House prices, a factor of income or living style?

Forum about Fort McMurray real estate, hosing pricing and homeownership

House prices, a factor of income or living style?

Often times you hear

"well houses in Fort McMurray are more expensive because people make more money here"

I think it is somewhat BS in alot of ways that this is an acceptable answer to the housing prices here. A huge portion of the people who own houses in this town rent out basements, bedrooms, ect... just to make ends meet. They cannot actually afford to live in a SFH in the way that people in ANY OTHER CITY in this country live in them, as a single family.

People make more money here, in part due to a higher hourly wage, but more due to a larger number of total hours/week worked and the amassed overtime pay added to the resultant paycheck. Despite this giving ones life over to work people in this city can often not actually afford to buy a normal SFH with the standard 2 car attached garage and standard city lot in a quiet suburb and actually live in it like people do in every other city in Canada.

If you drive through a suburb similar to Timberlea/Thickwood with regards to house size/style and landscape in Calgary you would potentially be priving through areas like Edgemont, Hawkwood, Citidel, ect... Driving down a street like that in Calgary with houses like this

http://www.realtor.ca/propertyDetails.a ... 1503147160
or this
http://www.realtor.ca/propertyDetails.a ... -283473524

both SFH's with 2 car attached garages and both under $500,000 asking price.

The other thing that would differ though in that drive through that neighborhood? Those people who live in those SFH's live in those homes with their families by themselves for the most part, subletting out portions of your house in any other city is a very rare occurance, it is not the norm and people do not normally choose to do it as by in large people appreciate their privacy and having their own space.

The reality is that the subletting and 3 suites to each house and seriously taxed rental property system in this city are creating an artificial impression that people can actually afford these houses due to making more money in their jobs. It is simply not true in most instances, people can only afford to buy these properties because they get $2000+ rental income per a month, often times tax free cash deals, and that is what makes them able to afford that $750,000 house with the detached garage. It is this that also plays a large role in pushing up the house prices more and more, houses in Fort McMurray are not priced as far as how much a normal SFH owner can afford for them and their family, they are priced by how much can a normal person and their family, and 1-2 renters living in a portion of that house afford?

That is one of the MAJOR problems this city has, it is what screwed up the census, and it is what causes the house prices to remain insane. With massive new developments like Parsons Creek north of Timberlea, the new Gregoire community on the books, if all of these were built completely and not a single new person moved to Fort McMurray ALL of that housing could be occupied by people simply by moving people who are currently living in basement suites and single bedroom rentals into those new properties.

The sad thing about these new developments is they are being built to house people based on estimates of what a SFH "normally" has living in it and instead these new communities are going to be used in practice to house twice as many people as communities like that are supposed to. Each house comes with a $2000 in rental income guarentee and thus each house comes with the expected $400,000 spike on the normal price for a property of that size in a normal Canadian city with a strong economy like Calgary, where the average hourly wage is actually not that different from Fort McMurray for like work and the difference in income is largely a result of the number of hours the average person in those two cities works over the course of an average year.

What is one of the main things that can combat this issue? Condo developments that offer reasonable purchase prices/rent so that people can actually live in their own private condo instead of living in someones basement. This city has done a bang up job of screwing that up though with condemned buildings downtown, the Peaks in Timberlea getting hit with a special assessment for over $5,000,000 because of massive foundation leaking into the parking lot bad enough that now banks wont even lend money on a mortage for the place it's sister buildings the Summits and the Vistas now of course freak me out as they are virtually identical in look and one would assume construction. The Ridge in Thickwood across from the Esso on Thickwood BLVD had a huge special assessment with the condo board borrowing the money and thus now a 1180 sqf unit comes with condo fees of almost $1000/month. This is the alternative for those renters? This city has done a terrible job of policing it's building quality on condo developments and that goes far beyond the Penhorwood disaster. Even the buildings that are still standing and in livable condition are often times rapidly falling into very shoddy condition in the common areas and the individual units due to the extremely high rate of renters in these buildings who have no actual vested interest in the building remaining nice. I have been through so many condo developments in this city and I can count the number of very nice, clean and well maintained complexes I have seen on one hand, and I could be missing a thumb and two fingers...

Houses are expensive in this town because of a whole slew of reasons and the income people get from their job is a far cry from being a main one. What people put up with in this city to attempt to make ends meet is the main one.

Mayor Blake is attempting to make this into a family city, a place people want to live with a nice riverfront, an arena, public square, and nice communities. Well the way those nice communities actually function right now is more akin to freaking shanty towns and very much temporary "boomtown" mentality. People are not going to settle in a place like this, you cannot AFFORD to settle in Fort McMurray like you can when employed in a decent trade or as a professional in any other city in Canada. This is the main thing that NEEDS to be fixed before Fort McMurray can be seen as anything more then the largest temporary work camp ever. People NEED to be able to work and live here in a normal fashion akin to the way people live elsewhere in this country.
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