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May 07, 2007
Saskatoon Housing Prices Are Speculative
In the past, it seemed that Saskatoon was largely immune to booms in housing markets. We weren't Calgary, Vancouver or Toronto. We didn't see large influxes of people as other cities did when particular industries boomed (and thankfully, because we didn't get any large booms, we also didn't see any large busts). So what's up with the prices now in 2007?
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I've been told, and I've read, that the cause of our recent increase in housing prices is due to lack of serviced lots. That is, people want to build more houses here, but there aren't enough new lots being opened for development. It turns out that CHMC doesn't know what it's talking about when it makes forecasts (or, perhaps, doesn't have sufficient information to make accurate forecasts). Contrast what it said in 2006:
Total housing starts are expected to increase 4.7 per cent to 3,600 units in 2006 and remain unchanged in 2007.
To what it is now reporting:
Saskatoon total monthly housing starts were up 60.7 per cent as homebuilders started construction on 90 homes in February compared to 56 units in February 2006 [...] the highest recorded in that month since 1978,.
Regardless of the bad forecasting, there has to be a reason for the disproportionate spike in prices. So here's my guess as to the REAL explanation over housing prices: it has become a speculative market economy. People are buying houses for the sole purpose of reselling them. Yes, this has always happened a bit in the past, but it's like gold fever or stock market rushes... once a few people make some money here (more than usual), this starts a snowball effect with more people looking to purchase a house and flip it for profit. More people buying means more demand and higher prices. Higher prices lure more and more "investors" (speculators), and the cycle continues. Don't get me wrong, there is a real increase in demand for housing here. It's just been blown way out of proportion by "false" demand from speculators.
How long will this last? That is indeed the entire point of my message today. It won't. People are looking at the rush on Saskatoon housing and comparing it to the housing market in Calgary (which has been on the rise for 6-8 years) and that of Vancouver (which rose over a decade ago and never has dropped back off) and thinking that Saskatoon will do the same.
I don't think it will. I don't think that Saskatoon can sustain the same long-term price growth and/or plateau that Calgary and Vancouver have been enjoying because the economies of cities with 1 million (Calgary) or 2 million (Vancouver) people are much different than the economy of a city with 200,000 people. Calgary and Vancouver are host to a wide variety of markets that don't even exist here. They are also both rich in large multi-national companies, whereas the largest employer in Saskatoon is not a company at all but the University of Saskatchewan.
Posted by Hammer at 03:00 PM | Comments (1)
May 03, 2007
My Adventures With Domain Estate
I purchased a domain name a few years ago transfercredit.com that was for a specific software project dealing with the transfer of learning credits between various academic institutions. Unfortunately, the project fell through and never was awarded. So what to do with the domain name? Really, it's a good domain name for refinancing credit or consolidation loans. :)
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I ended up keeping the domain name at first because I thought that perhaps the project would be resurrected and eventually go through. After three years, I'm convinced that the participating institutions have no common interest in actually completing this project. Sadly, they all didn't realize just how complex the problem was. They wanted it done for a low, fixed price, and it just wasn't going to happen that way. I still think there is value to the students in completing this project, but until the institutions can see that, then there's no hope.
So what to do with a domain name? For three years I did absolutely nothing, it just sat there. But then two weeks ago I received an unsolicited request to sell the domain name. I wasn't really prepared for it, so my response was fairly weak, and I haven't heard back from the person. No surprise there.
I thought about it some more, and wondered if "domain estate" was like "real estate", and that there may be some intrinsic value in the name of a domain itself. I'm sure there is for very popular and easy to remember domain names, but would transfercredit.com qualify as such?
To find out, I did two things: first, I opened an account with a domain parking company, and now if you click through to the transfercredit.com web site, then you will see credit card, loan and finance related advertising. If this manages to bring in $30 per year, then at least the annual cost of the domain name is paid for.
Beyond that, I set up an auction where people can make me an offer on the domain name. OK, world, I'm ready - bring on the requests.
I own a few other interesting domain names that I had full intentions of developing web sites for, a while back before I realized that coding web sites was very easy... it's keeping them current with content that's hard! I suspect that perhaps this is all for nothing, but at least for the moment it's semi-interesting.
Posted by Hammer at 03:43 PM | Comments (0)