# Are condos starting to correct in my area?



## emperor (Jul 24, 2011)

I've been following real estate for awhile. I've been trying to wait for a correction and I'm wondering if it isn't starting to happen in my area. I signed up for a mailing list on 2 bedroom condos between 150-250K There is usually 70-90 listed a month but only 2-3 sell. I found that very odd, I thought with a population of 152K more places would be selling. 

I looked at this place

http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13792726

They wanted 220k In Nov, then 210k in Jan now it's down to 199k When I asked my agent about the building he said it was good and not many units have come up for sale in it. He said the last time this unit was for sale was 2009 and they paid 190k. So it looks like I can get this place for what they paid, which means they will lose money after agent fees.

It's odd because what I'm seeing and what is being told to me is different. Condos look dead to me, some have been on the market for over a year.

This is in Red Deer Alberta, here is the chart for houses.


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## Just a Guy (Mar 27, 2012)

If it's not selling for months, even after adjustments, then it's overpriced...probably a lot. Why not offer significantly less, like $150k and start negotiating from there?

Is this a house or a rental? I'm assuming house, because it's not a good deal as a rental.


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## emperor (Jul 24, 2011)

It would be a home. Do you think they just over paid for it originally, because they are selling it for pretty much what they bought it for and with all the fee's and stuff they will lose around 10-12K.. Does it also make sense for only 2-3 units out of 90 being sold a month. I'm fairly new to this, I always thought lots of units changing hands each month and prices always going up. I see very few units changing hands and the prices going down. I only saw one unit selling for more than asking price all the rest are 5-15K under asking price. This is normal though?


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## Just a Guy (Mar 27, 2012)

In real estate someone eventually is going to lose in an overpriced market. People get caught up in home ownership and pay too much...eventually it gets too far from reality and they are forced to sell at a loss or get it foreclosed on. The last 4 places I bought came in at under half of what the last people paid and just over half of what the city assessed it it at.

Just because others overpaid, doesn't mean you should as well. If you want to buy real estate, you need to pay the right price for it in the first place, in this market you need to ignore what others have paid. Not everyone makes wise choices. 

There are many reasons why some people are willing to sell at a loss, and some people even have their losses covered by companies paying for them to relocate.


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## OurBigFatWallet (Jan 20, 2014)

In my experience condos aren't as good of an investment compared to single family homes. Sure the maintenance is done by the mgt company but there is definitely a price to pay for it and some pay more than they should. Here in Calgary condo prices have been steady while single family homes have increased from last year


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## Just a Guy (Mar 27, 2012)

In my experience, condos are the last to increase and the first to fall...because they are less desirable. That being said, in an overheated market, everything goes up, as condos are all the new families can afford...heck, who'd ever have thought about buying a single apartment 20 years ago...now they are "starter condos". Should never have been anything other than rentals.


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## emperor (Jul 24, 2011)

Thanks for the replies, I'm a oil worker which means I might be gone for 1-2 months at a time. I can't leave a home empty that long. I need a condo and it can't be on ground level, wish I could get a home in the country. As for the condo I guess it's just business as usual, I thought maybe things were dropping.


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## Just a Guy (Mar 27, 2012)

Things have been dropping in Alberta. It usually starts off slow, with only a few places. The lack of sales is also a good indicator. Like I said, you usually see it first in condos.


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## martin15 (Feb 18, 2014)

emperor said:


> . Does it also make sense for only 2-3 units out of 90 being sold a month. I'm fairly new to this, I always thought lots of units changing hands each month and prices always going up. I see very few units changing hands and the prices going down. I only saw one unit selling for more than asking price all the rest are 5-15K under asking price. This is normal though?


The Toronto market makes the news too often.
So if people are buying for 7-8% under list, this is more 'normal'.

I would offer 20% under list and see how desperate they are to sell.
The worst they can say is 'no', you can always offer more. 

http://www.zerohedge.com/news/2014-02-12/did-canada-just-pop-its-housing-bubble


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## NotMe (Jan 10, 2011)

You're asking if the entire market in your area is starting to correct based on a very small sample size.

One overpriced to begin with house does not a market make, just as one sick patient does not mean you have an epidemic.


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## Just a Guy (Mar 27, 2012)

True, but I just had my realtor pull up all listings that sold for under $100k so I could appeal my tax assessment on my new purchases...something I've done for the last several years, I can tell you the number is growing from next to nothing in 2007 to hundreds today...my experiences are similar in other cities...

