All Forum Posts by: Bart Johnson

@Christopher Brainard

Southgate is in south-central Edmonton, surrounded by quite a number of nice, well-established neighbourhoods. My own home is about a mile away in a neighbourhood that dates from the 1940s and 1950s, with tons of modern renos, expansions and infills.

Detached single family homes in and around the Southgate area start in the low $400s, rising as you go north toward the city centre. You won't find too many detached SFH homes under $400k south of the city centre, but there are quite a number of condos and townhouses available south of Southgate that run in the mid-$200s, dropping to as low as the high $100s the farther south you go. There are also half-duplexes that run as low as the low-$300s.

All of these prices are listed ones; you should be able to do better if you can find properties before they're listed, particularly if they need some work.

The following link includes a map of the city:

https://www.edmontonrealestate.pro/communities.php...

Southgate sits right at the border between areas 15 and 16. Area 55 is a fair ways further south but it's probably still just a 10- to 15-minute commute and prices are a little lower there. You can click on areas 15, 16 or 55 (or any other) to get a list of neighbourhoods in each one, then click on each neighbourhood to get a list of properties for sale, plus a short description of the neighbourhood at the bottom of the page.

The nice thing about Southgate is that it's located right along a major east-west thoroughfare (Whitemud Drive) that makes commuting from elsewhere on the southside (i.e., southeast or southwest) relatively hassle-free. It's also right along the LRT (light rail transit) train route, so it's easily accessible from the areas of the city serviced by the LRT.

And finally, I have a nice little condo that's available right now (putting it on the market later this week) that's about a 15-minute commute from Southgate. It's what they call a carriage-style unit that includes just under 1,000 square feet on the main floor and about 650-700 square feet of additional living space in the finished basement. Priced at $299k. If your friend is interested, or would like any other info on the city, I'll send you my phone number or email by private message.

Cheers,

Bart

Roy, I ignored the exchange because it applies to both income and real estate cost. Yes, $100k is worth only $77k US these days (sadly), but that applies equally to the average cost of a home in Edmonton (across all types) -- $378k Cdn is $291k US. Either way, it's 3.8 times the median household income.

My point -- or one of them anyway -- is you have to look at markets locally, not nationally. It's irrelevant to the Edmonton housing market that the national median household income is $77k (Cdn) when, locally, it's $98k. Ike you say, things are less out of whack in the Maritimes than, say, in Toronto.

A couple points to contribute:

The reports I have read suggest Canadian middle-income earners bring home more than their US counterparts. For example, one report shows median household income in Canada at $72k, versus $52k in the US (2013 figures, I believe). So maybe that has something to do with the higher real estate prices north of the border.

That said, I don't think you can compare country to country. In my mind, you have to look more at city-to-city comparisons and the economic fundamentals that drive them. Say, compare Vancouver with San Francisco; or Toronto with Boston or New York or LA.

An argument could be made that Vancouver and Toronto are both overpriced and due for a correction, but I don't know if that's necessarily the case across the country. I live in Edmonton, where the average price of a home is $378k (all housing). Is that too high when the median household income is nearly $100k? Several US cities have higher real estate prices -- e.g. Seattle ($500k), Boston ($450k) and Washington ($490k) -- but significantly lower median household incomes in the $50s and $60s. Are these cities due for a correction?

I think you have to look at markets from a local perspective to find out why they are what they are. And I think, with the possible exception of Vancouver and Toronto, most in Canada are supported by economic fundamentals. Now if the economy weakens -- as we are starting to see here in Alberta with the drop in oil prices -- then sure, we could see that reflected in real estate prices. But that, to me, wouldn't be a bursting bubble; that would be a response to a change in the economic factors that underpin the market.

Hi @Cory S.

 I'm not an expert but I do live in Edmonton and I have a few thoughts you might want to consider.

First, I think it's too early to panic about the economy.  Oil prices have hit the skids and oil companies are laying people off, which as you point out, can have ramifications for those in support industries like construction.  But if you believe most local economists (and I'm not suggesting you should) the downturn we're starting to see is likely to be less severe than 2008-09 and not last as long.  And so far, while there is a glut of real estate on the local market right now and it's not moving as quickly as it was, I understand prices have remained steady.  So far. 

Second, while it is true some workers will head home to Ontario or Newfoundland as they lose jobs, current provincial government forecasts still anticipate continued population growth, in the order of something like 80,000 people -- which is decent for a province of 4 million.  So even if real estate prices stagnate or even decline, I think there will continue to be decent demand for good rentals.  At least I hope so, because I have one.

Third, don't forget that in addition to the $500-600 you say you'd be saving on rent, you'll also be pocketing the equity you'd be building in your property -- equity that the renters in the basement will be helping you build.  If the market does drop in the short term, history in Edmonton suggests it will recover soon enough, and grow.  And even if that takes longer than usual, you're still building equity as you pay off a mortgage that's about as cheap as you'll ever get.   

Fourth, I don't think the borrowing rates should concern you.  They're super low right now -- you can lock in for something like 2 1/2 per cent for 5 years -- and are unlikely to go up anytime soon, as the Bank of Canada only just drop its rates last month.  Of course, anything can happen in the longer term.

All in all, I don't think you should be afraid, especially since this would also be your primary residence, thus saving you from throwing rent money away.  If you're really unsure, there's no harm waiting a few months to see what happens with the market and/or your job.  This house that you're considering sounds like a good buy, depending on where in Edmonton it is, but there will be others in the months ahead.

Whatever you decide, best of luck, and welcome to BP.

Thanks @James Wise, @Mehran Kamari and @Paul Timmins for the welcome and the early advice.

Cheers,
Bart

Happy New Year everyone.

Certainly, it will be a new year for me. It's the year I'm finally going to pull the trigger and get down to some honest-to-goodness real estate investment.

I'm a long-time government executive looking to change career paths, starting with some dabbling and eventually going all-in.

I stumbled on BP via a link from J Scott's web site, which I stumbled on several months back while snooping around for some on-line advice. The web site is amazing. So much great content and so many great contributors. I vowed that this was the year I would finally educate myself in real estate investment, and BP will play a huge role in that.

While I am practically a complete newbie when it comes to real estate investment, I do already own one rental property, which was my principal residence until I got married a couple years ago. The rent covers all costs, including mortgage, so the equity in it is growing. But intend to sell it and use the equity to kickstart my real estate career proper.

I'm looking at flipping houses for a start and eventually holding/renting, all in the Edmonton area. I look forward to learning more about both.

Cheers,
Bart