Sell now, or next year?

Hi Dan... I suspect that I will not be in a position to sell for at least a few months. Is it realistic to think if I hold onto it for another year that I would any further ahead?

That certainly is the billion dollar question, would you be further ahead a year from now if you were to hold onto any property? I suppose I would venture to say that there has to be a reason for everything… prices go up when demand goes up. We know that demand is at a five year low for this time of year, and that corresponds with the decline in population growth in our city. If we anticipated an influx of new Calgarians as we did in 2006, it would be a good bet that prices could potentially go up. I don't think anyone foresees such an event any time soon. I can tell you that at the beginning of this year I was involved with a few listings that were originally listed in 2008 when we had our first glut of inventory. The clients I had decided to hold off for almost two years in anticipation of selling for a higher price. I can tell you they sold well below what they originally had their home listed for then. One specific client originally listed for $509k in 2008 and were on the market for 188 days, lowered to $450k and no nibbles. In 2009 they listed again briefly for $465k.
They ended up renting the home out, and I can assure you the renter left the home in atrocious condition that cost them a lot of money to remediate. Would they have been better off getting the house off their plate back in 2008? I'd say it's safe to say in this particular example they would have had a lot less stress in their lives.

As I mentioned before, if you do anticipate waiting past 2010 you should put together a longer term plan, maybe three or four years minimum. If we lose 10% by the end of the year, why would prices increase in 2011? If gas and oil prices increase significantly, absolutely! Will it happen? If we have a massive influx of new citizens to Calgary, prices of real estate will most probably increase. Will significant population growth happen? Probably not - unless the oil and gas prices move up significantly. I believe we will see further drops in average and median sale prices by the end of this year. We will then probably have a period of flat growth where we will see prices remain steady for a significant period of time, then we will see slow, sustainable growth.

Also take into account that every year you do not sell your home, you should be decreasing the balance of your mortgage. That will certainly influence your bottom line when you do finally sell. You also need to analyze what your other options are. If you do not own a home, you will be paying someone else rent. That may not seem significant over the next 12 months, but in the long run, putting your rent toward paying down your own investment, in my opinion, is a much wiser decision.

If you are thinking of downsizing both your home and your monthly carrying costs your affordability is certainly an important consideration. You are right, there are some excellent opportunities in other areas of the city. For example, I have a beautiful property listed in Evanston for $369,900.

Assuming a Buyer puts down 20%, interest at 4.5%, amortization 25 years and it sells for full list price, monthly mortgage would be around $1,638. Assuming all the same for a house priced at $468k, mortgage payment would be around $2,072, a savings of around $434 per month. Also take into account taxes, utilities and insurance would all be lower, bringing your savings to over $500 per month.

When you are ready to sit down and discuss your options and your plans, I would be happy to do so.
All the best,
Dan