tag:blogger.com,1999:blog-7588496932754350322.post6076967648934956905..comments2023-09-10T03:39:48.166-07:00Comments on Alberta Bubble: Some Thoughts for SundayUnknownnoreply@blogger.comBlogger10125tag:blogger.com,1999:blog-7588496932754350322.post-27195197816265800012007-04-16T20:29:00.000-07:002007-04-16T20:29:00.000-07:00"The best and most current example of the delayed ..."The best and most current example of the delayed inflationary affect on rent in manhattan. As prices flattened out last year after an extremely steep climb, rents SKYROCKETED in 2006- in some cases up to 20% as demand for rental housing rose and prices plateaued."<BR/><BR/>May be true in Manhattan, not so true in other bubble markets. In Miami, Pheonix, San Diego, Las Vegas, and Boston, the new supply of specuvestor condos has led to a glut of shadow rentals. This has caused prices to stagnate and/or drop. <BR/><BR/> I have to say that Manhattan is a different animal which cannot reasonably be compared to a city like Calgary or Edmonton.RJThttps://www.blogger.com/profile/16895839672897312060noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-83915568338571987742007-04-16T19:29:00.000-07:002007-04-16T19:29:00.000-07:00albertabull,It doesn't matter whether the rental s...albertabull,<BR/><BR/>It doesn't matter whether the rental stock comes from new rental construction or specuvestors. All that matters is supply and demand. It could be argued that total housing construction is not enough to keep up with demand - rental or otherwise. The speculators carrying costs or wished rent is not equal to market rent.<BR/>___________________________________<BR/>I agree supply/demand is the final arbiter of prices HOWEVER:<BR/><BR/>1. A baker passes on his cost of dough in the price of his bread<BR/><BR/>2. Spec landlords will collectively be stickier with their prices due to their higher capital costs on new builds and the inflated acquisition costs on conversions<BR/><BR/>3. in even the weakest rental markets l-lord's are loathe to LOWER rents- instead you find INCENTIVES (ie free rent/parking/appliances/etc.) which typically contribute to a flattening as opposed to a softening of rental rates.<BR/><BR/>The best and most current example of the delayed inflationary affect on rent in manhattan. As prices flattened out last year after an extremely steep climb, rents SKYROCKETED in 2006- in some cases up to 20% as demand for rental housing rose and prices plateaued.<BR/><BR/>I'm not offering any assurances of rental appreciation however if other markets are any indication the trend is for flattening real estate prices are spiking rents in a post-boom environment.<BR/><BR/>personally I believe that calgary has a good 24 months+ to go before the price flattening occurs simply b/c the new supply does not appear to be keeping pace with the demand for housing.Unitzhttps://www.blogger.com/profile/00764376545247361117noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-39279443914942193822007-04-16T18:18:00.000-07:002007-04-16T18:18:00.000-07:00albertabull,It doesn't matter whether the rental s...albertabull,<BR/><BR/>It doesn't matter whether the rental stock comes from new rental construction or specuvestors. All that matters is supply and demand. It could be argued that total housing construction is not enough to keep up with demand - rental or otherwise. The speculators carrying costs or wished rent is not equal to market rent.BearClawhttps://www.blogger.com/profile/15714953167582532109noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-69937530106338527102007-04-16T15:06:00.000-07:002007-04-16T15:06:00.000-07:00I actually know a call girl. I rented from her a f...I actually know a call girl. I rented from her a few years ago in Kensington/Sunnyside. Many of them can make over 250k a year tax free. She told me that there are about two dozen that bought real estate with that money in calgary just before things started to heat up. The one I know owns 4 houses and the others she said own more each. She is also from a wealthy family. <BR/><BR/>Too bad I can't bring myself to manwhore. Nobody asks questions when you put down 50% on a house. <BR/><BR/>I also hope that rentals increase like crazy in the near future. I know the university kids will be screwed come fall.I actually like Lethbridgehttps://www.blogger.com/profile/02431895836480603524noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-29770623164243688222007-04-16T12:29:00.000-07:002007-04-16T12:29:00.000-07:00Hello FriendsToday CBC reports that the red-hot oi...Hello Friends<BR/><BR/>Today CBC reports that the red-hot oil sands economy has attracted Alberta prostitutes that follow the money.