Edmonton sellers slashing prices.

Looks like the boom has gone bust in Edmonton:

“There’s no sense reducing any product by 5% because it just doesn’t work. We’re seeing reductions of 10% and more,” he said.

Jon Hall, with the Edmonton Real Estate Board, said 85% of single family homes that sold over the past 30 days went for less than the asking price. On average, the final figure was nearly $12,000 less than the seller was seeking.

Condos didn’t fair much better, with 79% going for less than the asking price.

This is interesting because much like major US markets two years ago the market is dropping despite a very healthy economy.

Pratt said she’s also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper.

Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold.

“It seems like a lot of people are going home,” said Mackie, who’s based in Edmonton. “There’s no doubt about it, it’s a significant number.”

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TheVanMan
TheVanMan
13 years ago

sheepless in vancouver said:I agree with most of your points, but can't figure out the math. Wouldn't that depend on how much equity you have in the place? If it's 100% of market price and the market goes down 10%, wouldn't you lose 10%?Let's assume a $500,000 condo (the norm here in Vancouver). An investor puts in $100,000 cash towards the purchase and borrows $400,000 from the bank. In effect, he has about 20% equity in the home. When the market drops 10%, the condo is now worth $450,000. But you see, he DOES NOT OWN that $400,000 — the creditor does!The investor owns only the $100,000 of the $500,000 purchase. When he eventually sells it for $450,000, he would only get back $50,000 as opposed to his original $100,000, hence a 50% loss. People always talk about magnified gains… Read more »

Sheepless in Vancouv
Sheepless in Vancouv
13 years ago

thevanman said"I said it in the earlier posts that it only takes 10% reduction in RE price to wipe out 50% of your equity!"I agree with most of your points, but can't figure out the math. Wouldn't that depend on how much equity you have in the place? If it's 100% of market price and the market goes down 10%, wouldn't you lose 10%?I think a lot of people are buying second homes with the intention of selling their current one and moving into the second one. They're buying now and having renters pay the mortgage.A lot of the boomers I know (and I'm one myself) are planning to move into much cheaper accomodations when they retire so they can stretch their savings further. I think we're going to see a huge drop in consumer spending from this group. Many… Read more »

TheVanMan
TheVanMan
13 years ago

People were also more frugal back then than the Baby Boomers of today.Ok..I think it's fair to say that Baby Boomers were once savers. In fact, when people buy shelter, they enter into a forced savings program sponsored by a financial institution. That is their 1st instinct. By paying into the mortgage, you are inherently building up equity in the house. When you sell the house, you convert that equity back into cash. In an up market like right now, you sell.But you see, it's not that simple.In real estate terms, men always call shelter a "house". Whereas women call it a "home". Why the difference? Simply put, women have nesting instincts and treat a shelter area as a means to raise a family.When it comes to selling the "home", the best the men could hope for is the right… Read more »

patriotz
patriotz
13 years ago

The boomers are a selfish bunch, most will live 10 or 20 years beyond their financial means and will rely on their children to support them.Yes and what a shock when they find out that their children are even more selfish than them.The very large immigrant cohort which is coming to dominate voting in the big metros is also not sympathetic to Mr. and Ms. I Want it Now.No, they are not going to end up living in cardboard boxes, but they are going to find out what kind of lifestyle one can lead on CPP/OAS alone. That's all they're going to get from the rest of society, regardless of how much noise they make.

jesse
jesse
13 years ago

"The demand side is more flexible than that. "True. I guess all I am saying is that areas with more population growth have more building activity if permits are available. Densification is part of what happens as well. Mohican has some interesting stats if you're interested.

Patiently Waiting
Patiently Waiting
13 years ago

mk-kids, look at voter turnout by age group.I'm GenX, and all my life most people I've known in my age group have been practically proud to declare their apathy.And it seems like every generation under 60 is "spending like there's no tomorrow and not saving for retirement".

Jade East
Jade East
13 years ago

"We can't just blame the boomers though. GenX is horribly apathetic and self-involved." We not even the best at that.http://www.cbsnews.com/stories/2007/02/27/health/main2519593.shtml

mk-kids
mk-kids
13 years ago

"We can't just blame the boomers though. GenX is horribly apathetic and self-involved." Can you explain your comment about GenX patiently waiting? I'm curious how one comes to this conclusion… I realize we are sterotyping whole generations of people here and thats never a good idea but with respect to the babyboomers there's loads of evidence to support that they are spending like there's no tomorrow and not saving for retirement, etc… (actually just linked to a msn article on the friday-free-for-all thread). How do you measure apathy and self-involvement? What sort of info is there to support such a claim? Most of the GenX's I know don't fit that description at all so I'm curious…

Patiently Waiting
Patiently Waiting
13 years ago

We can't just blame the boomers though. GenX is horribly apathetic and self-involved. We are soon going to be baring more of the burden of maintaining our society and economy, so we need to start demanding proper compensation. Don't be afraid to ask for a raise (or seek a better employer) because there are lots of jobs out there.

