I had the good fortune to visit Vancouver for the Century 21 Canada Conference this fall. It certainly is a beautiful city and I can definitely see the appeal of living there. However, I struggle with the cost of housing. Here is a current example. The home above is listed for sale at $795,000. It's described as "that perfect fixer upper in an amazing neighbourhood" with street parking. So let me get this straight. If I put 20% down or $159,000, I'm left with a mortgage of $636,000. Even with a variable rate of 2.25%, I've got monthly payments of $2770 with a 25 year amortization. But wait, I still have to fix it up and I don't have a garage or a driveway! This can't end well.
It reminds me of a conversation I had with a Realtor from California over lunch at the Mandelay Bay casino in early 2005. She related that the average sale price in her area was approximately $800,000. She also indicated that the only people who could afford to live there were people who had always lived there and whose homes had greatly appreciated. The last figure I saw quoted was that average prices in California had declined 59%!
I can hear people now saying this is Canada and it's different here. I certainly hope they're right because if the only difference turns out to be timing, we're going to be in a whole world of pain.
For the record, if you've got $795,000, you can buy a 3500 sq ft home on 1/2 acre in the Westmount area of Kitchener-Waterloo.
As always, feel free to call/email for sound advice on your real estate needs 519-570-4663 Jeff.Gingerich@Century21.ca