The Gold Rush isn't always real gold

Lauralea and I went for a walk last night through our community and again we wondered at the number of houses going up for sale in our area. Each day brings a new yard with a For Sale sign in it.

We've checked some of these houses online and the mad prices they are asking for their homes are ridiculous. It's like a new gold rush hitting town.

House prices have more than doubled than they were just a few short years ago, and it seems like people are speculating, seeing if they can get big bucks for their houses.

It just seems crazy. What is the value of some wood and land? Especially here in Northern Saskatchewan.

A gold rush never helps the local community it happens in. Speculators with big money come in and buy up cheap homes and hang on to them just long enough to get some money out of them, then they sell and take their cash and leave town. It's already happening here.

The results are that young couples are unable to purchase homes to live in, and one income families find it difficult to live.

This kind of gold rush isn't always really gold.

Comments

  1. People who don't travel much are genereally the ones complaining about the housing increases. Although I do sympathise with the people who do not travel (since they are the once who also typically can't afford a new home), the fact of the matter is that prices aren't skyrocketting yet. It just seems that way because prices have been so depressed for so long due to the past government. Now we are playing catch up with the rest of the country. Even though prices have doubled, being able to buy a 1200 sq foot home for under 250K is still 'cheap' relative to the rest of the country. Or try buying a home on the waterfront(in the city) for under 400K anywhere else in the nation. It just doesn't happen. Don't be naive in thinking that prices won't double yet. As far resources go, we live in one of the richest places on earth. If people play their cards right, there should be more than enough money to go around for everyone.

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  2. I think that, in truth, many speculators are coming in and buying cheap homes. We may have been a depressed housing market but when housing is being bought by people who have no interest in the well being of the people here, it is sad. It may make money for them but making a good return on one's investment is not always an indication of good ethics in investing. If speculation is driving up the prices, not need for housing or the value of the housing, the people in this city become the losers. Our lower income people will have to choose progressively poorer housing or spend a larger slice of their limited income on housing and be in debt forever to pay for it. Rents go up and it is harder to afford that too.

    Some reasonable increase in prices would have been fine. What is happening is not all good. IMHO

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  3. I don't mind seeing a boom, but only if there is real staying power to the factors driving the boom. i.e. Boom and Bust isn't great. Apart from P.A. being a service centre for the north, I don't really understand what is behind the recent housing boom.

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  4. The Globe and Mail yesterday reported that:

    The biggest housing boom in more than 50 years appears to be out of steam as sales tumbled in all major cities this winter and listings surged in Western Canada.

    Sales of existing homes cooled in almost all major markets – including Toronto, Calgary and Vancouver – in the first quarter of 2008, according to figures released yesterday by the Canadian Real Estate Association.

    At the same time, a glut of sellers entered the markets in the West, sending new listings to their highest level on record.

    The first-quarter data prompted one prominent Bay Street economist to declare the end of the most robust housing cycle of the post war era.

    “Canada's six-year housing market boom is officially over. Aside from a few choice prairie locales, sales are melting faster than this year's snowpack,” Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said in a research note.

    In the first three months of the year, 75,467 resale units changed hands, a 13-per-cent drop from the first quarter of 2007, according to CREA.

    http://www.reportonbusiness.com/servlet/story/RTGAM.20080417.wcrea0417/BNStory/Business/home

    I don't want to see a boom that is really just a bust in a month or two. People buying houses that in a month or two won't have the value they paid for them.

    And the way the market is trending in the US and some of the more populated Canadian cities, booming house sales are in chill mode.

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