First time buyer, what would you do?

[the-royal-mail]

I don't see the rush or the overwhelming need to buy a house in any hot, overpriced market today. If you are satisfied with your current living arrangement then I see no reason to change it. I suspect you work hard, long days and are tired by the time you get home. If so, why would you want to add on the burden of having to maintain a house? Remember the RE market feeds the RE industry from your long work days. Why pay for that? When you sell the house later on you'll also have to pay RE commissions.

Besides all that, there is no rush. There will always be houses available to buy. Now, next month, next year, 5 years, 10 years from now etc.

peterk makes some good points also. At this time, based on what little I know from your post I would say this is not a good financial decision. Just my opinion though. I could be completely wrong as you may be in a market that may stay strong due to oil and what peterk said. Ultimately it's your call.

[themortgageguy]

I don't see a rush to buy either.

A house is a lot of work to maintain and at your age I sure had better things to do with my time. It's also more expensive than renting. Buying a house just to buy a house is not a great idea. Assuming you don't need more room or have a significant other giving sometimes not so subtle nesting signals, I'd wait.

That being said even though real estate prices in your area may come down, its important to research the past history for fluctuations in price over the past years for Red Deer and decide from that what your risk is for being upside down in your purchase. As an earlier comment had noted not all geographies are the same. This is a good place to start:

http://www.crea.ca/statistics

You also need to do a gut check on your job security.

You're probably considering it now because of the interest rates that are available. Very tempting indeed. The key is to get a pre-approval for as long as possible. Although the big banks typically only provide 90 day pre-approvals for resale homes, for clients in your situation I get a pre-approval for 6 months. That gives you enough time to see what the market is doing AND holds a good rate for you AND guarantees the lowest rate in that 6 month period. If you don't use it no big deal it expires and can be renewed.

I'd also suggest you consider a rental property of 2 to four units if you really are going to buy. You live in one and the tenants pay the mortgage or a good portion of it. You already have roommates so you're tolerant of other people under a common roof. That way if the property doesn't appreciate you still have cash flow.

Rob

[Sampson]

Macro-wise, I'd bet on strong red deer real estate markets into the future. I see a big group wanting to move from growing Calgary and Edmonton as the sprawl gets out of hand and people opt to leave.

I don't see this happening at all.

People are settling outside of Calgary and Edmonton, but in the commuter towns. There are plenty of options around Calgary, where you can work in the city and live in the country. Towns like Airdrie, Chestemere, Okotoks are among the top 10 fastest growing communities in Canada. Why would people move to Red Deer? It neither has the employment and income of Edmonton nor Calgary, and is not a classic retirement community. Last I checked, Albertan's were buying properties in BC and on Vancouver Island. Check out Courtney-Comox's boome bust as it relates to Alberta's economy.

That being said, there are a lot of companies keeping staff in Red Deer and there is a big influx of migrant workers - I'm guessing they are out of Province though. If you were to buy, I suspect you would be able to find people to rent out portions or the entire house.

Financially, none of us have seen the numbers, none of us understand the housing situation in Red Deer, it is different from Vancouver and Toronto, so we can't comment on that market.

I think the question you really have to ask yourself is whether you will still be in Red Deer 5, 10 years from now. Any housing purchase without a minimum of 5 years to stay in the location is rushing it.

[Berubeland]

Where's Potato with his rent multiple answer...

Hmmm, ah yes right here. Kind of. Well there's a spreadsheet, it's free.

[realist]

Do you get along with your roommates? If your rent is that cheap and you like living there I would stick it out for a while and start saving a huge down payment. I am in a similar situation, our rent in Toronto is only $800/mth for me and my wife so the longer we wait the more we save for a down payment.