Prior to 2006, banks always required larger down payments for investment property (25-30%) and it would hurt my feelings to see those kinds of rules return though I doubt that speculation will be much of a problem over the next number of years.

Losing the 5% down program would be a big loss for first time buyers. I hope that they don’t do away with that. I believe it has been around since the mid 80′s and it has provided a multitude of buyers with an opportunity to achieve ownership.

No, I haven’t heard anything about new mortgage rules except some new disclosure rules for US mortgages, which were sorely needed anyway. It certainly sounds like it would put a big curb on speculation. Do you have any links or further info?

Primary residence 10% down

2nd property 30% down,not gov insured

3rd property 40% down, not gov insured

More mortgage rules are coming, but I am guessing there will be ideas being floated around.

“The bonds show Apollo’s equity in Realogy “has no value right now,” said Sabur Moini, a money manager in Los Angeles at Payden & Ragel, which oversees $50 billion in fixed-income securities. “If bonds are trading in the 50s or 60s, the market is saying that these guys are headed toward bankruptcy.”

Standard & Poor’s cut Realogy’s corporate credit rating to two grades yesterday to CC from CCC. S&P analysts also said yesterday, “Given our previously stated view that Realogy’s ability to service its current capital structure over the intermediate term will be challenged, we view the exchanges as being tantamount to default.”

Here’s an interesting story about the Realogy situation with some comments from the CEO. Sounds fairly serious.

http://tinyurl.com/realogy

George,

“And is it possible it mostly people already in the market buying homes (upgrading) with few entry level buyers that keeps the average price high?’

It’s kind of a tough one to wrap my head around but I expect that you’re correct about that. Share your thoughts please as I am still confused.

If I compare sales over the past 60 days to sales between Sept 15 and Nov 15 of 2007 here are some things I can see.

Condos, as a percentage of sales are just 20% this year compared to 24% last year.

In the past 60 days, 36% of properties sold were 1,000 square feet or smaller. For the same period last year, that size range garnered a 42% share.

Total sales over the past 60 days were an average size of 1,193 square feet. For the same period in ’07 the average size was 1,108 square feet.

Homes larger than 1,400 square feet have a 20% share over the past 60 days compared to a 16% share for the same period last year.

Cost per square foot was $247 for sales in the past 60 days, and just $225 (10% lower) per square foot the year before. Larger homes typically command a higher dollar on a cost per square foot basis. They tend to have more pricey options while your basic starter home has few.

I’m going to do a bit more digging here and compare some specific property types of various sizes to see if I can figure this out.

http://www.usnews.com/blogs/flowchart/2008/11/11/here-comes-a-bankruptcy-boom.html

If you’ve been saving your cash for fire sales at bankrupt retailers, don’t blow it all at Circuit City. Many other companies are likely to end up in even worse shape over the next year.

The share of corporate bonds in default over the past 12 months, which goes hand in hand with bankruptcies, has been about 3 percent, according to data compiled by Prof. Edward Altman of New York University’s Stern School of Business. That’s near the historical average. this time next year, the corporate default rate will be somewhere between 8.5 percent and 11.1 percent. That means there could be three to four times the number of corporate bankruptcies we’ve seen over the past year.

Norm,

“I still think that the averages are not telling the whole story. I’m seeing some properties sell below where they were at this time last year.”

Not that I want to add more work to your plate, but you have not had a list of notable sales recently. Would you continue this?

And is it possible it mostly people already in the market buying homes (upgrading) with few entry level buyers that keeps the average price high?

Thanks. That makes much more sense to me.

“we’re still up a healthy amount from where we were a year ago.”

Don’t forget that we had one of the largest year over year increase up until the middle of the year. To me, we appear to be falling faster than other parts of the country, but we’re coming off of a much larger increase. I still think that the averages are not telling the whole story. I’m seeing some properties sell below where they were at this time last year.

“I certainly expected them to do so based on what August looked like”

For us, units seem to be bouncing back and forth from one month to the next. It’s a string of downs, but some are worse than others. This past week was dismal for units but I think next week will be big.

“And now Norm is saying that it’s getting busy again”

I said my phone had been ringing a lot over the past week and that other agents were saying the same thing. Busy doesn’t necessarily mean business.

Maybe Saskatchewan really *is* The Place To Be this time around?

