Recently, the Globe and Mail asked an important question to homeowners in Toronto: why are we so obsessed with discussing real estate prices? Writer Leah McLaren has this to say:
Real estate is the new religion of the modern middle class. People act as if they can discuss it dispassionately and without judgment, when really most of us are incapable of doing so. That’s because the choices we make so thoroughly define us. Are you a cool, edgy, downtown superdad or the sort of mom who raises chickens for fun? Do you have a padded rec room or an illegal loft? SUV or zip car?
Where you live and what sort of place you live in brands every aspect of your outward life. It isn’t only a personal choice – it’s also about unchoosing a whole bunch of other stuff, much of which some of your good friends are probably going to great lengths to defend.
While McLaren links the current fad of discussing real estate in Toronto to personal beliefs and choices about what constitutes a good life, she also lays bare the fact that much of where people live comes down to "cold hard economics." And the economics are these:
In 2012, housing costs are 43% of household income for the average family, according to RBC. In 2012, the average price of a detached home in Toronto hit $800,000. For context, in the Leaside neighbourhood that was a 262% price increase from 1996 prices. And it doesn't show signs of stopping. This year, the average price of a detached home in Toronto hit $942,066.
What's happening inToronto is, in part, just one signal in a global trend. As more people move to find work in cities, housing close to the city is skyrocketing in price. But unlike in American cities, which often have a lower-income core surrounded by higher-income suburbs, Toronto's downtown and midtown are almost entirely either gentrified already or gentrifying.
It's in these areas, particularly those "hot neighbourhoods" that started the process of gentrification five or ten years ago - like the west side of Cedarvale, the Junction and even new up-and-comers like Mimico - where a lot of the discussion happens.
When people talk about home prices, they're talking about lots of different things. There's often a combination of incredulity and relief in these conversations, along with occasional jealousy: "I can't believe it sold for that much!" coupled with "I am so glad I didn't have to pay that much for my home!" coupled with "Can you believe what they got for that house?" We've always been interested in what the Joneses are doing while we're trying to keep up with them, and this is no different.
But when all of that is stripped away, people are really talking about where the economy intersects with their lives - which means talking about the future. Where we live shapes how we live - and so when we talk about house prices, what we're talking about most of all is how we live now and how we want to live in five years, ten or twenty, and the world we want to leave to our children.
A good real estate agent will be ready, willing, and able to discuss your finances and your future with you before you go on the hunt for a home. He or she should be able to cut through all the talk to what really matters: finding you, within your budget, a home that's what you want.