<BR/>I wonder if this lofty earnings sub set of laborers will make an impact on high end R/E in Edmonton?Stormy Petrelhttps://www.blogger.com/profile/15062050673244964353noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-62932511873791780382007-04-16T08:29:00.000-07:002007-04-16T08:29:00.000-07:00>>Or to put it another way, the rental yield is to...>>Or to put it another way, the rental yield is too low, which is another way of saying that prices are in a bubble.<<<BR/><BR/>Not quite. There has always been a premium attached to ownership v. rental due to the many intangible benefits associated with owning:<BR/><BR/>1. Tenure of residency<BR/>2. Ability to make improvements<BR/>3. Ability to make repairs<BR/>4. Pride of ownership<BR/><BR/>Collectively these factors have historically resulted in a premium price. <BR/><BR/>As far as the speculators go, to the extent that there are a big factor in the rental landscape their asking rents will vastly exceed the current asking rents on the existing rental stock and the result will be significantly HIGHER rents for all concerned. <BR/>3.Unitzhttps://www.blogger.com/profile/00764376545247361117noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-51253809071671087732007-04-16T06:10:00.000-07:002007-04-16T06:10:00.000-07:00There's a shortage of rentals because the alternat...<I>There's a shortage of rentals because the alternatives, condos, are far more profitable.</I><BR/><BR/>Or to put it another way, the rental yield is too low, which is another way of saying that prices are in a bubble.<BR/><BR/>But fear not. The developers may not by building anything to rent, but the speculators will be renting out plenty in due course. This is exactly what is happening in Vancouver, where no rental developments are being built either, but the supply of rentals is increasing - condos and basement suites. Why? Because housing stock is growing faster than households.<BR/><BR/>Housing bubbles are actually great for renters because they cause the housing stock to grow much faster than if prices were lower, which is what really matters. The own/rent boundary will be determined by market factors.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-81024063094421070432007-04-15T17:13:00.000-07:002007-04-15T17:13:00.000-07:00I was driving around town this weekend and caught ...I was driving around town this weekend and caught this relater's name on a bus bench. Perfect for this crazy market. www.filipchuk.com/Shanghaithunderhttps://www.blogger.com/profile/12488515677402784072noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-22847402772217703082007-04-15T13:40:00.000-07:002007-04-15T13:40:00.000-07:00anybody can drive a new car. It's called leasing/...anybody can drive a new car. It's called leasing/financing. Has little to do with wealth. <BR/>What drives the North American economy is middle class people pretending to be rich.<BR/>Welcome to the "how much a month" mentality.<BR/><BR/>With regards to rent control, it is usually a bad policy as it discourages new rental accomodation thereby exhasperating a bad situation. However, in Calgary they are not building any rental accomodation anyway without rent control, so it will basically make no difference. It's like putting a minimum wage below the "market" wage. It's meaningless.RJThttps://www.blogger.com/profile/16895839672897312060noreply@blogger.comtag:blogger.com,1999:blog-7588496932754350322.post-33237126472442530602007-04-15T08:09:00.000-07:002007-04-15T08:09:00.000-07:00There's a shortage of rentals because the alternat...There's a shortage of rentals because the alternatives, condos, are far more profitable. Condo conversions, record multi-family starts and lack of new rentals shows that the rental gap has not yet closed. If rent vs. own ratio does close it will cause a great deal of pain for renters and/or new homeowners. <BR/><BR/>New cars - well people are making good money here in Edmonton. I know its tired over-hype for the bears but it is true. Its probably a combination of good incomes, consumer confidence and the ATM. The ATM can be direct - take the money out then buy the car or probably more common indirect: Live beyond your means for a period of time then start fresh with a consolidated mortgage. Lower monthly payments but you are paying your credit cards and vehicle over 25 years.BearClawhttps://www.blogger.com/profile/15714953167582532109noreply@blogger.com