Plenty of bright spots in this province for sure. Looking forward to seeing the Q3 migration figures. I would still maintain that if 3,000 new people continue to move here every quarter that it has to bring inventory down. We all know there’s diddly for rent and what is available is expensive.

Saskatoon came late to the Canadian housing bubble party. Our peak was spring of this year. Calgary and Edmonton had their peak in the spring of 07. It does seem like Saskatoon is a year behind them. The slowdown has only really been here a few months, while there are many houses in Alberta that have been listed to close to a year.

Prices have only one way to go and that is down. How far, who knows. Even though our economy is forecasted to ride the economic storm farely well, I doubt prices will go up or even stay on par. Heck, even Dubai has seen price drops in real estate! If real estate prices all over the world are dropping, it is safe to say we will see price drops as well.

Having affordable priced houses is great for everybody. First time buyers, investors, renters all benefit will lower prices and the mortgage industry benefits with more sales and sustainable economic growth. There is quite abit to go down for the average family to afford the average house, for P/E to make sense to buy for investment, and for renters actually able to afford rental prices.

Dec 08 will probably end close to Dec 07 in prices, but the market will have less optimism for prices and sales heading into 09. Especially when you see comments like these ““We declared early this year that the housing boom was over, and these figures on the surface would suggest the bust has begun,” Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., said in an interview.”

“Nationally, the average price of a resale home in October fell the most, percentage-wise, since August, 1982, sinking 10 per cent from the year before to $281,133, the Canadian Real Estate Association (CREA) says. It was the fifth consecutive month with year-over-year price declines.

Unit sales fell by 27 per cent from October, 2007, declining sharply in every province except Newfoundland and Labrador and the Northwest Territories. Month-over-month sales fell by 14 per cent, the largest drop since June, 1994.”

This seems comprehensible: prices down 10% YOY, unit sales down 27% YOY, and 14% MOM.

Regardless of how you slice it … ouch.

As scary as these numbers are, though, I have to say that I’m Just Not Seeing That Here. Norm called me a ‘numbers guy’, which I am, and while we have come down about 10-15% from the peak in June… we’re still up a healthy amount from where we were a year ago, and things aren’t falling off a cliff.

I have to say… I thought things would be worse than they have been. That’s not to say that they still can’t go south on us — I certainly expected them to do so based on what August looked like — but they *haven’t been (that) bad*. And now Norm is saying that it’s getting busy again… Maybe Saskatchewan really *is* The Place To Be this time around?

I predicted that we’d end the year with the same avg. price as we started. Let’s see if that comes true.

Seems the story behind my link has been swapped out for another “real estate down” article so I can’t be sure. I’m pretty sure that the drop is 10% year-over-year. This looks like an error to me as the writer is contradicting herself between the three sentences you’ve quoted. Very weird story.

http://clearstation.etrade.com/cgi-bin/bbs?post_id=8878161

“The average sale price also declined, by 10 per cent in October from the same month the year before, to $281,133. It was the largest month-over-month decline since August 1982, when the average existing home sale price also fell by 10 per cent.

Using a weighted national average, prices fell by 5 per cent on a year-over-year basis on October.”

Home resales tumble 14%.

http://tinyurl.com/5pb5hk

Wasn’t this covered last week?

The C21 and Coldwell Banker brands certainly are well established. I wasn’t sure how this information would have an effect on the daily operations of the franchisees here, if at all, but you’ve helped clear it up.

LJ is right. Realogy does own the C21 and Coldwell Banker brands in Canada. Of course, they are a franchisor, so each office is independently owned. I believe that Conexus Credit Union own the franchise rights through Saskatchewan, at least in Saskatoon and Regina. Realogy is a spin off of Cendant and has only been operating since 2006. They may be in some trouble but the C21 and Coldwell Banker brands are both fairly well established in North America. They’ll be operating for a long time to come.

http://www.realogy.com/b2b/brokers_intl/franchises/

Value for Real Estate Brokers (International)

International Franchising Opportunities

Realogy is the world’s largest real estate brokerage franchisor with more than 16,000 franchised and company owned offices and approximately 300,000 sales associates operating under our franchised brands. Realogy’s brands are currently represented in approximately 92 countries around the world. If you are an innovative entrepreneur you can put this unrivaled brand power at your disposal with the purchase of a “master franchise” of one or more of the Realogy brands including the Better Homes and Gardens® Real Estate, Century 21®, Coldwell Banker®, Coldwell Banker Commercial®, ERA® and Sotheby’s International Realty® brand names.

