Housing Woes

So, I’ve been a “home-owner” for about two years now. I actually managed to get a pretty good deal for my place – the bathroom and kitchen had been renovated in the year previous, and the previous owners also put down hardwood laminate. When it initially went on the market, it was priced at about $220,000. After being on the market for a year, I managed to get the place for $196,000. A pretty good deal, as far as I’m concerned.

However, ever since I bought this place, I’ve been keeping an eye on the local market. What I’ve been seeing for the past two years hasn’t been fun to watch.

See, when I bought my place, I got a letter from the bank saying “You can have a mortgage up to amount X”. That number is what I told the real estate agent I was working with, and it’s what I used when I was browsing MLS.ca. Now, when I was looking, I kind of had blinders on. I had some money saved up for the initial down payment, and a mortgage. I couldn’t afford anything more than what I had, so it limited my search. I’ll be honest – I got pretty lucky in my search. Ever since I lived downtown, I’ve wanted to live there again – or as close as I could get. When I was looking to buy, my terms were pretty simple: I wanted a similar amount of square feet ( ~700 ) and close enough to transit and downtown. I managed to luck out – I found a place that had been renovated recently, it was right on the 135 bus route¹, and I could afford it.

Many of the other places I could have afforded would have either:

A) been too far from a SkyTrain station or main bus route – as I don’t have a car, being close to a major bus route or SkyTrain station is a must. I’ve got a Modo membership, but that doesn’t help with the day-to-day commute. I’ve started biking to work, but that wasn’t an option when I was looking – I didn’t have a bike. I don’t mind too long of a commute by bus, but honest the shorter the better².

B) been crazy small. I’m talking less than 500 square feet. There are studio apartments in downtown that I could afford, even now – but for someone who likes to have friends over it wasn’t an option. I also knew at the time that my girlfriend would probably end up moving in with me at some point; and if something happened between us, then probably some future girlfriend³. Also, my parents are now retired and have become snowbirds⁴. Having some room for a pull out couch or something so they could crash on my bed is pretty much required. They could afford a hotel for when they’re here, but sometimes stuff comes up and they have to stay longer than they intended. In those cases, they save quite a bit of money by staying with me – money they can use to enjoy their retirement!

So, to sum up: I lucked out. I got a decently sized place, that doesn’t look like it was built in the 70’s, and the monthly payments are affordable – even when I was making quite a bit less than I am now.

But!

Now that I’ve had two years to sit back and see what’s going on in the Vancouver housing market, I’m getting kinda bummed out.

Basically, if I want to own a house in the Lower Mainland, I’ve got two options: win the lottery; or move out to Maple Ridge, or the far side of Surrey.

Lately I’ve noticed that there isn’t a single house on the market for less than $500,000⁵. At the lowest interest rate of 3.04%⁶, that’s a low monthly payment of $2281.44! That’s more than half of what I make every month. I’m pretty sure that if I asked people I know, most of them would probably say that $2280 is more than half of what they make every month. What happens if I get dinged with the highest interest rate: 6.5%? Well then my monthly payments are only $3215.15.

If I go looking for lots it’s not much better – empty lots ( or even lots with teardowns on them ) seem to be worth more than the houses in the area!

I think I’m going to save the rest of my thoughts for another post. This one is getting pretty long, and I haven’t even started to talk about why I’d prefer a house over a condo.

Till next time.