a couple years ago, realtors would often put them on MLS for $10,000 or less. You get a house but no land. 

I'm not thrilled with it, but I wouldn't lose any sleep over it. Empty lots are frequently sold through MLS without complaints. Is it much different? My issue is that I dislike the way these sales skew the average prices. -Bob

"It should sell within the average time that homes are on the market, if not sooner."

What is the average time it takes to sell a house in Renfrew/Bridgeland/Cres Hts right now?

There have been 12 SFH homes sold in the past 30 days. Official DOM is 36, but 5 of the 12 homes have been re-listed. If you add in all the re-list days, the DOM is 114 days! One house was on the market for 456 days.

There are 80 active SFH listings in these communities. 6.7 month supply of homes. -Bob

It is different, at least to me, as a potential home buyer.

An empty lot is a physical space, with a defined address.  This builder is simply taking advantage of their showhome address to sell a product, with an undefined location.

When I search for properties in Hillhurst between $300k-$500k, guess what pops up?  This 'product', not a piece of a real estate.  It may as well be a Doritos advertisement.

If this is justified, why not allow Bob the window supplier to enter a 'property listing' for $10,000 (land not included, windows only)

Realtor.ca in general was a step backwards, and this is another one.

For what it's worth, here's the best deal we've seen in the inner city in the last 4 months: C3363011

Sold for $493k.  After two 'normal' price drops ($20k at a time) the seller dropped it by $80k to $499k and it sold that day.  

1800 sq ft, 80's house, beautifully updated on the inside (kitchen wasn't 'open' to the rest of the house, about the only drawback).

The areas we're tracking most closely are West Hillhurst, Hillhurst, Sunnyside, Rosedale, Crescent Heights.

This seller obviously wanted to get 'ahead of the curve' much like we did when we sold.  Will the market make him look foolish or smart in the months ahead?  Only one way to find out...

$429K+ for such a small home. Why do homes in Calgary cost so much?

In Edmonton, it would warrant $350K in a similar area.

In Ottawa it would cost less than $325K... and there's a ton of jobs there too.

This gotta be way beyond supply and demand. This market's in a huge denial.

Do banks actually loan out that much to buy so small?

I just don't get it any longer. Can someone please explain to me why buyers will pay that much for such a house? Especially that we ALL know now that the Alberta advantage has vanished a looong time ago and that groceries in Calgary cost the most in the whole country (minus the Arctic).

Please explain that those prices are sustainable long term and why?

Thanks.

Edna: On a long term basis, home prices in Calgary have averaged 20-25% more than Edmonton.

So your estimate of $350k sounds just right.

Now, as for why real estate in Alberta costs more than most of North America at the moment, I can't answer that, and only the crystal ball knows whether this will remain true down the road.

If our real estate growth in Calgary had kept chugging along at historical pace (approximately 5% per year) that $429k house would be worth about $300k max.  

But for whatever reason, we entered a bubble.  Based on fundamentals, there's certainly a possibility that house could be worth $300k again one day (and consequently, likely worth $240k in Edmonton)

I have to commend you Bob about getting feedback on these listings.  Yes, you are getting exposure but you may sometimes get things pointed out to you that you might not have thought of.  You are an expert but you are also human so these things can happen.  ..and it is very interesting getting other peoples' thoughts on these.  This might actually help you understand what people put their value into when they consider a house.  Pretty clever.

Any showings on that new listing? How many showings would you need in order to tell you that it's priced right? I've heard that a lot of listings in Calgary get no activity at all. I'd say this listing looks very competitive. It should sell for $405,000. Maybe 45 days.

Five showings in the first five days. That's reasonably good activity. -Bob

My guess would be 45 days for about 398,000.  I myself wouldn't buy it because it seems that all the period details have been renovated out of the house.  Why buy a house built in the 30's if it looks like it was built 5 years ago?

Kathy, do you think a small house built in the 1930's would have a lot of character and "period" details? I'm thinking that any prospective buyer would want the updates.

Bob, do you know what the original size of the house was?

It looks like it was around 700 sq ft before the addition was added. The main floor was expanded by about 200 sq ft and a second storey added another 400 sq ft.

