tag:blogger.com,1999:blog-7588496932754350322.post5438708630666799076..comments2023-09-10T03:39:48.166-07:00Comments on Alberta Bubble: But we are different....Unknownnoreply@blogger.comBlogger222125tag:blogger.com,1999:blog-7588496932754350322.post-74649163337291371172007-11-16T09:09:00.000-08:002007-11-16T09:09:00.000-08:00Carioca - ah, thanks for clarifying. Appreciated :...Carioca - ah, thanks for clarifying. Appreciated :)Userhttps://www.blogger.com/profile/00143275025091977114noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-17085413110313465242007-11-16T08:55:00.000-08:002007-11-16T08:55:00.000-08:00Even Keel.......Good questions......!!Your down pa...Even Keel.......<BR/><BR/>Good questions......!!<BR/><BR/>Your down payment is part of the purchase price....therefore it is an expense. He got $120K back....$20K of which was his downpayment. You also lose the cost and use of money on a down payment. Something I did not bother factoring in.<BR/><BR/>I rent for $1,100....and I do not pay utilities or insurance. <BR/><BR/>He was married and lived in a 3 bedroom house....but had no need to as he had no kids. It is a rough comparison......and impossible for anyone to expect an accurate one as none of us have the data to do that.<BR/><BR/>If he would have kept it, he could have made more......but, as he rented instead, he could have easily also saved the equivalent to the increase in equity. Why do I say that ? The wife and I did just that. We chose not to buy in 2004....and we have $217K in the bank that was saved up from 2003 to today.<BR/><BR/>Who said I was bitter towards my friend ? We were just talking about RE today over beers.......there is no ill will. His example was just used to demonstrate the pitfalls of not running the numbers. Let's say I was off by $30K to approximate your statement about apples to apples......he would have broke even in that scenario. <BR/><BR/>People are running around Calgary saying "we made $XXX,XXX" when in fact, the reality is very much quite different. That is all....no agenda here except for a desire to see reality being broadcast. As opposed to the RE industry, the banks and the news media.Carioca Canuckhttps://www.blogger.com/profile/13560054096545858201noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-64970155726935726762007-11-16T08:32:00.000-08:002007-11-16T08:32:00.000-08:00To Westcanguy who said:"Really? Well make sure to ...To Westcanguy who said:<BR/><BR/>"Really? Well make sure to wave bye bye....and don't forget to tell them not to let the door hit them in the ass on the way out."<BR/><BR/>I work as a petroleum engineer and perform corporate reserve evaluations in Canada and the US, reservoir exploitation feasibility studies and risk analysis modelling. The average Albertan does not seem to understand the large cost pressures of working in Alberta, or the need for economies of scale to make Albertan O&G ventures successful. I cannot control the cost pressures facing these companies, but I can warn people of the inflationary risks (and now the consequences) that we are experiencing in Alberta.<BR/><BR/>Obviously, it is my direct benefit for these companies to continue operating here.Radley77https://www.blogger.com/profile/14825702358596382959noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-33749086243274191152007-11-16T07:18:00.000-08:002007-11-16T07:18:00.000-08:00And just to double-check, did he live in a 2 bedro...And just to double-check, did he live in a 2 bedroom place in Cedarbrae? Or in a house?<BR/><BR/>You have to compare apples to apples. You seem very biased. I don't trust people with an agenda.Userhttps://www.blogger.com/profile/00143275025091977114noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-53334201921249981792007-11-16T07:03:00.000-08:002007-11-16T07:03:00.000-08:00Carioca - also bear in mind he sold in 2004 - othe...Carioca - also bear in mind he sold in 2004 - otherwise had he sold this year, he would be sitting pretty on another $200-300k profit.<BR/><BR/>Either way, why are you so bitter towards your "friends" and make them feel bad?<BR/><BR/>It's like my friends that own a house laughing at me for renting. Classless.Userhttps://www.blogger.com/profile/00143275025091977114noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-84168243040530704552007-11-16T06:51:00.000-08:002007-11-16T06:51:00.000-08:00Since when is a downpayment an expense since you g...Since when is a downpayment an expense since you get it back when you sell the house?