Now, the trend could turn at any point, but right now, the trend is gaining momentum.


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## Arshes76 (Jul 5, 2013)

The condo markets are turning everywhere, not just your area. I don't know much about red deer but smaller towns I think are going to be harder hit than cities when the re bubble pops. The areas just outside edmonton are definitely falling more Than edmonton. Are you currently renting? Is this an investment or personal residence u r looking for.


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## Taraz (Nov 24, 2013)

It's interesting to note that inventory is dropping (and prices have been slowly rising) in Edmonton. Calgary also has low inventory (and jumping prices), but obviously much of that is due to the flooding last year.

It seems odd that Red Deer would buck the trend, but I guess it isn't the same type of city...

Also, note that most of the CMHC restrictions have been tightened back up to their original (pre-boom) levels, though interest rates are still quite a bit lower than historical norms.


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## Cal (Jun 17, 2009)

I am always a little leary of condos and the associated condo fees, something to defintiely consider, as I didn't see the monthly fee posted in the listing.


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## peterk (May 16, 2010)

Fort Mac here. In my unprofessional assessment of watching MLS for the past 12 months, things are on the decline. Houses and condos alike it seems. 

There's a large condo complex in town (probably 400+ units, 2009 build) with 70-80 units for sale right now. 2 bedrooms and studios were listed for $430k and $270k about a year ago. Now there's a whole bunch up for $399k and $240k. I've seen single family homes listed for months, removed, then back up a couple months later at a lower price.

I'm definitely in no rush to get in this market.


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## Just a Guy (Mar 27, 2012)

I'm not in red deer either, I prefer larger cities, but I do notice that there are always a number of people who try to hold on to perceived value as the market tumbles out from under them...they list high, and it sits...as the value continues to erode. Eventually the banks step in, and the prices correct. There was one guy trying to sell a bachelor suite for more than a two bedroom we bought in the same building on the same floor...it's just silly.


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## emperor (Jul 24, 2011)

@ Cal I can't post the listing from my matrix but that's how I can compare prices long term and see which ones sold and for how much it also shows taxes and fees. The Taxes are $1,607 and Fees are $282.47 including heat.

I guess I'll just hold on and wait to see what happens, it seems like things might be going down.


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## Arshes76 (Jul 5, 2013)

Taraz said:


> It's interesting to note that inventory is dropping (and prices have been slowly rising) in Edmonton. Calgary also has low inventory (and jumping prices), but obviously much of that is due to the flooding last year.
> 
> It seems odd that Red Deer would buck the trend, but I guess it isn't the same type of city...
> 
> Also, note that most of the CMHC restrictions have been tightened back up to their original (pre-boom) levels, though interest rates are still quite a bit lower than historical norms.


I think Garth at Greaterfool.ca mentioned thats typical before the bubble pops. People pull it from sale, rent it out and relist in Spring, when there are more buyers or its the busy season. This spring we may really begin to see the market turn, it inventory really shoots up but sales pretty much stay the same.


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## Taraz (Nov 24, 2013)

Arshes76 said:


> I think Garth at Greaterfool.ca mentioned thats typical before the bubble pops. People pull it from sale, rent it out and relist in Spring, when there are more buyers or its the busy season. This spring we may really begin to see the market turn, it inventory really shoots up but sales pretty much stay the same.


I doubt Edmonton is going to do anything exciting (one way or another) this year. It's only slightly unaffordable wrt incomes, not insane like Vancouver or Toronto.


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## andrewf (Mar 1, 2010)

It's going to follow the oil price. If the price of oil starts to slide, RE in Alberta will be in trouble. With all the unconventional oil coming on line in the US (and soon the rest of the world), prices could well drop substantially.


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## sags (May 15, 2010)

I have noticed from shopping around........is that condo fees significantly lower the amount of mortgage a person can borrow.

A lower condo fee............means a person can buy a more expensive condo..........for the same monthly cost.


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## emperor (Jul 24, 2011)

I talked to my real estate agent today to tell him what I've noticed in the condo market. His response was that condos have never sold good and stay on the market for months and months, sometimes years..... So now I'm really confused LOL.


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## peterk (May 16, 2010)

Strange how he didn't offer up such information when you first told him you were shopping for a condo..........


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