Kathy's right, some people would prefer the "character" home features, but it's a small segment of the potential buyers. -Bob

"What do you think of this one C3361120 in West Hillhurst? Priced at $499,900. How does it compare to the one you liked? I know it's quite a bit smaller. I think it has the same lovely cabinets."

While we haven't been inside that one, it definitely looks to have a more updated floor plan than the one on 1 ave.  The fact that the kitchen wasn't open to the rest of the main floor was perhaps the only real negative we could find in the 1 ave house.

I think that the advantages that the 1 ave house had over this one are...

- There was a loft space on the top floor, which to us was a huge advantage, because I could use it as an office, and that frees up an extra bedroom.

- As you mentioned, it was a couple hundred sq ft bigger

- The basement, at least from what I can see in the pictures, was a lot bigger, and more conducive to my home theatre "man cave" plans :)  I can't really verify that though, just going from what I can see in the pics.

- And perhaps the biggest advantage of all, the location.  Our goal is to buy a home where we can walk to work from.  This definitely limits our range, and essentially anything west of 18th St may as well be in the suburbs to us.  

It's picky, I know, but we currently live less than 2.5km from work, and would like to keep it that way.  Biking is fine in the summer, but let's face it, a large percentage of the year is unbikable in Calgary.

There's also the fact that 1 ave is 'closed' on both ends, between 16th St and 18th st, which makes it a very nice street indeed, no through traffic.

So for us anyways, C3361120 would be worth less than $493k, but overall, I certainly think it's one of the best priced properties in the area, and I'm surprised it's still around really.

As for whether anyone should wait another year, well, if you're reading today's newspaper, the recession is over :)  

Weren't we supposed to have a whole bunch of new condo listings? Are they still coming? It looks like March month-end condo listings will barely be higher than they were at the end of Feb.

Good question. Condo inventory is down about 20% compared to last year at this time. Over the past 30 days, new condo listings are down 43% compared to 2008. There are a number of new developments which were expected to come on stream this year, producing an oversupply of new condos on the market.  Strangely enough, the inventory of new/unoccupied condos is way down from last year. -Bob

No more than 380K

The boom is over people, get it! Kiss boom prices goodbye.

There will be at least 10,000 oil patch jobs lost in Calgary next few months. Of which over 3,000 almost certain from Suncor/Petro-Canada merger.

I can see average house prices in Calgary ending year close to 300K.

If you want to know what job losses can make to the so called "REAL" Estate prices read this (http://ca.news.yahoo.com/s/capress/090324/national/windsor_home_prices). Houses in Windsor ON sell for $25K, cheaper than cars.

Bob,

I am wondering about your Absorption Rate table you listed.

I know MLS inventories are going down. But I am also seeing  glut in vacant for rent properties in rentfaster.ca, that pushed rents significantly down, and will have to push sale prices down to attract renters into buying.

How much of absorptions are actual sales versus, expirations, delisting, convert to rental, or try again later?

I can give you some data that may help. In the past 30 days, there were 691 de-lists. In the same period last year, when the absorption rate was trending higher, there were 1053 de-lists.

"Try again later:" I looked at the 66 de-lists from Feb 24-26 this year. 29 have already been re-listed.

There were 53 new listings yesterday of which 18 were re-lists.

We have no way of knowing from the MLS database which homes were converted to rental.

What conclusions can you draw from that? How much of the inventory is simply being re-cycled? -Bob

P.S. The above data applies to Single Family Homes only.

@The optimistic one

Your number is a little lower than what I expect for final Median price. Average Calgary price will be much higher.

In the stock market we would term these few months a "consolidation" within a downtrend. Caused by buyers who have been on the sidelines watching prices go higher past few years. The next few months Calgary should see a median oscillate between 370K and 385K. However, once the current pool of buyers soak up the quality inventory at today's prices, there will be a very sharp drop because what will be left is undesirable quality along with negative economic news caused by increased lay offs ( if the situation in the US doesn't get any better soon).

As you can tell from all recent the activity on this blog, ski season is over and I'm back at work.