<BR/><BR/>I rent, and I still pay utilities and insurance (tenants)Userhttps://www.blogger.com/profile/00143275025091977114noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-8286330501709363872007-11-16T05:40:00.000-08:002007-11-16T05:40:00.000-08:00So let's do that.........He lived in Cedarbrae.......So let's do that.........<BR/><BR/>He lived in Cedarbrae.....the district next to mny parents....so I'll use their numbers as a comparison.....with adjustments for inflation.....<BR/><BR/>Insurance from 1994-1999....$3500<BR/>Insurance from 2000-2004....$4000<BR/>Taxes from 1994-1999........$6000<BR/>Taxes from 2000-2004........$7000<BR/>Utilities from 1994-1999...$18000<BR/>Utilitied from 200-2004....$24000<BR/>Down payment...............$20000<BR/>Net cost...................$82350<BR/><BR/>Divided by 120 months......$686.25<BR/><BR/>Add that to the $250 loss of equity and you have a cost of living of $936.25 per month...... <BR/><BR/>Now....I was a property manager during that time......it was my second job. A large 2 bedroom (he was married with no kids) would have coist him roughly $600 a month the first 5 years and $750 a month the last 5. Whiuch menas.....he could have saved $30K if he had rented.Carioca Canuckhttps://www.blogger.com/profile/13560054096545858201noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-5338388934200910762007-11-16T05:10:00.000-08:002007-11-16T05:10:00.000-08:00Westcanguy......OK....fair enough.....I forgot to ...Westcanguy......<BR/><BR/>OK....fair enough.....I forgot to mention his $20K down payamnet....property taxes....utilities...insurance.....loss of savings......etc.Carioca Canuckhttps://www.blogger.com/profile/13560054096545858201noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-13443347088535927362007-11-16T04:57:00.000-08:002007-11-16T04:57:00.000-08:00Petrel, all that shows is that we are a year or so...Petrel, all that shows is that we are a year or so behind the US, as if that weren't obvious.<BR/><BR/>Big runups in prices beyond affordability are an indication that prices are headed for a fall. Again, like you know where.<BR/><BR/>I also find it interesting that the article gives the impression that Calgary and Edmonton are still rising, when in fact they are falling and are now 10% or more below the peak.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-2510325181843451412007-11-16T04:40:00.000-08:002007-11-16T04:40:00.000-08:00Good morning Cassandra’s.The link below suggests t...Good morning Cassandra’s.<BR/><BR/>The link below suggests there may in fact be a pricing out of the Canadian market a group of nervous Nellie’s. May I suggest finding a nice place to rent as you will be there a long time.<BR/><BR/>http://tinyurl.com/37t882Stormy Petrelhttps://www.blogger.com/profile/15062050673244964353noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-31558437671745619692007-11-16T00:52:00.000-08:002007-11-16T00:52:00.000-08:00Here's a great article from FORTUNE magazine. Yes...Here's a great article from FORTUNE magazine. Yes, I know it's about the US housing market, but there are some <B>great</B> parts about <B>basic economics</B> and <B>fundamentals</B> that everyone needs to know. Especially those that have blinders on with regards to the Alberta housing market and believing all the marketing hype.<BR/><BR/>There are lots of common-sense things that many on this blog have been trying to explain for months, but some people just don't get it (or don't want to). It's more proof that the so-called "experts" are LYING to make a buck off at the expense of the average Joe.<BR/><BR/>Here are some of my favorite parts:<BR/><BR/>"Over long periods housing, like stocks and bonds, follows a set of economic fundamentals. No matter how far prices get unhinged in a speculative craze - and we've just witnessed a blowout - those basic forces eventually regain their grip."<BR/><BR/>"But once the fervor fades, prices must fall to restore their normal, long-term relationship with rents. Rents exercise a kind of inevitable gravitational pull on prices."<BR/><BR/>"The cheap and easy money is gone, but the inflated prices it created are still here. No other factor was as important in driving the price-to-rent ratio to its current, unsustainable heights."<BR/><BR/>"It's in the boom towns that the correction will be both fastest and deepest. "<BR/><BR/>"Now investors are throwing their unoccupied homes and condos on the market. To make matters worse, developers kept putting up houses at a breakneck pace well into 2006 (replace 2007 for Alberta)."