Housing Starts Continue Downward Trend in April

CMCH released their monthly report today, showing that housing starts were down again in April. For the year so far, starts are down 41% from '07 in the greater Edmonton area. If you compare April '08 to April '07 starts fell 60% in the greater Edmonton area, and 44% across Alberta (the only major city that saw an increase was Lethbridge).

"For the tenth month in succession, single-detached housing starts registered another year-over-year decline in starts in April. Home builders poured foundations for only 178 units last month, representing an 80 per cent slide from April of last year. For the year-to-date, single starts have fallen by over two thirds from the first four months of 2007 to 835 units, the lowest level of activity since January through April of 1996. “High levels of unsold spec home inventories coupled with an ample supply of resale listings continue to undermine new singledetached construction this year,” observed Richard Goatcher, CMHC’s Senior Market Analyst for Edmonton. CMHC expects single-detached starts to begin improving in the second half of the year once new house inventories turn the corner in the months ahead."

Multiple starts were also down - 38.5% - "Multiple unit starts are expected to cool for the duration of 2008 due to an expected run-up in new condominium apartment inventories and a relatively well supplied existing condo market,” added Goatcher.

At least things have slowed down, and the new homes aren't contributing to the overall inventory as much - I certainly haven't heard about anyone buying a new home to flip lately.

Comments

[Franklin]

Moved from Saskatchewan to Alberta 1996, bought a house in Edmonton for $130K, sold in 2006 for $400K moved to Saskatchewan bought a house for $190K, sold it last week for $380K and back to Edmonton for a very good job. Just signed a contract with a builder for a 2200 square feet for $415K. I'm not 40 yet and have quite a bit of cash and stocks thank to real estate. I really get annoyed when people complain rather than taking an action. There is always a silver lining.

[love]

***Comment deleted. Personal attack***

[Michael]

Franklin,

Looks like you did well for yourself with a bit of fortunate timing!

However, for every lucky individual in your shoes, there are probably around 5 to 10 who are on the other side of the coin with over-extended or extremely tight budgets. Eventually they may be complaining, along with those who find current prices too much to afford.

In the event the government gets involved be it lower interest rates or straight up bailouts, the costs of this excess will be paid back by everyone through higher fuel, food, utilities, etc (even higher if our dollar gets devalued). Whether you rent, own, or are debt free, the costs of living go up for all.

That being said, I am glad that you have returned some of your profits from your Real Estate success back to the bubble in which they came from.

Although you will not feel any net effects of falling home prices (unless you tap equity) those RE dollars you made will effectively be reduced/destroyed in the future value of your property.

In response to your post, there are people out there who do have a right to complain. For many, "taking an action" was not an option. As a result, costs of living have increased for all, even if you are a poor family who rents because it is and always will be the only option your personal finances dictate.

This is in no way an personal attack. You have been fortunate to end up in a much larger and nicer house and after the numbers are crunched, you are probably $100k - 150k richer in the end. An enviable position for most!

Take care.

[roadrunner]

Franklin,

A contract for 2200 sq feet with a builder for $415,000?? That looks like a too good to believe price when most resale homes in Edmonton with 2000+ sq feet are priced $500,000+. So what builder is this? I'm curious.

[Franklin]

roadrunner, it is one of the big builders and found the house in their web site. There are quite few good deals out there, better than Saskatoon for sure.
Michael, I won't lose and I did not make my money speculating. I was chasing better job opportunities not real estate. You need to chase success, success won't come to you. People should learn from the success of others rather than lamenting about their luck. I'm a regular Joe who is doing well and will continue to do well. Good luck to all.

[Brent]

Franklin,

You might have parlayed one to many.

[Franklin]

Not sure that I agree with you. It looks like you share the same bleak views as my wife's family. If I listened to them all along, I would still be a farm machinery mechanic in a remote town in Saskatchewan making $40,000 a year. When I bought my first house in Edmonton back in 1996, I was bombarded with endless phone calls from my in-laws giving me all kind of s**t and warning of the inevitable bankruptcy for taking on such an reckless expensive commitment (130K house then). I learnt to have a positive attitude, maintain focus, filter the noises and look forward. Hey, if an employer could afford to pay me what I'm getting paid right now in Edmonton and have such a solid line-up of projects, the economy must be real good.

[roadruner]

Franklin,

I'm still curious...how about sharing the name of the builder?

Thanks.

[Frank]

Guys that do well don't talk about it, it is just their standard of life!
Guys that always talk about their success are usually big yaps only!

[Nate]

Good article on the Globe and Mail today.

http://www.reportonbusiness.com/servlet/story/RTGAM.20080508.wreynolds0509/BNStory/robColumnsBlogs/home

Trying to dispel some of the myths about the Oil industry. Shows that despite the oil sands, we're still a small-fry on the world Oil production scene.

[Tim]

Bob Truman's "blog" says that the average price of a SFH for the first week of may are over $404,000.

[BearClaw]

Franklin,

Is the home in Edmonton city limits? We are looking for a smaller house in the 325-350K range and I am seeing better options in resale.

Did you negotiate a discount?

[Tim]

What size of home are you looking for BearClaw? There are a lot of SFH builders right now that would be in that price range, depending on home size and location.

[BearClaw]

Ellerslie, or SW Edmonton
1200+ sqft
attached garage

[itchy]

Hey Tim,
I went to Bob's site and all I found were the condo stats update....the SFH one is still the month of April. Did you have another link that you went to?

[BearClaw]

i dunno i see the stats as mixed...

http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html

[Nate]

It's amazing how little prices have changed with all the inventory and people sitting on their homes for months and months.

At some point, things will have to tip in one direction or the other.

Either inventory runs out because of the complete stall in construction, or market sentiment turns negative and sellers begin to panic.

[Gus]

I'm guessing that a lot of the inventory has to be owners casually testing the market. Motivated sellers would have had to get the deal done by lowering the price long ago. Either that or there are a lot of people carrying two mortgages and being very optimistic and patient.

[Uncle John]

Hmm I know someone who bought a new home in T-Towne for 355k and that includes upgrades.
Its 2 Story but no Garage and its 1250 sqft.

You have to negotiate a deal with the builder.

That same home was selling for 418k in september when it was first listed, and there were plenty of people that bought that model for that price.

So thats pretty much 60k off the original price in a matter of 6 months.

People really should do their research. I would have never bought that home at 418k because I new what was coming

[Nate]

Uncle John,

Was that a builder spec home they bought? Or did someone else buy a spec home and took a loss when selling to your buddy?

[karl]

Do not worry, sooner or later everybody will regain their losses.
RE prices average $ 404,000 range and going up.
In Calgary, the average SFH pending is $ 530,000 and there is 348 pending.
You only loose, when you do not own a piece of Real Estate.

[BearClaw]

Theres a listing in Terwillegar town 1330sqft double detached garage listed at 357K. Its a 2004 which to me would be better cause its fenced and 'grassed'.

If the upgrades didn't include a new garage I still think resale is better.

[Nate]

Karl,

Would you recommend a 40 year mortgage for one of those 530k homes? 5% down payment paid with a credit card?

You only LOSE by not doing it, right?

right?

bueller?

[Roadrunner]

Karl,

Now there's a real profound statement...is that based on the theory of "buy land, because they ain't making any more of it".... Looks like I'm hearing "tulips of amsterdam"..

[Tim]

$361,000, Hardwood floors on the main floor, all of the appliances. A green built home, front and back landscaping and a 10x10 deck. Also, a detached garage built. That is the deal I got. Oh yeah 1489 sq/ft in south east Edmonton