Your house went for how much? (UK only)

[Doramius]

The average house cost more in Calgary alberta then anywhere else in canada these days.

Wrong.
Calgary may be 4th or 5th in Canada for average house cost.

that sounds about right ..

parts of BC are #1 i think ... several out there over 15 million , ive seen as much as 35 million i can recall ..

then parts of ontario(several areas) and montreal ....


but these prices dont come close to NY prices ... though 15 million dont buy you much these days in NY .. at least here you get something

You're talking about Downstate though. NYC area. Wayne county, just across Lake Ontario has 4 bedroom homes with 2 1/2 baths and 2400sq. ft. of living space for about $130k-150k. Your property taxes are outrageous though, almost double to triple what I pay here. However, a house like the one listed above could even be on a 1 acre lot. 1acre here seems to have 3-4 homes on it. Also, homes in the northeast have basements. I miss the extra storage space. Here you have to add $500k to the cost of a 2000 sq. ft. home for having a basement.

[canadateck]

I just watched a show 2 days ago about the prices of house's and how much they have gone up number one was In Kanata Ont ,in the last 5 years have gone up 89% , but Calgary right now is number 1 for the average home, there are houses in Van and TO ,that cost more, The record house sale was in Vancover it went for 35 Million taxes every month 17,000$ the numbers may not be "right on" but are somwhere in there.

[BJ_M]

yea --i was talking about downtown NYC and on long island sound .. in that area ...

upper NY state is great area .. specially around 1000 area .. Tibbets Point on Lake Ontario to Morristown, NY

Adirondack region

[Doramius]

Great area. I went camping & skiing around there all the time. Upstate is much prettier generally. I remember taking a boat to Canada and it wasn't so bad getting in to Canada. We'd radio and there would be patrol boats watching that we make it to customs okay. On the way back, the US patrol pratoically searched your boat for customs in the middle of the lake. Of course that was around Nov. 2001, so that was understandable.

[Roundabout]

Like zzyzzx said, rising prices aren't a good thing. Keeps people out of the market, as first time buyers can't afford anything. Second problem, if you move, you have to pay more than yours sold for to get something better, unless you leave the area for someplace cheaper.

Back in the mid 90's the prices got so far ahead of what people could afford, and the market was bound to collapse eventually. Prices here in CA went down in the range of 40% on average. The catalyst was higher interest rates. The higher the rate goes, the more prices have to come down to make the same payment.

Rates here in the US have been low for several years now, supporting and causing higher prices to continue. It's somewhat like the stock market bubble, and while it may not 'pop' the way the market did, the prices are bound to come down when the interest rates go up.

Prices are ridiculous here in CA too, my house was brand new less than two years ago when I bought it for about $225k, now it's about $450k. Price has doubled in less than two years. That kind of price increase just can't be sustained, common sense and the law of economics will prevent it.

For example, if the price were $100k and it goes up 50% to $150k, it only has to come down 33% to be back to $100k. Therefore, a price correction of 40% is huge - and that was what happened in the last correction. This time, prices have risen even further and faster than in the last run-up. So the correction could be devastating to the US economy.

Here in CA, the problem is worse, because no one wants to move or sell, they lose their low tax rate (initiated by Proposition 13 back in 1978, which limits taxes to 1% of assessed value, with a no more than 2% increase in assessed value per year). Example: a $200k house has an assessment of $2000/year. The next year, it can't be assessed at more than $202k (2% increase). Therefore, the taxes only go up from $2000 to $2020, an increase of only $20 a year. So the longer you stay in the house, the less you pay, as a percentage of what the house is really worth on the open market. The house might be worth $400k now on the market, but you are only taxed at the $202k level. Brilliant, huh? Sounded good in 1978, but there was the law of unintended consequences that they never thought about.

The consequence of this is the lack of housing coming up for sale. No one wants to sell, because if they buy another home for $400k, their taxes would double over what they were paying on their $200k house. So there is an artificial shortage of homes available for sale here.

I keep hoping they'll scrap Prop 13 here in CA, but Ahhnold, our wonderful guv'nor, is afraid to mess with it. Too many people getting a free ride on taxes, on the backs of people that came here and bought at higher prices.

The bottom line, if you don't already live in California, don't move here - you'll get raped on property taxes!

[Doramius]

It's slowly moving east like that. It's hitting here in Vegas and Arizona. This used to be the place to go for low cost property. Businesses swarm out west to take advantage. Also, the lack of winter months lessened things like snow days, but now costs are shooting up. If a business needs to move in order to expand, they have to pay more for the new place. Costs of their products & services also go up. The only alternative is to move operations back east. If that happens, people are in really big trouble.

[Roundabout]

Yes, because Nevada and Arizona were the only places you could go outside of So.CA. that were affordable and still close to here.

Now, it's getting more expensive in those two places, so what's gonna happen?

Like you say, companies will start moving back east again, where the RE market is more afforable and the labor costs lower. The minimum wage in CA is $6.75/hr, higher than in most states. That, combined with the higher cost of real estate, has made this state less competitive (to say the least).

Again about the taxes, one other consequence of this policy here is what happens when prices start to go down instead of up: people demand (and must get) reassessments of the value of their property at the lower market price of the home.

Since the counties had budgeted for a certain amount of income based on rising values and tax revenue, when prices start to go down it plays holy hell with the budgets. They hire police, firemen, etc. based on certain budget projections, and when the money isn't there, they can't just raise property tax rates here like they can in other states to make up for the lost revenue. That's because of the Prop. 13 limitation on taxes, by law they cannot be more than the 1% of assessed value.

It was a real mess last time around, and Orange County wound up going bankrupt (how many remember that?). But people have short memories. Now the same thing is happening again, but on a larger scale.

My intention is to move from here before the s**t hits the fan this time. I'm probably going to sell this house and move back east. I've had enough of traffic, smog, earthquakes and high prices. The good weather just isn't worth it anymore. I'm sure I'm not alone.

/threadjack

[zzyzzx]

Of course you can always move to Scarborough. Your neighbor is 10 miles away, though. That could be a good thing, especially if he's the kind of guy who masturbates with the blinds open.

[Doramius]

I know values will stop, but a significant decrease in value is hard to come to. Usually what happens is people end up holding onto the property and renting it out through a 3rd party management company, and then move while that property is also listed on the market for sale. In time the property will eventually sell for a reasonable cost that's not really lower than some of the highest appraisals of it went for, but usually not for an increased price anywhere above what similar homes in the area are going for. A lot of the cost goes towards the value per square foot. What drives the value down is usually when someone does a quick sale and sells the home for $190k instead of $200k. THat person then decides to move out 2 years later and puts the house on the market for $195k where it sits for several months. The price is then reduced to $190k, where someone offers $180k. The person looking to move out agrees. Now you've lost $20k on a house that may have appraised at $205k 5+years earlier. However, value reduction of homes happens ever so slowly, unless there's a signifigant factor that causes people to want to move out immediately of fast. Often if there's only one local major business that closes down (IE: GM plants years ago). Environmental Disaster nearby (IE: towns that surrounded Lovel Canal in NY). There are also a few others to which a Ghost Town effect is created. Again, those instance are few and rare. But that doesn't mean they still can't or won't happen.