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House explosion reveals antiquated notion of housing market

The CBC reported today that an explosion leveled a home in Surrey worth “nearly $1 million.”

There is nothing wrong with the report itself. However, both the report and the RSS feed seem to emphasize the fact that the house is worth $1 million. In today’s housing market, at least in the lower mainland, a million dollar house is no big deal. Several of my co-workers own million dollar homes. My home is worth about three quarters of a million. A two bedroom twenty year old home in an established Vancouver neighborhood can easily be worth $1.4 million. And an obviously very ordinary home in Surrey can be worth $1 million. This is what that fabulous million dollar home looked like before it blew up:

surreyblast-before.jpg

Can’t you just see the limousines and fancy sports cars parking out front? And isn’t that a private helipad on the roof?

It seems to me that the reporter or editor of this story either live in one of the areas of the country not impacted by the housing price boom or they are people who haven’t actually looked at what homes are selling for in their own neighborhoods. The emphasis on the house price suggests they are a bit out of touch and are thinking a million dollar home must be a mansion or some such: hardly. To get what anyone would consider a “mansion” in the lower mainland means spending a minimum of three or four million- there have been houses in the Vancouver area that have sold for prices over ten million.

The other factor in play here is, of course, the fact that mention of a house being worth a million dollars immediately makes me think of… a very ordinary house. Obviously, my sense of reasonable prices is as skewed as that evidenced by the report in question: unfortunately, my skewed perception is based on reality.

3 comments to House explosion reveals antiquated notion of housing market

  • In Edmonton, a house of that size and vintage would go on the market asking 350 to 500 thousand depending on the neighbourhood. It would actually sell for 100K less than that – if it sold. That’s still 2 to 3 times what it would have commanded 8 years ago, but the insane bubble of last spring has deflated.

    Are those prices sustainable over the long term? Possibly in the lower mainland where there is a true scarcity of space and a historical desire for people to move there.

    Here even in “oil rich” Alberta the average household income, before taxes, is 70K. When you match that up against a 240k asking price for a one bedroom condo in the boonies cheaply built with chipboard and vinyl siding and a lovely ground floor view of a parking lot… no. Either wages have to go way up, especially for the lower earners or house prices have to come down.

    The really sad thing is that thanks to the sub prime mortgage idiocy probably all of our pensions depend on these really ordinary houses actually being worth 3- 4 times what they really should be.

  • Here in the lower mainland, I think the current prices are the new “standard”, and I don’t expect them to go down. It really isn’t possible for the average consumer making an average salary to buy a free-standing single family home. A two or three bedroom condo is in reach, but only if you are willing to get a 30 year mortgage and pray that interest rates don’t go up.

    I can understand why a reporter might get the misguided impression that a million dollar home is something special. Just a decade ago, this was true just about anywhere in Canada. Now, though, there are plenty of places where that kind of price is more or less “normal”: certainly not a price to associate with champagne dreams and caviar lifestyles.

  • Oblivions

    Because this both depresses the crap out of me and riles me up, I’m not going to weigh in on this except to say, with a slightly evil smirk, that it’s pretty funny when people have to start remedial work on these million dollar homes. Suddenly they start to feel a little ripped off. It will take a another 5 -10 years for the full failures to come to it’s full light but when it does a million dollar home is going to look like even less of deal.

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