Monday, August 18, 2008

Upset Customers

From the Financial Post - Alberta leads national drop in home prices:
The situation has left brokers like Ken Shearer, of Edmonton-based Royal LePage Noralta, trying to explain the market to upset customers. "People who bought in the last 12 to 15 months are angry. I'm telling them we have an oversupply of listings inventory, the largest in history.

Why would people be angry?! What type of advice was the Edmonton Real Estate Association giving out last year?

In only the first three months of this year, average home prices have climbed 12.4 per cent, so Pratt has abandoned her earlier forecast of a 15 per cent increase for the full year.

"We're predicting that prices will continue to rise until August, at four to five per cent per month, then at two per cent per month," she said today.

April 4, 2007

Price increases may moderate slightly as the market returns to pre-boom levels but I do not anticipate that actual prices will decrease.”
May 2, 2007

Rising prices are forcing buyers to explore their housing options. People are being priced into the condo market,” said Pratt. “May figures demonstrate that the trend has not yet abated.” She urged both buyers and sellers to consult a REALTOR® before venturing into the market. “With the average price of a single family dwelling rising by over $400 a day, you need the latest market figures that only a REALTOR® can provide.”
June 4, 2007

I wasn't going to bring those quotes up again but decided to after hearing this ad from Marc Perras of the EREB.

It's sort of like driving around on fumes with your gas guage on empty just waiting for fuel prices to go down.

Marc Perras of the REALTORS Association of Edmonton

There are homebuyers waiting on the sidelines of the market anxiously waiting for housing prices to drop.

But there is nothing to suggest that a big drop is coming?

There is still a lot of inventory on the market but sellers have adjusted already. The near record number of sales in July suggests the market has really stabilized.

So there is not much ground to be gained by waiting?

The average price of a single family home fell 0.5% in July. If you consider that amount to an average month's rent...

..Then your sitting there paying rent waiting for prices to drop...

Then you are not gaining any ground. You are just missing out on all that selection.
...

First, if I was living under a bridge and had the cash available to buy a house then the gas analogy might make sense. But I'm not, so it's stupid.

If your rent is cheaper than the mortgage then you gain that difference plus the depreciation each month. I'm not even including if the furnace breaks down or city taxes.

6 comments:

BearClaw said...

And what about a downpayment? Are those older fashioned now?

They won't be starting October.

Carioca Canuck said...

Geez....have I said this before ?

Real estate is the only occupation where you have to be a bald faced liar in order to make a living.

Human trash.........all of them.

squidly77 said...

good one bearclaw..nothing is as unpalatable as eating ones words
they lied then lied some more and they will lie every month deceiving the people of all cities
they have absolutely zero morals
there lack of caring of families and all people alike is appalling
between the realtor boards the msm and the money industry (bankers) they will completely destroy our economy as they have in the US and the UK
the way that real estate boards use charities to promote themselves and will resort to joining church groups to drum up business is the reason i do not donate to charities or churches..and i suspect many people feel the same way

RJT said...

Haha.

Keep up these types of posts. Nothing is more frustrating than the MSM simply parroting the real-whore associations. They never check back to see last years "predictions".

Imagine what an honest article in the Herald or Journal would look like: "The CREB predicts a moderating of appreciation this year, so it's best to buy now before prices start rising rapidly again in the spring. Of course, the CREB is notoriously wrong with their predictions. For example, last year, they predicted a 20% increase in prices and prices actually dropped by 10%. Buyers that purchased their first home on CREB's advice are on average under water by $40,000, and are having trouble sleeping at night due to the excessive mortgage payments which are causing them to purchase groceries and fuel on credit cards, making only the minimum payment each month."

Not there yet said...

I started looking for a house in Feb '08. I noticed that asking prices had dropped slightly from Dec '07. At the end of March the Realtor said to buy now as prices would be going up during the spring bounce, buy now or never get this price again. I waited. By July the asking price for the houses I was intrested in dropped $60 - $100K.

Sure some I liked have sold but there is always another listed (not much originality in floor plans) just down the street.

I have seen some houses that were sold last year and are listed today on MLS. These houses sold for $100K+ above todays selling price but are listed with last years selling price as today's asking. Not only underwater by realtor fees but in need of a $100K haircut just to be competitive in today's market.

Today I can buy new, all in, for $30 - $100K less than the exact same house model being sold by a flipper. Does not seem logical to me.

Since I started looking in Feb, I have paid $7000 in rent. House selling prices have dropped $50 -$100K. My money saved $43 - $93K. I am sure I can put that money to use better than the house seller.

At this time there seems to be a flat spot in the price reductions. Time to buy? No, for me, I do not think so. Prices will continue to go down. There is a huge listed inventory. There are a lot of empty houses out there, not listed or for rent, they are waiting for the market to come back.

The only way to clear this glut of inventory is to drop prices. So I will continue to rent, and by the way the rent is less than the mortgage.

squidly77 said...

another mid-month emergency press release from ereb trying to quell the panic