The Vancouver Sun had an interesting article this past week titled "Buying a house in Vancouver? Welcome to the money pit".
The article states what we all know; that there is no such thing as an affordable Vancouver house any more.
More strikingly, the article notes another truism. "Even if you manage to come up with a down payment, you'll likely be a single-digit interest rate hike away from bankruptcy, and someone you don't know will be renting the basement suite you had to build in order to quality for the mortgage in the first place."
It's not that we don't already know this.
What is compelling is that, despite these conditions, there exists such a widespread sense of resignation and acceptance to this condition.
The article goes on to describe how attempting to cope by buying homes - which in another time would have been nothing more than teardowns - and turning them into reclamation projects as their only hope of owning in the city.
"Many are found on the edges of Vancouver, to the east and south, small postwar stucco bungalows and turn-of-the-century wood-frame piles that are short on bathrooms and bedrooms and need insulation and sometimes foundations because they've been long listing to starboard."
The article concludes by saying, "if you have just sold your soul for a local patch of dirt and fir floorboards, you'll soon discover that the only sure thing about real estate in the Vancouver area these days is that, like death and taxes, you're now the proud owner of a money pit."
So what do we have here? In a desperate attempt to own a home of their own, families are plunging themselves into massive debt to buy homes that require huge upgrades. Since they were so overextended to the home to begin with, odds are that they can't afford to do the proper renovations that are required.
The result... paying to the max for a home that doesn't even come close to being that 'dream' home you wanted to begin with.
But what of the other option?
Rather than capitulate and becoming a debt serf, why not take the sane option and stay the hell out of an irrational market?
Why is it that this option is simply not on the radar screen of so many people I know?
Like they say, common sense... is not all that common.
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