False Certainty

This condo ad represents a low in marketing with a self-serving view on future appreciation. (emphasis mine).

When our prices return to 2007 levels (and the rebound is just starting)- your equity appreciation should be at least $25,000! This gain on your principal residence will be tax free.

It is troubling because the choice of words implies a certainty which has no basis. Not only is there a false certainty it also wrongly describes the current market as the 2009 rebound ended 8 months ago.

Fort McMurray: triple REIC filtered for your enjoyment

I am having trouble finding MLS stats for Fort McMurray. I suspect year over year sales are down but I can only find information heavily filtered by the Real Estate Industrial Complex.

The Edmonton Journal qualifies any downward indications with quotes from a local REALTOR.

'Seasonal slowdown' for home prices in Fort McMurray

"It's a seasonal slowdown, which is normal before Christmas," Milly Quark, president of the Fort McMurray Real Estate Board, said Wednesday.

Prices in this northern Alberta centre also dropped slightly in October 2006 -- then rose for 11 consecutive months. "Canada Mortgage and Housing Corporation is predicting a price increase next year," Quark said.

On the supply side, "land is at a premium," Quark said.

Building lots are selling for $345,000.

"I understand they are going quickly," she said.

Then there was another news item linking to some real estate investment site:

News Release

Capital appreciation is currently very high at around 20% pa meaning investors are faced with a wholly positive real estate outlook. Investing now will allow them to ride the wave of success that Ft. McMurray is enjoying and should guarantee very significant returns.

Executive Suites

Gross yields up to 26%
1-bed Apt (56sqm) = C$ 350,000 (~£176,768)

With average prices for SFH at $625K is it still reasonable to assume that the 20% yearly appreciation will continue? Is there an equilibrium price even with fast-paced oils sands development or do prices continue upwards?

Based on the price for this investment the gross yield is extreme. With a price of $350K the rent would need to be over $7500/month or $250/day for the stated 26% yield. Rents and even hotels rooms are far below under these amounts.

Still looking for monthly stats i stumble upon more advice

An Important Note for Fort Mcmurray Real Estate Buyers

Many times Fort Mcmurray Real Estate buyers avoid using the services of a REALTOR under the mistaken belief that it costs them money - or that they will be able to negotiate a better deal directly with the seller or seller's real estate Broker. This can be an expensive mistake when buying a home.

Are there any Fort McMurray stats published online? Just numbers.

Update: Thanks Laura for the link http://www.woodbuffalo.net/AboutCostHouse.html

Home or Lottery Ticket?

I took this in front of a condo conversion in March. Hopefully this stage of the real estate cycle has passed and one day people will buy condos and houses for the shelter they provide.

Foward Looking Statements

A Calgary REALTOR posted about what to expect in terms of appreciation:

A client recently asked me about the Royalty Review, the current flat and depreciating market, and why I think prices will continue to increase in Calgary.

Here's my response.

In 2006 prices increased 37%

In 2007 ... to date ... prices have increased 24%. (Isn't this amazing ... the media is only speaking about the drop in prices.)

In 2008 prices WILL increase 12 + %.

...

I am concerned about the certainty in the uppercase WILL and that this was directed to a client. Consider that the REALTOR gains a commission for persuading a buyer but loses nothing if the forward looking statement turns out to be incorrect.

Fun video (course language): Always Be Closing