To receive information on international master franchise opportunities call Global Services in the United States at 1-973-407-7438, or fill out our contact form available from the link on this page and you will be contacted shortly.

If you are interested in simply joining one of our existing master franchises, please contact that particular brand’s independently owned and operated company by using the appropriate brand website’s international office locator section.

Thank you for your interest in Realogy, the world’s largest real estate brokerage franchisor.

“Nov. 14 (Bloomberg) — Realogy Corp., owner of the Century 21 and Coldwell Banker brands, is at risk of violating the terms of its bank loans and is offering to exchange bonds at a discount for new debt.

Leon Black’s buyout firm Apollo Management LP, which bought Realogy for $6.6 billion in April 2007, is trying to reduce debt by almost $600 million and stave off default at the Parsippany, New Jersey-based real-estate broker, according to a regulatory filing dated yesterday.”

Is anyone aware is Realogy runs the Canadian operations of Century 21?

Other than calling the commodity boom we had in the spring a bubble, I am pretty positive about our province and I have posted tonnes of positive links about Sask. I was out of town yesterday.

To say that everything is fine everybody, either you are misleading people or don’t know what you are talking about. Lets see, the worldwide financial crisis created by the worldwide housing bubble and

credit bubble has led to the biggest part of the economy ( consumers) to be in serious financial shape. Real incomes have not risen, only leverage has expanded. Bank failures, auto industry trouble, millions of layoffs, central banks pouring trillions into monetary systems with a few countries going bankrupt along the way.

The world economy is teetering on the edge and for you everything is fine?

My posts and opinions are not facts, but they do give people more information to be aware. Maybe I am a “doom and gloomer” or maybe I look at reality, who knows.

I have said it before, until the good news outweighs the bad news all markets will continue to go down.

http://www.cbc.ca/canada/calgary/story/2008/09/17/big-toys-alberta.html

Further to Mark’s point, anyone catch this November 4 story about Saskatchewan in Fortune Magazine featured on CNN Money?

Saskatchewan: Where business is booming.

http://tinyurl.com/5juzbw

From today’s SP, “Great in ’08, Sask economy looking fine for ’09″

Conference board revising Sask. economy predictions up to 5.2% for ’08 and 3.6% for ’09.

Says employment will grow 1.9% in 2008 and 1.8% in 2009.

Personal disposable incomes to rise a whopping 10.3%. Retail sales top grow 12%.

$500 million in infrastructure investment in 2009. $330 million in personal tax cuts in people’s pockets in early 2009.

Heard an interesting comment yesterday about a large investor who is holding at least 500 Saskatoon condos. “They’ve decided to keep them. The rental market is attractive enough now that they make sense to hold.”

I wonder if we’ll see more of that.

AB:

Xmas 05 prices start to climb, continue until fall of 07, decline, level, rise in the new year until May/June (08), then collapse.

SK:

Xmas 06 prices start to climb, continue until fall of 08, decline, level, rise in the new year until May/June, then collapse.

However, mid spring the pending economic meltdown started to surface, and here we are today…

I think prices will collapse across the country, I can’t see much support, out east the GM plants are headed for bankruptcy, Nortel, Circuit City, Oil at $55/barrel, so many people over extended on Home equity loans, and that equity is drying up fast! I read an article that suggested that the “average” albertanwas carrying $80k of debt, OUTSIDE of their mortgage.. sounds like a big truck, trailer, and a quad and a boat to me.

The rumblings around here are that 1& increase in prime could do a ton of damage.

Im concerned with WIN’s balance sheet it appears they are over leveraged if things go sour. What do you think of Suncor ive been following it since Wesco mentioned it a long time ago and bought a position yesterday at 24.04. With a positive debt to asset balance I think it would be a safer bet than my BQI even tho i love it =’(

But a little off topic who is enjoying these house price cuts and cheap gas!!!! I know I am =o)

Very interesting video. In the future I’m going to be listening more closely to the people everyone is laughing at. In the U.S. they’re still laughing at Ron Paul for insisting that bailouts won’t work and that the U.S. dollar will eventually collapse, even though he has pretty much been bang on in predicting the current crisis.

Interesting that Dent forecasts a temporary recovery in housing and stock markets before the “big one.”