For most people, Real Estate represents an important emotional as well as financial investment.
It's not just bricks and mortar; and it is certainly not merely a financial asset.
Most often, it's our home; a home in which we raise our families and plan for our retirements.
Our home is not at all like any other trade-able commodity. … It's where we live!
That's why, when I hear people talking about the Vancouver "Real Estate Roller Coaster", and the
"Housing Bubble", it gives me pause to consider my personal experience in the Vancouver market.
I'm what you might call a mature agent! ... I started selling real estate in early 1983.
Back in the good old days (1983) , you could buy a nice Kitsilano home for about $150,000!
Wow! ... What a great deal, right? ... Well, read further and you will see that price isn't the only ingredient in Vancouver's real estate stew!
There's the impact of mortgage interest rates to consider too!
... 15% ! ... Holy Mortgage Calculator Batman! ... That's Huge! ... and the interest rates were just coming down from a high point of over 21% in 1980! ... Can you imagine?
This meant that in 1983 your 150,000 home (with a 90% loan to value high ratio mortgage of $135,000) would cost you about $1,682/month!
... Still sounds manageable though, doesn't it?
Now let's take a look at family income back in the olden days. According to Canadian Government Statistics , (in 1983) the median after tax family income in was about $41,800 ... that's about $3,484/month!
This meant that many families had to find a way to dedicate about 48% of their after tax income to their mortgage! ... Hmmm? ... This is beginning to sound familiar!
So what's the purpose of this exercise? ... Well, here are some pecuniary tidbits to reflect upon:
1. the $150,000 dollar asset is now worth about $1,300,000 … Not bad, when you consider that the leverage that you actually worked with was the $15,000 down payment!
and
2. (after all this time) there is no outstanding mortgage balance or payments!
and
3. Vancouver Real Estate continues to prove that it is an asset that is Much More than just a Hedge Against Inflation!
The important message here is that Vancouver is by far the most beautiful and vibrant city in the world!
We know it and that's why we have chosen to live and raise our families here!
Sometimes, through the process of acquiring grey hair one can also learn a bit about the value of perspective.
That's why I can say that now, just like it was way back in 1983, there are costs as well as benefits that go along with living in "Lotus Land".
I have seen booms, busts and have witnessed more than 1 real estate bubble being burst.
Yet, even after all the bubbles, bumps and bruises, Vancouver's Real Estate market just still keeps on "Rolling"!
Live Well! … and ... Enjoy the ride!
Jim Gould
RE/MAX Crest Realty Westside
604-619-9043
