The cost of living is up

Tuesday, September 16th, 2003

For sale: a not-quite-completed 2,400-square-foot house on a 33-foot view lot on West 15th. Price: Just over $1 million.

Maurice Bridge

CREDIT: Glenn Baglo, Vancouver Sun Built on spec, the modestly sized house is one of four Point Grey-Dunbar homes on 33-foot lots listed at $1 million-plus.

This is the view from 3611 West 15th Ave. It adds about $100,000 to the value of the home, the sales agent says.

There’s still something about a million bucks that gets everyone’s attention.

And when it’s the price of a modestly sized house on the smallest of standard Vancouver city building lots . . . are you listening now?

West-side homebuilder Graham Street is nearing the end of his work on the house he’s been building for the past six months at 3611 W. 15th Avenue. There’s still a couple of weeks’ worth of interior finishing to be done, but the shape of the home is easily apparent: a bright and airy three-bedroom, with plenty of heritage touches inside and out, as well as high-quality modern features like a top-of-the-line kitchen and geothermal heating which doubles as air conditioning in hot weather.

It’s as large as the zoning bylaws allow — 2,407 square feet, most of it divided between the main and upper floors, with only a small amount of space allowed in the basement.

There’s also an unobstructed vista of the North Shore mountains, Burrard Inlet and the downtown peninsula which one would be tempted to call a million-dollar view, but that wouldn’t be accurate.

“$100,000,” says real-estate agent Peter Clayton-Carroll, evaluating it in the same matter-of-fact manner he uses to describes the house’s other major features. “What’s Vancouver? Vancouver‘s a view.”

Without it, this house would be somewhere in the $900,000 range occupied by most new west-side homes. But with it, the asking price is $1,075,00, making it one of four million-dollar-plus homes on 33-foot lots in Dunbar and Point Grey currently in the database of the Multiple Listings Service.

Clayton-Carroll, who’s been selling real estate in this area since 1990, says this year is the first time he’s seen prices for new homes on 33-foot lots hit the million-dollar mark. He and his wife Susan Clayton-Carroll of ReMax Crest Realty (Westside) have the listing, and he’s had 10 to 15 calls in the past few weeks.

“It’s quite active,” he says. “There are a lot of people looking, a lot of money out there.”

He thinks it may not sell until it’s completed, when prospective buyers can see everything in its final form rather than imagining it from the unfinished outlines. But Street is used to people popping up unannounced while he and his trades are working.

“I’ve had people come when Peter’s not here, a couple from Richmond, empty-nesters. There was a young couple came by, I think he was a hockey player, great big strapping guy, looking for a brand-new house,” he says, sounding only mildly incredulous.

“I’ve had phone calls from people in the area who have existing homes,” adds Clayton-Carroll, “but they might not have as good a view and they want to move into something new.”

Street and Clayton-Carroll betray no sign of being impressed by the price tag on the property. For them, it’s simply a matter of adding up all the numbers and setting a price they believe the market will bear.

It’s a careful process, based on long knowledge of house building and house buyers. Street also does custom home building, but this one is a spec project, with his money on the line.

Last November, he bought the lot on the southwest corner of 15th Avenue and Alma Street. He describes the old house which sat on it as a rat haven, and says the neighbours were glad to see it demolished, which it was shortly after he got possession of the property on March 1.

The lot, with a frontage of 61 feet, was divided into a 33-footer and a 28-footer, and work got under way quickly. The house on the 28-foot lot to the east is also nearly finished. It’s much like its million-dollar neighbour in design and finish, but the bylaws that limit square footage dictate that it be four feet narrower. It’s listed for $898,000.

Standing in what will soon be a tastefully appointed living room, Street and Clayton-Carroll look at some new MLS sheets, including one for another new house on a 33-foot lot in the area, priced just below this one. It’s not a view property, although it promises a view from a rooftop deck.

“People will say, oh, you’re too low, but if the house moves, that’s good for us,” says Street. “You go on to the next thing.

“You don’t want to give it away, but if you price it right, it will sell. I want to get them sold, I want to move on to the next one.”

He lives in Dunbar, and has been doing this since 1981. The first house he built on a 33-foot lot was a spec job at 32nd and Dunbar, and he sold it for $592,000. He’s never seen prices sag on his 33-foot projects, and while he says his quality of workmanship has never changed, the cost of quality has.

“The quality of items going into a house has increased, people demand a little more in a house now. The new thing is the biggest stainless-steel appliances, high-quality appliances, security systems, sound systems, adding a lot more mouldings, things you maybe wouldn’t have done as much of [in the past.]

“The cost to build a house is definitely higher and the shortage of manpower to build these houses . . . . Personally, I’ve had a lot of my trades for many years, so it hasn’t affected me as much, but the prices have crept up, too.

“There’s more demand; the guys are trying to get a little more money, so that pushes up your labour up on the house a bit more.”

These days, he says, good construction adds up to about $150 a square foot.

So who can afford it?

“You get two incomes with people drawing $200,000, they can afford to buy a house like this,” he says.

“You’re dealing with professional couples, somebody who’s established,” adds Clayton-Carroll.

The on-line MLS listings include a mortgage calculator, and for this property, with 10 per cent down and a 5.9-per-cent mortgage on a three-year term, it says the buyer would need an annual household income of $234,577 to cover monthly payments of $6,255.

But by established, Clayton-Carroll means someone who already has a substantial stake to put down, possibly the profit from a previous real-estate holding. If the down payment jumps to $500,000, which is close to lot value in the area for a 33-foot property with a teardown house, the monthly payment falls to $3,645, requiring annual household income of $136,679.

For all Street’s experience, however, he won’t predict where the market will go next.

“I can’t maybe see, you know, going to $1.5 million for a house like this. It may happen, I don’t have a crystal ball, but as long as the B.C. economy stays steady, the interest rates are the major key to anything.

“If it goes to five or six per cent, it’s still not bad, but if it starts going to 10 or 12 per cent, you’ll see the housing market take a tumble. You’d be very careful what you’d buy and what you’d build if interest rates were at 10 or 12 per cent.”

© Copyright 2003 Vancouver Sun

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