Obsession with price approaches trivialization of homes
Bob Ransford
Sun
“Increasing cost of building houses puts upward pressure on inflation” … “Housing starts sizzle” … “Home construction soars across Greater Vancouver”
… “House prices forecast to soften next year” … “Average westside house now priced at $1 million” … “Downtown land prices soar 350 per cent.”
These headlines appeared in this newspaper over the last week or so. My little informal survey of this newspaper’s headlines over the last six weeks revealed 22 stories focusing on the housing market in the Vancouver area.
A friend asked me the other day why people in Vancouver seem to be so obsessed with the residential real estate market.
My answer was it is all about scorekeeping. In a society so focused on consumerism and where happiness seems to be so closely tied to what you are able to buy, keeping score is the way to measure happiness.
The real estate market is the big league for most consumers. In a hot market, every game is a championship game and keeping score is exciting.
The simple forces of supply and demand have led to a highly charged real estate market in the Vancouver area. The stakes have been rising rapidly in recent months. At the same time, some of us remember when trend lines were on the downslide. Needless to say, the scorekeeping wasn’t counting winners during the last market downturn, but instead the headlines focused on when we might find rock bottom.
I would attribute Vancouver’s current obsession with the state of the residential real estate market to this tenuous nature of the market. Regardless of how much your house is worth today, we all know it could be worth less — sometimes a lot less — in a mere few months.
The scorekeeping may be a satisfying activity. On paper, your home may today be worth a lot more than it was when you bought it. At the risk of further scorekeeping, 46 per cent of British Columbia respondents to a recent Ipsos Reid survey for RBC Financial estimated that the market value of their home rose between 10 per cent and 29 per cent over the last two years. A further 23 per cent estimated that the value of their home has gone up between 30 and 49 per cent over the last two years.
A large majority of those same survey respondents think buying a house or condominium is currently a good or very good investment — 89% in British Columbia.
That’s a good sign, but I fear that sentiment is influenced by the wrong intentions. Hopefully, people believe investing in a home is worthwhile not because of the financial gains they can speculate on achieving in a rising market, but because they value the home they are buying.
Our home is our shelter. By owning or renting a home you are satisfying one of the basic necessities of life. The home as a product is by far the single most expensive product a consumer can buy. It’s also one of the most durable products manufactured. Most people expect a home to stand for more than a few years.
Owning real estate should be about securing shelter, investing in a durable product that will meet your needs not only today but for many years into the future. Building or investing in a home should also be about building community.
Our communities are shaped as areas of human settlement, where people put down roots, invest in their private domain while at the same time living collectively with others. We share public property, all agreeing to invest in the cost of building and maintaining the public realm for everyone’s enjoyment. We interact and socialize. These are the basic principles of human settlement and they are at the foundation of every home built and occupied by people.
This obsessive scorekeeping around the ups and downs of the residential real estate market is coming dangerously close to trivializing housing, making it a mere consumer product to be traded like other commodities.
Instead of focusing on scorekeeping, let’s instead focus on building better, more durable, more flexible and more affordable housing — accessible to all in strong communities that are diverse, safe, clean and culturally vital.
Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer who specializes in urban land-use issues. E-mail:
© The Vancouver Sun 2006