<BR/><BR/>FORTUNE Magazine<BR/>By Shawn Tully, Fortune editor-at-large<BR/>November 7 2007: 11:47 AM EST<BR/>Article: <A HREF="http://tinyurl.com/3yj3la" REL="nofollow">Real estate: Buy, sell, or hold?</A><BR/><BR/>P.S. This is mandatory reading for the masses, especially those who say "it's a good time to buy" or "prices always go up".datamagehttps://www.blogger.com/profile/15942864585996875308noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-75940598507166915412007-11-15T22:54:00.000-08:002007-11-15T22:54:00.000-08:00ryan said This one should get the award for the be...ryan said <I>This one should get the award for the best contribution out of the 206 comments so far. Way to leave personal opinion at the door and post anything meaningful.<BR/><BR/>Squid proved right again.</I><BR/><BR/>ryan, in all sincerity, i don't understand what you're saying here. could you try again?world class cityhttps://www.blogger.com/profile/18219495036128988217noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-49289514493318294792007-11-15T22:51:00.000-08:002007-11-15T22:51:00.000-08:00Sorry, here's the real reason: Dallas has never ha...<I>Sorry, here's the real reason: Dallas has never had the Olympics!</I><BR/><BR/>It's the mountains ... Vancouver and Calgary have 'em, Dallas doesn't.<BR/><BR/>And don't forget the "world class city" argument. Heck, we must be a world-class city or our houses wouldn't be so expensive. I rest my case!<BR/><BR/>Do they have a world class speedskating oval? Do they know what speedskating is?<BR/><BR/>What about skiing?<BR/><BR/>Do they have a world-class event like the Calgary Stampede? <BR/><BR/>Do they know what hockey is (for real?) or do they like to watch . We have the "Battle of/for Alberta". Is there a battle for Texas? No, 'cuz they only have one NHL hockey team!<BR/><BR/>Lots of reasons houses are cheap down there. Heck, it doesn't even snow in Texas!world class cityhttps://www.blogger.com/profile/18219495036128988217noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-56155802042791571852007-11-15T22:28:00.000-08:002007-11-15T22:28:00.000-08:00Man are houses cheap in Dallas.....I spent a day t...<I>Man are houses cheap in Dallas.....I spent a day there and read local for sale ads.</I><BR/><BR/>Yeah but Texas doesn't have any oil and they're not running out of land like Alberta and... um just a minute...<BR/><BR/>Sorry, here's the real reason: <B>Dallas has never had the Olympics!</B>patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-8141723219451702822007-11-15T21:30:00.001-08:002007-11-15T21:30:00.001-08:00"Really? Well make sure to wave bye bye....and don..."Really? Well make sure to wave bye bye....and don't forget to tell them not to let the door hit them in the ass on the way out."<BR/><BR/>This one should get the award for the best contribution out of the 206 comments so far. Way to leave personal opinion at the door and post anything meaningful.<BR/><BR/>Squid proved right again.Ryanhttps://www.blogger.com/profile/01468981938353862126noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-73608784249624439812007-11-15T21:30:00.000-08:002007-11-15T21:30:00.000-08:00This comment has been removed by the author.Ryanhttps://www.blogger.com/profile/01468981938353862126noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-83095671698499343102007-11-15T21:27:00.000-08:002007-11-15T21:27:00.000-08:00westcanguy/radley77,How about some actual math to ...westcanguy/radley77,<BR/><BR/>How about some actual math to prove/disprove your statements(and please don't forget inflation in your calculations). I'd like to see how both of you come up with your numbers.Ryanhttps://www.blogger.com/profile/01468981938353862126noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-36513160304311388852007-11-15T21:05:00.000-08:002007-11-15T21:05:00.000-08:00Radley77 said... Yet another O&G producer cutting ...Radley77 said... <BR/>Yet another O&G producer cutting back on investment in Alberta due to the royalty review:<BR/><BR/>Read Storm Exploration's Q3 2007 report here:<BR/>http://tinyurl.com/2j65oy<BR/><BR/>"Given that we can choose where to put our capital at risk, we plan to redirect our capital investment into other regions where our netback will be high enough to generate an acceptable rate of return. In 2008, this is expected to result in the drilling of three to five wells instead of as many as 14 wells originally planned in Alberta<BR/><BR/>Really? Well make sure to wave bye bye....and don't forget to tell them not to let the door hit them in the ass on the way out.