650k Doesn't get much in the way of a house

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Check out the prices in Toronto

TonyF

Alan F.:

Imagine the level of opulence one would expect if, sight unseen, one was informed that this house cost $1238 per square foot.

Pat Gilbert:

I think Vancouver tops Toronto for irrational exuberance with respect to real estate, or at least it used to. There was a parody a few years back whereby you were shown photos of dilapidated small houses in Vancouver, and you had to guess whether they were million dollar houses or a crack houses.

When I lived in Washington, DC, there was a suburban subdivision that had post-war, six room, 800 square foot houses on quarter-acre lots. This was just "inside the Beltway", and in the 1950's was occupied by working class families, and was even denigrated for that as being lower class housing, as I can attest to from personal experience.

Enter suburban sprawl, over-development, and the arrival of the DC subway system, ("walking distance to Metro") and now they are very desirable real estate. During the boom, tear downs were popular there, so that now you have three story, 4000 square foot brick Colonials sitting next to 800 square foot houses with the original asbestos siding.

To paraphrase what Robin Williams said about cocaine, perhaps it is God's way of telling you that you have too much money.

TonyF

Hen Bob

Member

Nice post Alan, made me laugh. Thats exactly how our area was right before the crash.. A 1/4 acre lot around here is at about 550k for a tear down. Wouldn't be surprised to see it back into the six hundreds within in a year..

I also see multi million dollar homes get torn down too

Economics 101

Good stories. But I'm not sure how much irrational exuberance there really is.

I'm in Miami. Lots of money flowing into this area out of South America over the last few years. Ya know, from places like Venezuela where toilet paper is now a luxury.

And from Brazil and Argentina and a few other places like Bolivia and Equador that haven't been doing so well, either. Not crash and burn like Venezuela, but bad enough to make people with money look elsewhere for a safe haven.

Back in '08, this place was worth about 425K at the peak. The subsequent RE collapse took it down to maybe 250K.

Today, it's worth maybe 450K. Nothing much has changed. It still sits on the same 10,000 sq ft. The house is 9 years older. The land is worth about 250K. The house about 200K.

10 years from now the land will probably be worth north of 450K all by itself and the house about the same 200K.

650K and they'll still be buying. Probably all the way unto a mill for what's a crackerbox 2/1 on a nice chunk of land.

Driven purely by non-US demand -- the locals can't afford it. Current property tax? About 1K. Sell it? New property tax rate? About 6K. On top of a 400K mortgage. Lots of cash is king.

Unrelated, but my girlfriend's father died about 4 years ago and we sold his condo in Aventura (north of Miami, big retirement community area) in 2 days to some chick from Brazil. For cash. Closed in less than a week.

The realtor said he had dozens of South Americans looking for Aventura condos, his specialty.

Somehow I doubt that demand for what he sells is going to dry up anytime soon.

Alan F.

Bay Area real estate prices are driven by techies. You see stories of people living in parks and campers making 150k a year and just wanting to bank the cash.

pat gilbert

As stated I'm guessing hot money is a factor in pockets around the world.

Canada has a small population so the demand can increase comparatively a bunch.

But the prices are not really up on avg compared to 08

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Eric Smith

We are doing a job in a small 1050 sf house in San Francisco. Old plain very small squeezed together houses. No front yard, tiny back yard.

$1.5 million

Alan F.

This gem is available at less than 100k in Oakland

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You can still buy a house in Oakland ..

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Pat Gilbert