Warren
Warren
13 years ago

I agree with mk-kids. They also represent a huge voting block, so they are likely to get what they want. Sad times for me.

mk-kids
mk-kids
13 years ago

"People think very one over 55 is filthy rich and that is just not true. They were the first generation of none savers and one day the chickens will come home to roost."Unfortunately it is the generation after the boomers that will pay, not the boomers themselves. The boomers are a selfish bunch, most will live 10 or 20 years beyond their financial means and will rely on their children to support them. They will also tax our public health care system & pension plan to extinction. I hope I'm wrong but the evidence seems to point that way…

HADENOUGH
HADENOUGH
13 years ago

"Unprecedented residential real estate sales across B.C. represents just the "the tip" of a retirement demand curve that will continue for years, according to the BCREA. " I would have to agree with Freako on this. However its a myth that retirees want to move elsewhere from their children.People here in Victoria think that retirees will keep real estate propped up even though most average famlies can't afford to buy anything. It is almost as if people suddenly decided to retire and retiring is something new. My parents retired 20 years ago and bought a condo in Arizona. Friends parents bough in Florida.Not everyone wants to buy in Victoria or wants to go to BC for that matter. Sure, some will, some will go elsewhere and many if not most will stay put and travel. People actually want to be… Read more »

patriotz
patriotz
13 years ago

there must be more dwellings than there are families to fill them or there would be homelessnessOh come now. The demand side is more flexible than that. Average household size grows with declining affordability. Grandma/Grandpa or kids move in with Mom and Dad, singles get roommates, etc.Extreme case is places like Ft. McMurray and Whistler. People go where the jobs are, not where the vacant housing is.

Patiently Waiting
Patiently Waiting
13 years ago

Vancouver has a huge labour shortage for entry level jobs. We should be attracting more people from around the country, and around the world. BUT they can't afford to live here on $12/hr.

markx
markx
13 years ago

Please note that this 1.3% population growth is at a time of roaring economy. Think about all the construction workers, and people who serve these construction workers, that come from rest of Canada, including Ontario, Quebec, Atlantic Canada. Basically provinces that haven't had a bubble yet.

markx
markx
13 years ago

Seems like this bubble is a Western Canada thing, now spreading to Saskatchewan. I'm in Montreal now, and it takes a while to get used to the lack of cranes. The only crane I found is for the expansion of Concordia University. Apparently if something burns down, it doesn't get rebuilt– the RE price in Montreal can't compete for material and labor, I guess. Shall I "snap up" some RE here in anticipation of the spread of bubble? The economy is mediocre, and apartment vacancy rate is high here. But maybe Uncle Bob would take a vacation here? "Be bold or move to Newfoundland"?Jokes aside, I think this bubble won't have much to go, if only for the completion of new construction. Hopefully I will return in 2009 to a better and saner Vancouver. After living in Montreal just for… Read more »

Richard
Richard
13 years ago

"SATV. Well said."Now that is what i'd call a contradiction in terms…

Jim
Jim
13 years ago

SATV. Well said. Remember only serious bear posters will be stroked.

satv
satv
13 years ago

JIM,do you have microscope at home,your place is THA BOMB I have melt my heart there so many times.how do you manage things here you might be a millionire,not less than 10.can't stop my self saying all this.if you like to share your biography……

Jim
Jim
13 years ago

"Unprecedented residential real estate sales across B.C. represents just the "the tip" of a retirement demand curve that will continue for years, according to the BCREA."I would have to agree with Freako on this. However its a myth that retirees want to move elsewhere from their children.

Warren
Warren
13 years ago

Make that "live in either place". Its early.

Warren
Warren
13 years ago

What's interesting to me about the Edomton story is that the air is coming out of the bubble while all the stars are still alignedI think here in Vancouver we think of Calgary and Edmonton as essentially the same city. Calgary is full of oil and corporate money (read: National head offices), and has a better climate (the odd chinook wind). Edmonton is essentially a place for oil workers to live, shop (giant mall), and where they get 6 hours of light in the winter.I would never leave in either place, but don't confuse them. When I saw that graph of Edmonton outpricing Toronto, I think they were challenging Vancouver for the title of "most overpriced in Canada". Now it looks like they lost. Go Vancouver!

scoop
scoop
13 years ago

GM to axe 1,000 Oshawa jobs"The crisis in the U.S. housing market was originally expected to be limited, but is now spreading from Wall Street to Main Street, George Magliano, director of North American automotive industry research for consulting firm Global Insight, said Wednesday.""Now that the crisis is damaging the broader economy, Mr. Magliano said, there are reports of auto companies tightening up on auto loans."Aren't you glad we live in Lotusland where these sorts of things don't affect us? And hey, how about them new Canucks jerseys?

misanthropic curmudg
misanthropic curmudg
13 years ago

looks like we are still seeing a decent number of people arriving from Asia, although it looks like YVR was a lot busier during the 90's. is it possible these people are tourists and business types traveling here on business… that maybe they don't have a suitcase full of money to buy yet another small shoebox apt in order to keep the party going?

jesse
jesse
13 years ago

"Or do you believe in 'build it and they will come'"No that's not what I meant: there must be more dwellings than there are families to fill them or there would be homelessness. If population grows by 20K per year minimum this requires about 7K more dwellings breaking ground today to fill next year's demand. This does not preclude overbuilding. Phoenix is a good example of where significant population growth (~4% YOY or so) can justify higher house inventories as % of total population but I think they got a bit carried away recently.