<BR/><BR/>Canuck, I enjoy your posts but I disagree with your comments about your friend selling his home and being upside down 30k when you look at his profit against what it cost him.<BR/>The way I look at it, with the return he got on the sale, it cost him 250.00 a month to live in that house over the last 10 years plus of course any upkeep expenses etc..Can you say you're paying 250.00 a month in rent?westcanguyhttps://www.blogger.com/profile/08612967190922613724noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-5501134148359406192007-11-15T16:31:00.000-08:002007-11-15T16:31:00.000-08:00Yet another O&G producer cutting back on investmen...Yet another O&G producer cutting back on investment in Alberta due to the royalty review:<BR/><BR/>Read Storm Exploration's Q3 2007 report here:<BR/>http://tinyurl.com/2j65oy<BR/><BR/>"Given that we can choose where to put our capital at risk, we plan to redirect our capital investment into other regions where our netback will be high enough to generate an acceptable rate of return. In 2008, this is expected to result in the drilling of three to five wells instead of as many as 14 wells originally planned in Alberta."Radley77https://www.blogger.com/profile/14825702358596382959noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-34374301899928449712007-11-15T16:30:00.000-08:002007-11-15T16:30:00.000-08:00This comment has been removed by the author.Radley77https://www.blogger.com/profile/14825702358596382959noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-11555629943496410062007-11-15T14:25:00.000-08:002007-11-15T14:25:00.000-08:00Or to look at it another way.........let's try and...Or to look at it another way.........let's try and see how it will affect household budgets with the corresponding defaults.<BR/><BR/>A $400,000 morgage over a 39 year amortization is used in this scenario, to duplicate a situation in which a CMHC insured mortgage was granted 12 months ago. How many people in Calgary is that ? 17,000 or so........???<BR/><BR/>6.0%.....$ 2194<BR/>6.5%.....$ 2330<BR/>7.0%.....$ 2468<BR/>7.5%.....$ 2609<BR/>8.0%.....$ 2752<BR/><BR/>Historical mortgage rates per the Bank of Canada website were 5.9% in November 2006......a 5 year term can run you 7.5% today depending upon credit and the institution.......<BR/><BR/>Where is the extra "pretax" $12,0000 a year going to come from for most families already stetched to the limits today ?Carioca Canuckhttps://www.blogger.com/profile/13560054096545858201noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-64471317294052143382007-11-15T12:11:00.000-08:002007-11-15T12:11:00.000-08:00Anybody looked at mortgage rates lately? They've c...Anybody looked at mortgage rates lately? They've clocked upwards a good 50 basis points over the past month or so. That's definitely going to take a bite out of those interest-only mortgage folk. Assuming 5.43%/5.79% = 94%, it will take about a 6% bite into the purchase price of a home in one month alone. Considering house prices are already greatly limited by affordability, as interest rates continue the upward march due to the credit crunch, house prices will likely fall by a proportional amount.<BR/><BR/>For people with a short investment horizon, or are unhappy with the rental yield rate, it would be smart for people to sell now as a hedge against interest rate increases.Radley77https://www.blogger.com/profile/14825702358596382959noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-60303008368147156632007-11-15T12:10:00.000-08:002007-11-15T12:10:00.000-08:00This comment has been removed by the author.Radley77https://www.blogger.com/profile/14825702358596382959noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-91690407906054850042007-11-15T12:02:00.000-08:002007-11-15T12:02:00.000-08:00This comment has been removed by the author.Radley77https://www.blogger.com/profile/14825702358596382959noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-20143929731271766852007-11-15T07:37:00.000-08:002007-11-15T07:37:00.000-08:00"We are different"............Gloria, you could no..."We are different"............Gloria, you could not have chosen a more apt heading for this thread.<BR/><BR/>In today's Calgary Herald on page E3 there is a headline "Canadian Banks face $1 Billion reduction"......<BR/><BR/>Apaprently the commercial paper crisis is going to now cost the BMO and National Bank $1 Billion of losses.....and if you add this to the $787 Million of losses reported last week by other Canadian banks.......we have a nice tidy sum.<BR/><BR/>"We are different" eh ?????Carioca Canuckhttps://www.blogger.com/profile/13560054096545858201noreply@blogger.com