I was speaking today to a perennial top producing Realtor today and he said “There will be blood in the streets” as we discussed the current condo market in Calgary.
There are currently over 2500 listings of Condos on the Calgary MLS right now. The rub is that a lot of these listings are from speculators. It is these people that are doing it to themselves.
I’ll give you an example of a client I know about right now that his story is very similar to a lot of other condo speculators.
Bought the condo at the peak of the peak in late 2006 for $635,000. Took possession last month and immediately wanted to put it on the market at a price that would move it in 60 days. He had at the time 5 other competitive listings in the same building. My realtor friend gave him a price of $569,000! Then what? Within a week 7 more competitors came on the building (because they are all starting to take possession) and now there are 13 new listings in the matter of two weeks. This person just dropped their price to $529,000 and will be glad to take a deal at $500,000 net of commissions!! OUCH a $135,000 dollar loss.
What can he or many others do? You can’t rent them, the market there is also saturated, and you can’t sell them for what you have in them. The less sophisticate, and there are lots of them, will be in trouble and don’t be surprised if you see a glut of foreclosures in the near future. Gasp…Foreclosures in the hottest city in Canada? I know hard to believe.
So now what? Easy, if you are well healed then you already know that when there is blood in the streets you get opportunistic. There are definitely deals and it will only get better go get ‘em tiger.
If you are a speculator then I am sorry for the bad news but you will have to take your medicine and believe it will taste bad, but you will have no choice. Don’t chase profits that are not there.
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